Foreign Relations of the United States, 1955–1957, East Asian Security; Cambodia; Laos, Volume XXI

38. Memorandum of a Conversation, Department of State, Washington, March 30, 1955¹

Washington, March 30, 1955

SUBJECT

• The President’s Fund for regional development through the Colombo Plan

PARTICIPANTS

• Mr. G. L. Mehta, Ambassador of India
• Governor Stassen, FOA
• FOA—Mr. Cedric Seager
• FOA—Mr. Orville McDiarmid
• SOA—Mr. J. R. Fluker

Ambassador Mehta, at his request, called upon Governor Stassen to discuss the Governor’s recent trip to India and the area.²

Governor Stassen said that the trip, in his opinion, was of great benefit in that all of the countries he visited had expressed views on economic development and other problems, and that the GOI expression of views had been particularly constructive. He stated that the views and suggestions of the Planning Commission and other ministries directly involved in Indian economic development, were obviously the result of a great deal of thought and experience.

Governor Stassen said that after reporting back to Washington on the result of his trip, it had been decided that the Executive Branch would present to the Congress its bilateral aid programs and in addition would propose to the Congress a $205-million Fund for use at the President’s discretion in the development of projects which would be of benefit to the region—the region being defined as the “arc of free Asia.” Governor Stassen added that the initiation of such a fund, with the $205 million for FOA [ FY?] 1956, would be a natural first step toward achievement of broader economic development and cooperation in the fields of trade and investment among private firms in the area.

Governor Stassen said that the Government of India’s views on the use of the Colombo Plan organization for furtherance of the regional effort were acceptable to the United States. He observed we welcomed the Government of India’s approach to members of the Colombo Plan consultative committee regarding the establishment of a small Secretariat along with consideration of the organization of a small professional and technical group or groups which would serve to investigate and evaluate project proposals. He indicated U.S. acceptance of the Indian view that the expanded Colombo Plan organization not be used for multilateral decisions on the apportionment or the program uses of the fund—implying that bilateral programs under the Fund would still be in order.

Governor Stassen also said that the U.S. would be willing to assume a fair share of the cost of the proposed Secretariat and the professional and technical groups. He expressed the belief that some cost-sharing formula could be developed and noted the possibility of using a formula along the lines of that governing UN technical assistance contributions, which would undoubtedly be acceptable to the Congress and to the nations of Asia.

Governor Stassen emphasized the fact that the Congress had yet to act on the proposal for the President’s Fund. He said that of the three necessary steps, i.e. formulation of the Executive Branch view, solicitation of the views of the Asian nations and Congressional action, the first two had now been taken.

Governor Stassen noted some of his over-all impressions from his trip. He said that, speaking broadly, the peoples of the countries he had visited looked first to their needs for food; then, in sequence, they looked to improvement in the availabilities of clothing, housing and other basic material supplies affecting their standards of living. He said that in India it was his impression that the people had made substantial progress in increasing the supplies of food and clothing, and that the need now was for industrial development and housing. He added that this general thought applied to all countries he had visited.

With regard to trade development, Governor Stassen stressed the fact that trade development should not be viewed as development of one country’s trade at the expense of another. He said that, through the regional approach, we were all looking toward an improvement of the standards of living and the productivity of the countries, which enable all countries to expand their trade on the basis of the growing prosperity.

[Here follows discussion of economic developments in India.]

1. Source: Department of State, Central Files, 890.00/3–3055. Confidential. Drafted by Fluker.
2. Stassen visited the Asian area, February 21–March 13. A copy of his report on this trip, dated March 14 and sent to a number of Cabinet members including Dulles, is in Eisenhower Library, White House Central Files, Confidential File. In the same file is the FOA staff report on the trip, dated March 21, with a covering note from Stassen, dated April 14, which was sent to the same group of Cabinet officers. The staff report includes several Indian Government memoranda of conversations held by Stassen with Indian officials, February 27–March 2. None of the documents mentioned here is printed.