48. Memorandum From the President’s Special Assistant (Rostow)1

MEMORANDUM FOR

  • Secretary Rusk
  • Under Secretary of the Treasury Barr
  • AID Administrator Gaud
  • Budget Director Schultze
[Page 118]

SUBJECT

  • Meeting with the President on OAS Summit Preparations on March 1, 19672

So that the participants in the meeting will have the same understanding of the decisions made by the President, I recapitulate them as follows:

1. Standby resources for integration adjustment assistance

The President approved obtaining Congressional support for the United States providing standby resources through the IDB to be matched by the Latin Americans for integration adjustment assistance to facilitate the transition to a fully functioning Latin American Common Market once appropriate steps have been taken by the Latin Americans toward progressive establishment of such a Market. The President agreed that in discussions with Congress an order of magnitude figure of ¼ and ½ billion dollars, to be furnished over a period of years (probably not beginning until 1970), could be used.

Under Secretary Barr observed that Congressman Reuss is not in favor of economic integration and can be expected to oppose adjustment assistance. The President asked Secretary Barr and Ambassador Linowitz to speak with Congressman Reuss in the light of the Buenos Aires meeting decisions.

2. Replenishment of the IDB/FSO

The President directed that authorization for 3 years and appropriation of $300 million for the first year be sought during the current session of Congress.

3. Additional Alliance for Progress assistance for education and agriculture

The President agreed to increase Alliance for Progress assistance for education and agriculture by $100 million in FY 1968 (it is already in the budget) and an average of $200 million for the following four years, dependent on demonstrated need and self-help.

He expressed a preference for obtaining a specific Congressional commitment for the full amount, but agreed to be guided by what Congressional leaders think should be done about the Summit package price tag in the Joint Resolution. (See paragraph no 5.)

In response to Budget Director Schultze’s observation that a substantial portion of the increase for education and agriculture would [Page 119]necessarily be for projects with a high local cost component, the President said that he understood this and wanted the funds to be made available for sound projects in the two sectors with this understanding.

4. Modification of tying arrangements for capital project loans to permit hemisphere-wide procurement

The President agreed to modify tying arrangements in our loan policy toward Latin America with respect to project, but not program or local cost, lending to permit hemisphere-wide procurement after the Latin Americans begin major steps toward a Common Market and with subsequent tying to the US through the Special Letter of Credit procedure.

Under Secretary Barr asked that Treasury’s opposition to the modification be recorded.

5. Joint Resolution on the Summit

The President reviewed and approved the Joint Resolution (copy attached)3 and directed that consultation on the Resolution begin right away. The process should be started with the Congressional delegation that went to the Buenos Aires meeting: Senators Smathers and Hickenlooper, and Congressmen Selden and Mailliard. Senator Mansfield should be contacted next. Further action will depend on the advice obtained from these contacts. The President is prepared to meet with the Congressional leadership if this is desirable and necessary.

The President also directed that State brief the Council for Latin America on the resolution and get them to sell it to key Congressional members such as Dirksen, Hickenlooper and Ford. In response to Ambassador Linowitz’s inquiry as to whether he would be willing to receive the Council for Latin America group when they meet in Washington next week, the President replied that he would if he were in town.

With respect to the text of the draft joint resolution, the President accepted Secretary Rusk’s recommendation that the paragraph on Europe be deleted.

The President expressed a preference for including a global cost figure for the Summit package in the final operative paragraph. He thought the Congress would also want to specify what it was agreeing to and would not be satisfied with amounts expressed only in hearings. But he agreed that Congressional leaders should be sounded out on this point. He is prepared to go the way they recommend.

WR
  1. Source: Johnson Library, National Security File, NSC Histories, OAS Summit Meeting, Chron. 4/1/66–3/13/67. Confidential.
  2. According to the President’s Daily Diary, Johnson held a meeting on March 1, 5:42–6:50 p.m., “to discuss plans for Latin American Summit meeting.” The attendees included Rusk, Sayre, Linowitz, Gaud, Rostow, Bowdler, Under Secretary of the Treasury Joseph W. Barr, and Deputy Assistant Secretary of the Treasury for International Affairs Winthrop Knowlton. (Ibid.) No other record of the meeting was found.
  3. Attached but not printed.