Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

199. Notes of the Legislative Leadership Meeting⁰

June 2, 1960, 9–11:15 a.m.¹

[Here follow a list of participants, a summary, and discussion of unrelated matters.]

International Development Association—Sec. Anderson spoke of the effort that had been made to add a “free transit of waterways” amendment. He said this would open the way to the addition of qualifications by other countries and ultimately the death of the project. He recalled his efforts, which appear to be successful, to work out an exchange of letters that would satisfy Rep. Multer and obviate the issue.²

Mr. Anderson said that the most important thing was to get quick action in either the House or the Senate so that hearings could begin in appropriations committees.

Sen. Saltonstall noted that hearings had begun on the extension of the Development Loan Fund, that the IDA would be the seventh lending institution (4 international and 3 by the United States), and that the apparent duplication would have an adverse effect on the Development Loan Fund. The President noted the psychological factor involved in the desires of various regions to have such an institution tailored to its own situation. The President stressed the coordinating function of the National Advisory Council, and he said he had talked with Sec. Anderson and others on the possible desirability of setting up within the State Department an individual to act as full-time Executive Secretary for the NAC. Sec. Anderson said that the IDA was simply a third “window” inside the World Bank, and that behind all of the windows was the desk of Eugene Black.

Sen. Saltonstall then inquired why the DLF should grant loans if all three windows of the World Bank declined. Sec. Anderson said that the World Bank could not make “political” loans which were sometimes necessary, as in the case of a recent $100 million to Argentina. The President added that these may very well be good loans, that certain soft loans had to be made and the U.S. had to make them. He went on forcefully to emphasize his efforts to wage peace, something that could not just be done with pretty words; instead, these newly developing nations had to have the chance to make a living. He asserted that if the DLF were scrapped it would become necessary to revise extensively our security arrangements and perhaps even be required to fall back to some “citadel” concept. The importance of this type of activity had to be recognized and approved even if it lacked any specific pressure group to help it along. Sen. Dirksen asked about the IDA arrangement for using local currencies and noted that Senators Lausche, Capehart and others would move to strike out that provision. Sec. Anderson explained the arrangement whereby some of the contributions of a country could be in this local currency. This was a means of making the best of a bad situation where any country was not financially able to make a contribution in hard currency. Also, there would sometimes be occasions for using local currencies and this would be of benefit to the United States, however infrequent, since we presently have soft currency holdings without opportunity to use them. The President suggested that Sec. Anderson approach Sen. Lausche and present the case for this arrangement.

[Here follows discussion of unrelated matters.]

0. Source: Eisenhower Library, Whitman File, Legislative Leadership Meetings. Confidential.
1. The meeting was held at the White House.
2. Multer sent the text of the proposed amendment to Senator Monroney May 10; a copy of the letter, the amendment, and a statement of congressional intent are in National Archives and Records Administration, RG 56, Records of the Office of the Secretary of the Treasury, Robert B. Anderson, Subject Files, International Development Association.