43. Memorandum From the Under Secretary of the Treasury (Walker) to President Nixon 1

Senator Gore is successfully filibustering the authorization bill for a U.S. quota increase in the International Monetary Fund, and contributions to the World Bank, the Inter-American Development Bank, and the Asian Development Bank. As is indicated in the attached excellent article from today’s Washington Post,2 all efforts to obtain a vote have failed.

These efforts are likely to continue to fail. If so, such failure would constitute at least a temporary—and perhaps a longer lasting—[Page 103]setback to your policy of shifting toward multilateral aid (i.e., as in the Peterson Report).

The only courses of action now open seem to be:

(1)

A call from you to Senator Mansfield urging him to put the pressure on Gore—through long sessions, suasion, or perhaps cloture—to allow a vote on the merits.

(Yesterday’s procedural vote on recommittal indicates strong Senate sentiment for passage of legislation intact.)

(2)
Acceptance of a Gore amendment to hold back the “soft loan” authorizations for IDB and ADB, so that the IMF quota increase, and a nominal rise in our World Bank capital, could pass this session.

Only you can judge the drawbacks of your approaching Mansfield as suggested. He might or might not be cooperative. If cooperative, there would be a fairly good chance that he could beat Gore.

But it seems to me that there is much more at stake here than mere passage of this bill at this time. It seems to me that Mansfield should understand clearly that weak leadership efforts on his part on Administration legislation—especially legislation with which he fully concurs—will not go unnoticed at the highest level. As I have stated in other memoranda to you, I am convinced the coming two sessions of Congress are going to be most difficult from our standpoint, and I think Mansfield should understand that we are going to fight hard for our programs.

The advantages of moving on the IMF and World Bank portions are strong: we would save $130 million in “special drawing rights” which we must claim, through the authorization legislation, before January 1, 1971. But the disadvantages are also important: With the third replenishment of the International Development Authority (soft loan window of the World Bank) coming up, we would be presenting to Congress next year requests for total “soft loan” funds amounting to a whopping $2.1 billion ($1 billion for IDA, $100 million for ADB, and $1 billion for IDB). This would be in addition to any large foreign aid request the Administration may forward to the Hill next year.

Although passage of so large a measure would not be impossible, it would certainly be difficult—especially in view of the fact that our Republicans in the House, who responded loyally to your requests in this session on this legislation, would have to vote for the same measure all over again.

The other great disadvantage of splitting the bill is clearly described in the Post article—the blow to our prestige in Latin America, especially in view of the fact that our friends to the South view the IDB capital increase as our major contribution to your new “mature partnership” in Latin America. The timing is especially [Page 104]unfortunate in the light of the announcement that Ortiz Mena will head the IDB.3

Recommendation: That you call Senator Mansfield requesting him to use all of his persuasion and powers of leadership to bring the measure, intact, to a vote in this session.

Charly

(Secretary Kennedy, who is out of town, strongly supports the above recommendation.)

  1. Source: National Archives, RG 59, Central Files 1970-73, FN 10 IMF. No classification marking. Attached to a December 15 memorandum from Secretary Rogers to the President endorsing Walker’s request that the President call Senator Mansfield in an effort to bring the legislation up for a vote.
  2. Not printed.
  3. Antonio Ortiz Mena, who until August 1970 was Mexico’s Minister of Finance, had been elected with U.S. support as President of the Inter-American Development Bank at a special meeting of the IDB’s Board on November 27. Argentina and Venezuela had also put forward candidates for the position, apparently with some support elsewhere in Latin America, and the election had been contentious. Secretary Kennedy summarized the issues in a December 10 memorandum to President Nixon. (Washington National Records Center, Department of the Treasury, Secretary’s Memos/Correspondence: FRC 56 74 A 7, Memo to the President—September-December 1970)