Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

ETA–29. Memorandum from the Director of the Office of Inter-American Regional Economic Affairs (Turkel) to the Assistant Secretary of State for Inter-American Affairs (Rubottom)¹

Washington, February 5, 1960

SUBJECT

• Discussion at Secretary’s Staff Conference—February 5, 1960

I feel that you should be aware of the following points that came up at the Secretary’s staff conference on February 5.²

[Here follows discussion of two matters unrelated to U.S. loan activities in Latin America.]

3. I stated that my colleagues on IA–ECOSOC yesterday had referred to the February 4 front page article in the New York Times by Kenworthy³ stating that U.S. aid to India would increase from $150–170 million per year to $250–300 million per year but without any increase in the total. They said if this is so, obviously the priorities of other participants must be reduced. Is this our support for Operation Pan America?

I said that I did not know about the alleged [illegible in the original] or the accuracy of the article. My Brazilian colleague said that the Brazilian Ambassador at the Pan American Society had recently stated that Latin America had participated in DLF funds to the extent of only 7-1/2%. He added that if you eliminate the Argentine participation, which [illegible in the original] a stabilization loan, the real participation was around 5%.

I said to the Secretary that I had looked into the matter and found there were two reasons for the low participation. Latin America had not submitted many worthwhile projects and the second reason was that they got a low priority since there was a general feeling that they were much more creditworthy than other areas and should have applied to the Eximbank. In any case, I stated, it was an unfortunate article to come out on the eve of the President’s departure to Latin America.

The Secretary stated that it should not be forgotten that Latin America gets a very high percentage of Eximbank loans. Was that not so?

I responded that normally Latin America does get a high percentage; about 40% of all Eximbank loans. However, the level of loans in 1958 was about $477 million (because it was a year of many stabilization loans) but had dropped in 1950 to some $233 million. I added that I thought the outlook was not good since the President’s Annual Economic Report shows that it is expected this decline will continue and the justification is that the Inter-American Bank will shortly come into operation. The only trouble with this is that it would actually take quite a long time for the Inter-American Bank to begin making a significant contribution to the economic development of the Hemisphere and thus we were faced with the immediate problem of securing a higher priority for Latin America in the operations of DLF.

1. Source: Department of State, ARA Files, Lot 62 D 302, “Chron File of Memoranda & Miscellaneous.” Official Use Only. Drafted by Turkel.
2. The record of the Secretary’s staff meeting, held at 9:15 a.m. on February 5, drafted by John A. Calhoun, Director of the Executive Secretariat, contains a brief mention of the subject dealt with in this memorandum. (Secretary’s Staff Meetings, Lot 63 D 75)
3. E.W. Kenworthy.