426. Memorandum from Forrestal to Bundy and Dungan, March 111
SUBJECT
- Clay Committee Report
I have glanced rather quickly at the draft report of the Clay Committee which Carl was kind enough to let me look at. It confirms my earlier suspicions about what a committee of this membership might come up with. It is basically nothing more than a re-hash of all the tired-out shibboleths in the business community about foreign aid. The tragedy is that more important parts of the business community have gone far beyond this kind of thinking to a more sensible, albeit still critical, view.
Nevertheless, having made our bed, we now have to lie in it, and I offer the following comments for what help they might be in the redrafting process.
At the outset I think we should be quite clear that to the outside world this is going to be a Presidential report and will be interpreted—unlike the Mansfield report—as a direct expression of this Administrations’ views. I don’t see how we can escape this difficult fact. That is why it is essential that we take the time and effort to try to reconstruct something out of the mess which will not be positively harmful.
Page 2: I don’t think a report of a Presidential commission should conclude that the American people are against foreign aid. Indeed, I believe there is a recent Gallup Poll indicating that the contrary is true.
Page 3: The gold flow problem must be kept separate from foreign aid. It is a phenomenon which is the result of the totality of our foreign transactions and other pieces of it are far more significant and susceptible of adjustment than the foreign aid program, i.e. military expenditures in Europe. It should be sufficient to point to the fact that we have reduced the Aid burden on the balance of payments by two-thirds in two years.
[Facsimile Page 2]Page 4: Criticism of aid to “unaligned” countries must come out. We do not give aid in order to persuade countries to “abandon their [Typeset Page 1712] strongly held views” which may differ from ours. The purpose of our aid is to establish and preserve the independence of weak nations from permanent domination by Sino-Soviet Communism, not to export the philosophy of some members of the Committee.
Page 5: Are references to the Hickenlooper Amendment and the amendments prohibiting aid to Communist countries helpful, especially in view of our efforts to get the latter modified?
Page 7: Criticism of the Marshal Plan is hardly something which should appear in any Presidential committee report. This is the first time in recent years that I have heard such a thought expressed—even from Henry Alexander. The facts are that of the $17 billion which were programmed under the Marshal Plan, only 12 were actually spent, and the whole operation was conducted in considerably less time than had been anticipated.
Page 8: Here again is the discredited argument that we should not help countries whose economic system is “inconsistent with our beliefs.”
Page 11: The implication here is that we should cut off military assistance to countries which are not aligned with us. This ignores our efforts in civic action, internal security, and training in countries like Cambodia and Indonesia.
Page 15: The above principle is applied to exclude all of Africa.
Page 17 through 21: The entire discussion of Latin America proceeds on the assumption that our problems in Latin America arise from the fact that those countries have not taken all the orthodox financial steps necessary to make themselves attractive to American investment. This would seem to miss the point completely. The report says on page 20 that Latin American countries “must begin to accumulate wealth before (they) can effectively redistribute it.” I know some people in Latin America who have accumulated a great deal of wealth. Part of the problem is to get them to redistribute [Facsimile Page 3] it. The major part of the problem, however, is to get the governments of Latin American countries to make a serious start on social and economic reform.
Page 29: I do not understand what is meant by the statement that the United States should not provide MAP “where the principal protagonist (sic) of the recipient country is a non-Communist neighbor with which the U.S. also maintains friendly relations.” Does this mean no help to either Pakistan or India, or what?
Page 29: The remarks about the private sector are a distinct regression from the accomplishment of the last Administration, where a similar committee was at least able to distinguish between the impracticality of imposing U.S. conceptions of private versus public sectors on under developed countries and the real problem involved in so [Typeset Page 1713] administering the aid program as to encourage U.S. private investment in these countries.
It seems to me that the report as a whole fails to meet the President’s request that it address itself to the problem of using economic assistance to promote the United States’ interest in maintaining the strength of the free world. Instead of talking about foreign aid as a positive means of advancing U.S. interests, it addresses itself mainly to ways in which the U.S. can diminish its responsibilities by withdrawing from non-allied countries and from those countries which do not mirror the American pattern of private enterprise. Such countries, which comprise the bulk of the world’s less developed resources and population, are presumably left for exploitation by the enemy. One might have thought we had progressed beyond this sort of approach.
- Comments on the Clay Committee Report. Secret. 3 pp. Kennedy Library, National Security Files, Subjects Series, Foreign Aid, Clay Committee, 3/11/63–9/27/63, Box 297.↩