Office of the Historian

543. Telegram From the Department of State to the Embassy in Thailand1

Washington, February 13, 1960—5:11 p.m.

2108. For Johnson from Dillon. Reftels: 1835 and 2079.2 Considering additional factors you present and visit DLF Kirby,3 application for approximately $10 million for highway purposes will be considered by DLF (and possibly foreign exchange costs by Eximbank) on basis hereinafter indicated.

Irrigation projects present far more problems than highways and believe best at this time to confine consideration to highway project. DLF will advise you directly relative technical requirements.

Basis for consideration: [Page 1113]

(1)
Although project will be taken under active consideration, necessary Section 5174 be complied with pertaining to technical matters and anticipate submission of necessary data will take such time that action will be early FY 61.
(2)
Modest program as hereunder indicated advisable because of desire to limit local cost financing.
(3)
In order enable DLF consider local cost financing for this project necessary GOT place dollars in special fund and use subsequently for purchase of capital equipment in US for their development purposes or private enterprise equipment purchases. Believe this provision will meet requirements new DLF procurement policy.
(4)
In event foreign exchange costs become part of highway project, Eximbank may wish to consider but at interest rate appropriate Eximbank rate than DLF.
(5)
DLF will require borrower bear some portion of local currency project costs. Exact size of portion subject to negotiation.

It should be understood that first paragraph above means order of magnitude of loan which would be considered. It is not a commitment or line of credit of $10 million. It need not be one project but could be two or more within that total magnitude, but DLF would consider only distinct project or projects being financed to completion. For example the reference paragraph could encompass a project involving $1 million foreign exchange, say some $4 million local currency provided by GOT and $10 million local currency generated by DLF loan.

Herter
  1. Source: Department of State, Central Files, 792.5–MSP/1–2960. Confidential. Drafted by Brand of DLF; cleared by Avery F. Peterson and with the Department of the Treasury and the Export-Import Bank; and approved by Dillon.↩
  2. Telegram 1835 is printed as Document 540. Regarding telegram 2079, see footnote 2, supra.↩
  3. Edwin D. Kirby, Deputy Managing Director for Private Enterprise, Development Loan Fund.↩
  4. Reference is to Section 517 of the Mutual Security Act of 1958, approved June 30, 1958. (72 Stat. 269)↩