Social Progress Trust Fund, which would not be replenished. As of the end of 1964, 18 member countries had taken the necessary steps to approve the increase.96

SECURITY ISSUES AND SALES OF LOANS

The callable capital of the Bank serves, in effect, as a guarantee for the bonds which the Bank issues. The recent increases of $1 billion in the callable capital-which became effective in January 1964therefore strengthened the Bank's capacity to borrow funds in the capital markets of the world. In the period under review, the Bank sold three bond issues in the total equivalent of $123.4 million in the United States and abroad. In July, the Bank floated an issue of 60 million deutsche marks ($15 million equivalent) in the Federal Republic of Germany. In September, the Bank borrowed 3 million pounds sterling ($8.4 million equivalent) in the United Kingdom, and in October, the Bank made a public offering of $100 million of 412 percent, 20-year bonds in the United States-the sixth issue sold by the Bank since it began operations in 1960. These transactions increased the total amount raised by borrowing to the equivalent of $273 million, of which $225 million was sold to the United States.

As a further step in mobilizing additional resources for use in its lending operations, the Bank in December entered into an agreement with the Government of Canada under which Canada will provide up to 10 million Canadian dollars to finance economic, technical, and educational projects in Latin America on very lenient terms. Under the agreement the Bank will have primary responsibility for the selection and processing of loan projects and for establishing the terms and conditions of the loans in accordance with the provisions of the agreement. Loan proceeds under the agreement will be used for the purchase of goods and services in Canada unless otherwise agreed. Loans from the fund may be granted for periods ranging up to 50 years, and may be free of interest or made under such other concessional terms as may be agreed. This is the first time the Bank has entered into an arrangement to administer loan funds of a nonmember country.

As of December 31, 1964, 55 commercial banks and other financial institutions had purchased portions of Ordinary Capital loans in the amount of $20.3 million. This compares with $7.7 million of such purchases through December 31, 1962.

The U.S. Executive Director of the Inter-American Development Bank, or his Alternate, acting on the advice of the Council, supported the decisions taken with respect to the foregoing matters.

"The increase is now in effect. On Mar. 24, 1965, Public Law 89-6 authorized the U.S. Governor of the Inter-American Development Bank to vote in favor of the resolution. The first $250 million was appropriated Apr. 30, 1965 (Public Law 89-16). [Footnote in source text.]

Document III-96

TABLE 16.-U.S. Government bilateral assistance to Latin America,1 by country, type, and program, Jan. 1 to Dec. 31, 1964

Development.

D. Canadian-United States Relations

Document III-97

Canadian-United States Discussions on the International Situation and Bilateral Matters: JOINT COMMUNIQUÉ ISSUED AT WASHINGTON BY THE PRESIDENT OF THE UNITED STATES (JOHNSON) AND THE PRIME MINISTER OF CANADA (PEARSON), JANUARY 22, 1964 1

1

Useful discussions on many matters have been held during the past two days while Prime Minister Pearson has been visiting Washington as the guest of President Johnson. The Prime Minister was accompanied by Mr. Paul Martin, Secretary of State for External Affairs. Mr. Dean Rusk, Secretary of State, was with the President.

The President and the Prime Minister had a wide-ranging discussion about the international situation. In their review of world affairs they discussed the NATO alliance and the Atlantic Community, the prospects for easing East-West tensions, the importance of practical specific initiative toward disarmament, and the current problems in Asia, Africa, and the Western Hemisphere. They will continue to cooperate fully in helping the countries of these areas move toward economic development, political stability, and peace along their borders.

The Prime Minister and the President noted with satisfaction the progress made towards the cessation of nuclear testing. They affirmed their desire to promote additional measures to ease international tensions and to support further advances towards effective disarmament. The steady development of the peacekeeping capacity of the United Nations remains for both a goal essential to the preservation of world peace.

The President and the Prime Minister examined various bilateral defense questions and noted with satisfaction that appropriate agreements have lately been concluded between their two Governments. They agreed to plan for a meeting of the Joint Ministerial Committee on Defense during the first half of this year. They reaffirmed the support of both Governments for the developing defense production sharing program, which is of mutual benefit.

The Prime Minister and the President referred to the balance of payments problems of their respective countries. They reviewed outstanding economic problems between the two countries, including certain trade and tax measures. They agreed on the urgency of successful GATT negotiations to achieve a substantial reduction of trade barriers in order to meet the goal of expanded world trade.3

2

1

Department of State Bulletin, Feb. 10, 1964, pp. 199–200.

For the text of the partial nuclear test ban treaty, see American Foreign Policy: Current Documents, 1963, pp. 1032-1034.

3 Post, doc. III-101.

4 See American Foreign Policy: Current Documents, 1963, pp. 372-374. See post, docs. XI-14 et seq.

5

The President and the Prime Minister reviewed the work of the joint Cabinet level Committee on trade and economic affairs at its meeting last September and agreed that it should meet again around the end of April.

6

The Prime Minister and the President discussed at some length the practicability and desirability of working out acceptable principles which would make it easier to avoid divergences in economic and other policies of interest to each other. They appreciated that any such principles would have to take full account of the interests of other countries and of existing international arrangements. The President and the Prime Minister considered that it would be worthwhile to have the possibilities examined. Accordingly, they are arranging to establish a Working Group, at a senior level, to study the matter and to submit a progress report to the April meeting of the Joint Committee.8

The Prime Minister and the President agreed that negotiations on the bilateral air agreement should be undertaken almost immediately, with a view to working out satisfactory arrangements on a North American basis."

The President and the Prime Minister noted the importance of shipping on the Great Lakes and the St. Lawrence Seaway and agreed to cooperate with each other and with labor and management in each country to avoid industrial strife along these waters.

Final agreement was reached on the use of the resources of the Columbia River Basin,10 and this agreement was embodied in an exchange of notes between Secretary of State Rusk and the Secretary of State for External Affairs for Canada, Mr. Paul Martin. The Columbia River Treaty signed in 1961, was ratified that year by the United States; the agreements reached today pave the way for Canadian ratification and make possible the further development of the resources of this great Basin.

At the same time, the President and the Prime Minister have joined in arrangements to establish on the East Coast the Roosevelt International Park at Campobello, New Brunswick, in memory of a President who took a keen interest in both countries and in the good relations between them.1 12

* See American Foreign Policy: Current Documents, 1963, pp. 375–377. See post, doc, III-100.

7

8

Ambassador Livingston T. Merchant was selected to represent the United States and Ambassador A. D. P. Heeney to represent Canada.

Representatives of Canada and the United States had held two rounds of meetings, concluding on May 1, 1964, and July 23, 1964, concerning the renegotiation of the Air Transport Agreement of 1949 (TIAS 1934, 63 Stat. 2489; TIAS 3456, 6 UST 6065; TIAS 4213, 10 UST 773). It was then decided to report to their Governments on the results achieved and to meet again following further study with a view to concluding the negotiations. See the Department of State Bulletin, May 25, 1964, pp. 844-845 and Aug. 10, 1964, p. 188.

10 Infra.

"TIAS 5638; 15 UST 1555.

12 See Department of State Bulletin, Feb. 10, 1964, p. 206 for a joint statement issued Jan. 22, 1964, on the subject. The agreement (pp. 206-208) is TIAS 5631; 15 UST 1504.