124. Memorandum From the President’s Deputy Special Assistant for National Security Affairs (Bator) to President Johnson1
SUBJECT
- Ex-Im Financing of U.S. Equipment for an Italian Built Fiat Plant in the USSR
At Tab A,2 Secretary Rusk recommends that we grant an Italian request for a 5-year Ex-Im Bank loan of up to $50 million to finance export of U.S. equipment which would be used in a new Fiat automobile plant in the Soviet Union. This does not require formal Presidential action; the Bank has the authority and the money. The Secretary wants to (1) direct Linder to go ahead and (2) informally notify key people on the Hill.
The loan makes good sense in terms of bridge-building and our interest in having the Soviets go in for “middle class” consumer goods. In terms of exports, if Ex-Im turns the Italians down we would probably lose the sale. The terms (5-years) would be standard for an export credit.
Tony Solomon tells me that, despite wide publicity, there has been no noise on the Hill about the Fiat deal, and nobody in either House is a sure bet to complain. He thinks—and I agree—that prior soundings would only stir up opposition. If you approve, we would propose to notify the relevant people before Harold Linder makes any public announcement: Senators Mansfield, Long, Dirksen, Kuchel, Fulbright, Magnuson, Robertson, Hickenlooper, Cotton and Bennett; the Speaker, Messrs. Albert, Boggs, Ford, Arends, Morgan, Stagger, Patman, Adair, Frelinghuysen, Springer, Widnall, and Mrs. Bolton.
All the relevant agencies are on board (DOD, CIA, Commerce, Treasury, Ex-Im Bank).
I would vote yes—but you know my prejudice in favor of bridge-building (in terms of foreign policy, and in terms of a balanced Presidential posture against the background of Vietnam).