17. Memorandum From the Representative at the United Nations (Lodge) to the President 1

SUBJECT

  • Economic Aid for Underdeveloped Countries

The two acts of the President in the field of foreign relations which have won the greatest support have been the Atoms for Peace and the “Open Sky” proposals. Both were tremendously effective because they were affirmative, they took the initiative, and they challenged the Soviets, offering to match them in word and deed. My most memorable moment at the United Nations was when I offered the 100 kilograms of fissionable material on behalf of the United States.

A third step of a similar nature should now be taken. It is:

For the President to announce that the United States, believing (a) that underdeveloped countries should be helped, (b) that it is beyond the power of any one country acting alone, and (c) that economic help as a disguise for political penetration is pernicious, offers to join forces with the Soviet Union and other United Nations members and challenges the Soviet Union to match our contributions up to a certain amount to an international fund for economic development. Contributions to be largely in convertible currency (and the non-convertible part to be used to expend our own surpluses).

Advantages of such a scheme are:

1.
Every country which today tries to siphon money out of the U.S. Treasury could thereafter be very plainly told that all it has to do is to get the Soviet Union to put up the same amount and the United States will come through. We would really capture the initiative and “put the monkey on their back”.
2.
It would undoubtedly be actually cheaper in dollars than succumbing to a succession of last-minute blackmails involving crash payments to protect vital American interests, such, for example, as protecting Wheelus Base in Libya against Soviet penetration.
3.
It would put us in the position of: “Anything you can do I can do as well—if not better”.
4.
It would be carried out by personnel who would be uniformed and labeled and the whole operation would have great [Page 74] publicity, which would protect the recipient nation from being subverted.
5.
It could not possibly open any door to the Soviet Union which is not now open to it, but would instead mean that Soviet activity could be under some sort of supervision.
6.
If the Soviet Union refused, we would have scored an immense advantage in the cold war and when nations made requests of us in the future they could be constantly reminded of the fact that the Soviet Union refused to help. It would bring all exaggerated ideas about the U.S. Treasury down to earth.
7.
Such a program should, of course, be used to help us get some of the things that we want abroad—such as security for our bases.
8.
The main drive, however, should be to build up these countries economically and George Humphrey should be put in charge of it, who would think of it basically in terms of economic health.
9.
Much of the money would be spent in the United States to buy products of American industry.
10.
This should be done under the aegis of the United Nations to avoid having it look like a cold war move. We could probably get the set-up we want at the U.N.
11.
We should act soon because probably the Soviets will think of making some offer like this themselves and then we would be put in the position of running along behind the bus picking up the pieces.
12.
The friends of America and the opponents of communism in these countries all speak of the need for a coordinated policy which will give us the initiative. The above proposals seek to meet that urgently-expressed need.
13.
The Soviets are constantly pulling ahead and if they win the contest the expense to us will make this scheme seem trifling. The above scheme offers the best hope of our winning.

H.C. Lodge, Jr.
  1. Source: Eisenhower Library, Whitman File, Administration Series, Lodge, Henry Cabot, 1956. Top Secret; Eyes Only.