Office of the Historian

ETA–30. Memorandum of Conversation, by Albert Post of the Office of Inter-American Regional Economic Affairs1

Washington, March 18, 1960

SUBJECT

  • Courtesy Call by Mr. Felipe Herrera on the Under Secretary.

PARTICIPANTS

  • The Under Secretary of State
  • Mr. Felipe Herrera, President, IADB
  • Mr. Robert Menapace, Executive Vice President, IADB
  • General Robert Cutler, U.S. Executive Director, IADB
  • REA – Mr. Albert Post

Mr. Herrera stated that he had come to pay his respects to the Under Secretary and that he had already made a courtesy call on the Secretary of the Treasury, Mr. Anderson. He indicated that he and his associates had already been in contact with bankers in New York, the [Typeset Page 85] International Bank for Reconstruction and Development, and other organizations that they believe should be contacted for the future operations of the IADB.

Mr. Dillon said that he hoped that the new bank was going to have close cooperative relations with Mr. Black of the IBRD since Mr. Black was wondering how the two institutions would work in the future with regard to loans for Latin America. Mr. Dillon stated that he had informed Mr. Black that he hoped that the two banks could work jointly on some loans with each one taking up a participation. Mr. Herrera thought this was a very good idea since he believed it would increase the prestige of his institution and make available additional financial resources, since the IADB had relatively limited capital.

Mr. Dillon said that he saw the new bank as filling three basic requirements:

1.
As an institution which was directly intended to meet Latin American requirements and therefore close to the Latin American scene;
2.
As being able to offer technical assistance in the development of projects and plans which could then facilitate loans to individual countries;
3.
And, through its Special Fund, being able to assist countries which have a narrow margin of credit-worthiness and which could later cooperate with the new International Development Association.

There was some discussion on the importance of the IADB maintaining a good record on its regular banking loans. Mr. Dillon declared that there might be some problems on such loans if the IBRD and the new bank maintained different standards, but he was sure that there would be a satisfactory way of working things out.

Mr. Herrera said that they were hoping to obtain the U.S. contribution to the Bank’s capital funds shortly and that he had discussed the matter with Mr. Anderson. Mr. Dillon said that he understood that the U.S. would make its capital contribution during the next fiscal year but that if there was an adequate cash balance in the Treasury toward the end of this fiscal year part of the U.S. capital would be paid in at that time. Under the legislation, Mr. Dillon indicated, the Administration could pay in the U.S. capital in either of the two fiscal years. Mr. Herrera said he would like to have the U.S. capital paid in because he expected to take a trip to Latin America shortly to discuss arrangements for payment of capital participations by other member countries.

Mr. Menapace and General Cutler said that they had received excellent cooperation from U.S. Government officials in securing space for their new headquarters. General Cutler said that they expected in time to occupy the top four floors of the building at 801 19th Street and that by May 15 two of those floors would be vacated and available for occupancy.

  1. Source: Department of State, Central Files, 371.314/3–1860. Official Use Only.↩