560. AL/12–2647: Telegram

The Acting Secretary of State to the Embassy in Cuba

secret

763. For Wilcox and Nufer1 from Daniels and Smith.2 Subject further possible comment following receipt detailed info promised your 783 Dec 26 cannot suggest any easy method for resolving current difficulties with delegates of other American republics at Habana.3 As you have learned progress reports economic agreement here we attempting develop reasonable workable basis at Bogotá4 for future economic cooperation, stressing technical coop, private investments, self-help before seeking external financial aid, and use existing facilities for public financing economic development. Hab agreement must stand on its own and any agreements reached should not be conditional on any action at Bog. In fact, failure to reach agreement at Hab would probably create atmosphere in which mutually satisfactory economic action Bog made more difficult.

You may wish to demonstrate by record our Govt loans (example Chile) and other cooperative measures over 10 yrs that we in fact encouraged development and diversification; if this fails, our record at least clear and few strongly opposed countries would have to remain out ITO and not be allowed prevent general agreement otherwise.

It may also be helpful to call attention cautiously and informally to facts regarding Executive Branch proposal on procurement and financing [Page 819] of exports to Europe under ERP as made public with President’s message to Congress December 19.5 It should be stressed, of course, that this proposal is simply an Executive Branch position and can in no way commit Congress. Use of proposal for bargaining purposes at Hab is therefore not desirable. Understanding of these facts however should help to counteract indifference of other American countries to European recovery to which you refer. Detailed outline of ERP as presented to Congress airmailed you today.

The proposal may be summarized briefly as follows:

Both European recovery and continued prosperity of Western Hemisphere require solution to problem of financing export surplus to Western Europe of other American countries as well as United States. We expect other American countries to contribute to this financing. We recognize, however, that financial contribution which these countries can make is limited. Consequently, we have recommended to Congress expenditure of United States funds to finance exports from other American countries. Such funds would, of course, provide dollars to pay for imports from the United States. In view of large volume of exports called for from other American countries (including Canada) and limited ability of many of other countries to provide financing, dollar expenditures for this purpose should be substantial. Justification presented to Congress, covering the period April 1, 1948 through June 30, 1949, will be based on estimate of $2.6 billion for this purpose. [Daniels and Smith.]

Lovett
  1. Albert F. Nufer, U.S. Ambassador to San Salvador and Political Advisor, U.S. Delegation.
  2. Paul C. Daniels, Director, Office of American Republic Affairs; and H. Gerald Smith, Special Assistant to the Director, Office of American Republic Affairs.
  3. The U.S. Delegation at Habana in telegram 783 (December 26), not printed, feared that the Latin American Delegates were working to prevent agreement on the International Trade Organization charter. The “theme of opposition repeated interminably is charter deliberately unfair to Latin countries and its sponsors seeking to prevent their economic development.

    “Latins indifferent to European recovery and resent fact we are generally in agreement with Europeans on trade policy.… Latins regarding Habana as dress rehearsal for Bogotá. Have introduced many Bogotá proposals here.” (560.AL/12–2647)

  4. For documentation regarding the Inter American Conference at Bogota, see vol. ix, pp. 1 ff.
  5. For text see Public Papers of the Presidents: Harry S. Truman: 1947 (Washington: Government Printing Office, 1963), pp. 515–529.