165. Memorandum of a Telephone Conversation Between the Secretary of State and the Secretary of the Treasury (Anderson), Washington, December 6, 1957, 6 p.m.1
The Sec. said on the UN he would like to approve of their voting for this resolution with the inclusion of language to the following effect: (here he read from a paper.) Sec. said it seemed to him if we made these two qualifications this might be the best way out of a bad dilemma. Sec. Anderson said it was his frank judgment that we made a mistake if we did it at all. He mentioned the mechanical ways that limited us. This was the first time we had gone into a multilateral agreement based purely on the volume of money we get in. The fellows in Congress who were wavering on foreign aid would be a lot harder to hold. He mentioned also the Sputnik thing. Anderson said he was personally very concerned about reciprocal trade and mutual aid from the standpoint of Congress. [Page 438] He mentioned his talk with Kerr.2Anderson said he was trying to tell him we had to cut down on some programs. Mention had been made of wiping out land reserve on soil. Kerr had said if we were going to wipe out anything let us wipe out our foreign commitments program. This is the kind of thing we would run into in growing amounts. Anderson said even with the language the Sec. mentioned we would still be making a mistake. That was his judgment.
Sec. said as far as Congress was concerned we have this advantage that Walter Judd is there who will take the rap. He was a powerful advocate. This was not going to involve any commitment for quite a little while. From the standpoint of the UN it was good tactics. Whether it is good or bad from Congress’ standpoint was difficult to judge. Anderson said we had committed ourselves to multilateral fund—$300 million looks pretty small. Sec. asked if Anderson would feel happier if amount was bigger. Anderson said he thought it would be difficult to reach. He rehearsed what happened when we start international funds—we put up our money at some point and everybody else puts up an IOU. Anderson said one of the problems was we could not collect the capital. We are going to be pretty hard pressed if we don’t put up our share on the same basis as the other countries. Anderson said he had been struggling with an alternative suggestion. Quite frankly, he said he had not come up with anything that was reasonably sound.
Sec. said he probably would have to decide on this over the week end. It may come up for debate on Monday. Sec. asked when Anderson would be back. Anderson said on Sunday. Sec. said he would probably call him again and asked if Anderson was vetoing this thing. Anderson said he was giving him his views. Sec. said it was still very much in the future. Sec. said it was a matter of being on the shelf until the merits were considered. Anderson mentioned a small down payment from some countries. He said in the interest of the situation in the Middle East we were willing to agree to cutbacks. Sec. asked if we would mind too much if this happened. A said if we did actually get into it we would be hard put to sell it to the country. Country is not prepared. He mentioned banking safeguard and the possibility of bank expansion. Sec. said he would sweat it out a little more. From Anderson’s standpoint he saw the force.
A. said he was sorry he could not be more helpful.