Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

7. Letter From Secretary of the Treasury Dillon to Secretary of State Rusk⁰

Washington, February 20, 1962.

Dear Dean: The President spoke to me today and asked what could be done to further tighten up on the balance of payments impact of foreign aid expenditures. I told him of our agreement last week that Assist-ant Secretary Leddy and Mr. Chenery would meet this week to see what could be done to minimize the outflow of dollars for local cost financing.

I also told the President of my view which I mentioned in our meeting last week that the over-all balance of payments impact of foreign aid operations, including our contributions to the Inter-American Bank and to the International Development Association, as well as AID and military assistance expenditures, should not exceed a billion dollars annually as compared to last year’s level of about $1.2 billion. The President expressed his concern that the figure was running this high and asked that I inform you of his concern and that we jointly furnish him with a progress report by the end of next week which would indicate what could be done to meet or better the billion dollar goal.¹

With best wishes,

Sincerely,

Douglas

0. Source: Department of State, Central Files, 811.10/2-2062. Official Use Only.
1. See Document 8.