25. Editorial Note

In early 1970 the Nixon administration began to focus intensively on the question of replenishment of the resources of the Inter-American Development Bank (IDB). In a March 13, 1970, memorandum to President Nixon, Secretary Kennedy outlined the points on IDB replenishment he would be discussing with the Latin Americans but did not yet require Presidential decision. In his memorandum he referred to the President’s message to the IA-ECOSOC meeting in Caracas (read by [Page 59] Assistant Secretary Meyer on February 4), which indicated that a substantial amount of the $540 million FY 1971 expanded multilateral assistance account would be available for IDB replenishment. (Washington National Records Center, Department of the Treasury, President—January-April 1970) For text of the President’s message, see Public Papers of the Presidents of the United States: Richard Nixon, 1970, page 80. The Department of State provided its suggestions on IDB replenishment in a March 19 memorandum from Under Secretary Samuels to Secretary Kennedy. (National Archives, RG 59, Central Files 1970-73, AID (IDB) 9)

In a follow-up memorandum to the President on April 3, Kennedy presented issues on IDB replenishment for comment and approval before his departure on April 17 for the IDB Governors’ meeting in Uruguay (April 20-24). Among other things, he proposed a U.S. contribution of $1.725 billion (broken down in various forms). (Washington National Records Center, Department of the Treasury, Secretary’s Memos/Correspondence: FRC 56 74 A 7, Memos to the President—January-April 1970) In an April 13 memorandum to Kissinger, Vaky and Bergsten recommended that the President approve Kennedy’s proposal. On this memorandum Haig wrote that Kissinger might want to clear for the President, and Kissinger wrote, “I signed off.” (National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM-54)

In National Security Decision Memorandum 54, April 16, Kissinger noted that the President had approved Kennedy’s proposal for the U.S. financial contribution (including the component figures) over 3 years to the replenishment of the IDB resources and authorized Kennedy to support this position, subject to legislative authority, at the meeting of the IDB Governors. President Nixon also approved positions on three policy issues (the one on performance conditions required no decision): use of soft-loan resources, broadening of IDB membership, and level of Latin American countries’ contributions to the Fund for Special Operations (FSO). (Ibid.)

Kennedy reported that, at the IDB Governors’ meeting, most of the Latin Americans refused to accept the U.S. position of an increase in their contribution to the FSO from $300 million to $450 million when the United States wanted to keep its own contribution at $300 million. Believing the impasse on the question would likely prevent agreement on IDB replenishment, Kennedy requested the President’s approval to increase the U.S. contribution to $1 billion in return for a Latin American increase to $500 million. (Telegram 711 from Montevideo, April 22; ibid., Nixon Presidential Materials, NSC Files, Subject Files, Box 333, IADB)

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In an April 22 memorandum to Kissinger, Vaky argued that the revised U.S. position would still achieve the same 2:1 ratio the delegation was seeking, and the marginal U.S. increase “would not adversely affect the prospects for Congressional approval if we can achieve a substantial increase in the Latin contribution to $500 million.” On the basis of an earlier conversation with Kissinger after which Kissinger had concurred in the U.S. increase, Vaky cabled Kennedy, in White House telegram 535 to Montevideo, April 22, the authority to negotiate the increase while reserving the option of deferring partial payment until the fourth year. (Both ibid.) In telegram 742 from Montevideo, April 24, Kennedy reported that the IDB Governors had agreed to the U.S. terms on the replenishment of the IDB’s ordinary capital and had also acceded to the FSO contribution on the revised $1 billion/$500 million basis. (National Archives, RG 59, Central Files 1970-73, AID (IDB) 9)

On April 25 Kissinger signed a memorandum to President Nixon indicating that he had approved the U.S. negotiating position at the IDB meeting and that Kennedy would report to the President more fully on the highly satisfactory outcome of the meeting upon his return to Washington. (Ibid., Nixon Presidential Materials, NSC Files, Subject Files, Box 333, IADB)