147. Memorandum of Conversation0
SUBJECT
- Mutual Security Program
PARTICIPANTS
- Governor Herter
- Mr. Macomber
- Senator Mike Monroney (D. Okla.)
- Mrs. Beth Short
Senator Monroney led off the conversation by saying that the Congress and the country were getting tired of the Mutual Security Program and that the Administration was going to have to use imagination to develop a substitute. He thought the Mutual Security Program was outmoded much the same way that the statue of liberty play was in football. If Bud Wilkinson, the Oklahoma football coach, used today the same play his team was using ten years ago, his team would not be as successful as it is. While the Mutual Security Program had been a good play in its day, it was time to get a new play.
In this connection, the Senator suggested that the Department should take a long look at the accumulations of counterpart funds around the world and see if a new project could be developed based on these funds. The Senator was thinking in terms of both counterpart funds left over from the Marshall Plan in Europe and the PL 4801 funds. He was under the impression that there were substantial amounts of Marshall Plan counterpart funds still lying unused in European banks. Governor Herter questioned this and said it was his impression that the Marshall Plan counterpart funds were substantially used up.
Senator Monroney explained that what he had in mind was the United States taking the lead of calling a “Bretton Woods type” conference to set up a new international organization patterned after the World Bank which would be capitalized by these counterpart funds. These funds would be released by the United States and the various recipient countries to this new organization for this purpose. The organization would then arrange loans on low interest rates (or perhaps no interest for a period of years) to countries which could not qualify for such loans with the World Bank or other public or private lending organizations.
[Page 295]Senator Monroney referred to a memorandum which had been sent to him by Assistant Secretary Hill on January 16, 1957 (copy of memo and covering letter attached).2 This memorandum addressed itself to the Senator’s proposal and, in the Senator’s view, dismissed it on the basis of alleged facts which the Senator did not think were correct. He was particularly exercised about the figures shown in this memorandum which he believed to be erroneous and misleading.
After rather a lengthy discussion of the Senator’s proposal, Governor Herter concluded the conversation by promising to give it serious study. The Governor thought as a first step the facts and figures in the memorandum referred to should be checked for accuracy and an attempt be made to determine exactly what counterpart funds were presently lying unused in various countries throughout the world.