251. Memorandum of Conference With President Eisenhower0
OTHERS PRESENT
- Secretary Dillon, Mr. Bell, Mr. Staats, Mr. Brand, Mr. Riddleberger, Secretary Irwin, General Palmer, General Persons, Mr. Morgan, Mr. Merriam, General Goodpaster
Mr. Dillon said the group had come in to put before the President the broad lines proposed for the Mutual Security Program and message this year, and to bring up one or two specific points of issue. He proceeded to review a topical outline proposed for the message, copy attached.2 During this review he commented that all of the NATO countries are doing more in terms of increased military programs. He said there is no grant assistance planned for Britain, France, and Germany except the clean-up of certain small previous commitments. The President suggested that the message bring out that the Mutual Security Program, in addition to improving the economic status of recipient countries, improves their strength and stability and thereby contributes to American security.
Mr. Dillon said that one matter reflected in the speech and in the program material prepared for submission to the Congress is the position of the Budget and the Treasury against releasing money in the FY–60 program proposed for Italy, Belgium and the Netherlands. He recalled that the President and Mr. Herter had made statements to our NATO allies that we are not going to make unilateral changes in programs affecting our allies.
The President commented strongly that we cannot run out on defense agreements and commitments we have made. We cannot be guilty of bad faith with our allies. Mr. Staats pointed out that the difference of view relates to the Netherlands and Italy, and does not include, as Mr. Dillon had suggested, programs related to IRBMs. Mr. Dillon said that the issue is over FY–60 funds. The President stated that he felt this is a matter that is already decided. Mr. Irwin recalled that we have made a broad committment not to make abrupt or unilateral changes in the program.
The President asked whether the United States has, for example, with respect to the program for Belgium, undertaken with them to determine what the requirements are and then how much the Belgians can pay. Mr. Irwin said that this has been done and that the filling of [Page 484] these requirements necessitates continued sharing of costs. Mr. Dillon mentioned some of the specifics entering into these matching programs. The President said he thinks that a little more joint study on this matter is needed for fiscal year 1961. He is inclined to give a go-ahead on fiscal 1960. He asked that the Budget representatives talk to State Department officials. He did not want to put a halter around their neck, but thought that the question regarding fiscal 1960 is pretty much decided.
At Mr. Dillon’s request, Mr. Brand next gave a summary of Development Loan Fund activity in Turkey, India and Pakistan related to the private sector, i.e., to generating private capital to join with indigenous private and public funds in those countries to build specific projects. The President was keenly interested in this development and asked Mr. Brand to convey a message from him to a group of private businessmen who will be meeting in Washington in the next few days on this matter, indicating that officials in Turkey, Pakistan and India had asked the President to assure American businessmen that these countries would protect investments that were made and would give assurances against seizure or undue risks.
Mr. Dillon next raised the question of U.S. aid and support to the Indus River project. He said there is need for Congressional approval and endorsement of this program, waiver of certain restrictive provisions of the MSP, and a statement that the compliance with World Bank criteria would be considered to satisfy requirements of the Mutual Security Act on economic soundness, cost benefit ratios, and completion of engineering studies. The President expressed strong support for the Indus River project. He commented that he hoped this would help toward a settlement in Kashmir, recalling some of his efforts in this respect during his recent visit to Pakistan and India.
Mr. Dillon next described to the President the remarkable progress now being made in Taiwan to strengthen its financial and economic affairs and to expand its economy, especially its industries. He is proposing that Taiwan serve as a “model” for other areas and is recommending an incentive fund for development of new industries, to be matched by funds from Taiwanese private enterprise. The President expressed warm endorsement of this type of activity. He said he thought the message as outlined was fine.
Brigadier General, USA