Office of the Historian

167. Memorandum of a Conversation, Department of State, Washington, May 13, 19601

Washington, May 13, 1960

SUBJECT

  • Afghanistan: (1) Foreign Aid Construction Projects; (2) Long Term Commitment on Foreign Aid for Afghanistan
[Page 349]

PARTICIPANTS

  • Acting Secretary Dillon
  • ICA—Mr. James W. Riddleberger, Director
  • ICA—Mr. Leonard J. Saccio, Deputy Director
  • U/MSC—Mr. John O. Bell
  • NEA—Mr. Parker T. Hart, Deputy Assistant Secretary
  • SOA—The Hon. Henry A. Byroade, U.S. Ambassador to Afghanistan

On Friday, May 13, the above group met for lunch in the Secretary’s Dining Room to discuss two subjects raised by Ambassador Byroade during his consultation in Washington. The discussion revolved around two papers that Byroade had submitted to the Acting Secretary. One, dated May 2, concerned “Foreign Aid Construction Projects”, and the other dated May 9, concerned “Long Term Commitment of Foreign Aid for Afghanistan”.2

Most of the discussion was on the subject of the first paper listed above. Mr. Dillon said that he hoped that procedures could be worked out and that major construction in connection with our foreign aid program could be performed by the Corps of Engineers. Mr. Riddleberger seemed to agree with the general desirability of such a shift provided that workable relationships could be worked out with the Corps of Engineers. It was decided that a future informal discussion would be called by Mr. Dillon which would include Mr. Riddleberger and the Chief of Engineers.

Discussion on the second paper was shorter, as Mr. Dillon had to leave for the White House. Mr. Dillon outlined his views of the probable long-term changes in our general aid concept. He felt there was a considerable chance of adopting Byroade’s “line-of-credit” approach next year and that it might be possible to get approval next year from Congress for that approach. Byroade questioned whether this action could come quickly enough in view of the timing of Afghanistan’s second five-year plan. Mr. Dillon saw no hope of changing radically our present concept at this stage of the legislative year. Ambassador Byroade stated that he could feel more relaxed about the situation in Afghanistan if the National Security Council at least knew of the dilemma we faced there on this problem. Mr. Dillon said he would be glad to make a report to the Council on the subject. Ambassador Byroade undertook to prepare a paper for that purpose.3 Mr. Saccio raised some question of the desirability of the “line-of-credit” approach. He stated that the political appeal of such an approach was of [Page 350] course considerable but that in practice it was easy for the U.S. to lose control of the choice of projects undertaken under the overall line-of-credit.

There was a marked tendency for a recipient government to regard an agreed line-of-credit as “its own money” and to insist on spending it when and as it wished without discussing the desirability or feasibility of projects with the grantor government.

  1. Source: Department of State, Central Files, 789.5–MSP/5–1360. Secret. Drafted by Byroade on May 17.↩
  2. Neither found.↩
  3. Under cover of a memorandum of May 18, Byroade forwarded a paper to Dillon on Afghanistan for possible use by the Under Secretary in briefing the NSC. (Department of State, SOA Files: Lot 64 D 577, Afghanistan—U.S. Policy) There is no record that Dillon ever briefed the NSC on developments in Afghanistan.↩