23. Memorandum of conversation, February 20, between Rusk and Ambassador Mueller1

[Facsimile Page 1]

SUBJECT

  • Financial Assistance to Chile

PARTICIPANTS

  • The Secretary
  • Chilean Ambassador Walter Mueller
  • Mr. Fausto Soto, Minister, Chilean Embassy
  • Mr. Samuel O. Lane, WST
  • Robert M. Phillips, WST

In the course of a courtesy call on the Secretary, the Chilean Ambassador mentioned the credits which the Chilean financial mission had recently negotiated with the International Monetary Fund and United States official and private lending institutions. He also said that he had discussed with Under Secretary Ball the pending request for appropriation of $100 million for Chilean reconstruction and had expressed the hope that this would be made available as soon as possible.

The Secretary said we were experiencing something of a legislative log jar, largely because many important domestic bills were being considered, but we hoped to be able to act promptly in presenting the appropriation request for Chilean reconstruction. He asked what progress Chile was making towards meeting the housing problem, and also what was being done in the agricultural sector.

The Ambassador briefly outlined the operation of the Caja Central which had been set up to encourage the growth of private savings and loan associations as a means to encourage private investment in housing. He pointed out that Chile was carrying on an extensive agricultural colonization scheme which involved substantial elements of agrarian reform. He went on to mention Chile’s new 10-year development plan and also expressed the idea that the same amount of economic development assistance now being [Facsimile Page 2] extended to the underdeveloped countries could do much more if there were better coordination among the various lending agencies, both United States and international. The Ambassador considered that it was particularly desirable [Typeset Page 59] that project credits be made available to cover all costs, including local currency costs, and that the International Cooperation Administration’s participant training programs should be related to the needs of development projects.

The Secretary, commenting that coordination was desirable but not always easily achieved, suggested that perhaps the coordination of credits from a number of sources could be best effected by the recipient country. For our part, he added, we were studying a plan for more effective integration of the activities of United States official lending institutions.

  1. Financial assistance to Chile. Official Use Only. 2 pp. DOS, CF, 725.5–MSP/2–2061.