Foreign Relations of the United States, 1964–1968, Volume XXIX, Part 1, Korea

198. Action Memorandum From the President’s Special Assistant (Rostow) to President Johnson¹

Washington, May 9, 1968, 2 p.m.

SUBJECT

• Loan to the Korean Reconstruction Bank

Attached is a Zwick-Gaud² request for your approval to proceed with a $15 million loan to the Korean Reconstruction Bank, the major source of development finance for Korean industry. The Bank has helped spur the rapid growth of the manufacturing sector, which increased output by 18% in 1966 and 22% in 1967.

The Korean Government will increase its own subscription to the Bank by $23 million.

The proposed loan would be the last AID loan to Korea in FY 1968 for a total of $30 million, as against $61 million last year.

Proceeds from this loan are to be used exclusively to buy machinery, equipment and services in the United States. Treasury agrees that the loan would have a minimum adverse effect on the U.S. balance of payments.

State also concurs in the loan.

I recommend that you approve the proposed loan.

Walt

Approve³

Disapprove

Call me

1. Source: Johnson Library, National Security File, Country File, Korea, Memos, Vol. VI. No classification marking.
2. Two memoranda attached but not printed.
3. This option is checked.