148. Memorandum of Conversation0

PARTICIPANTS

  • Mr. James H. Smith, ICA
  • Mr. Dearborn, White House
  • Mr. Henderson
  • Mr. Becker
  • Mr. Macomber
  • Dr. Elliott
  • Under Secretary Herter 1

SUBJECT

  • Un-used Funds in Other Countries, and the Possible Setting Up of a Free World Economic Development Fund

The Under Secretary stated that Senator Monroney was convinced a large amount of funds was impounded abroad and wanted a full report.

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Mr. Dillon reported that the Bureau of the Budget has formal control over keeping track of these funds and should have completed by next week a study which will clear up what funds exist in all the different sources abroad and where they are. Doubt on this point has caused Congressional confusion and uneasiness.

Mr. Henderson stated that he will ask Mann, in E, to get in touch with Mr. Becker 2 Monday morning and will tell Mann that the E area is charged with pulling together all the data on the subject of these funds as it unfolds. In particular, it was the consensus of the meeting that it was essential that ICA provide whatever historical data it has from its own records or from the records of its predecessors which it inherited showing exactly what funds have been released in the past and, where possible, for what purposes.

It was further the consensus of the meeting that everyone agreed that serious thought should be given to the setting up of a Free World Economic Development Fund. Mr. Smith stated that, even if PL 480 funds were not included, there would be enough other funds available to start such a Fund. He suggested that even $100,000,000 would get the Fund off to a good start, and doubted the wisdom of making it too big. The Under Secretary felt the impact would be much greater if the Fund were not kept small.

There was discussion about putting into this Fund both current funds which exist abroad and future repayments to the United States.

Mr. Macomber suggested that if such a Fund is cleared as a matter of policy, the Secretary might publicly launch the idea with a major speech. Macomber added that such an idea would do a great deal to convince Congress that we are looking ahead in the foreign aid picture and that perhaps there was an end in sight to large annual appropriations.

Mr. Smith emphasized the importance of having long-range credit available such as this would provide.

Harry F. Stimpson, Jr.
Special Assistant
  1. Source: Department of State, Central Files, 700.5–MSP/1–2558. Confidential.
  2. Deputy Under Secretary Dillon was also present although he is not listed among the participants.
  3. Loy W. Henderson, Deputy Under Secretary of State for Administration. Loftus Becker, Legal Adviser of the Department of State.