among the peoples of the world, might well be requested to expand its program with respect to Latin America. If the Commission were willing to do this, pertinent educational and informational materials could be distributed by the nation-wide organizations represented on the Commission, and informative group discussions on Latin America might develop in the cities and towns and on the farms all over the country. Universities, secondary schools, and elementary schools could be encouraged by the Commission to do more in their curricular and extracurricular activities.

(4) It is my hope that several of the large foundations of the United States will make additional scholarships available to students of Latin America, especially to students in those countries where exchange difficulties make travel to and study in the United States difficult. Further, one or more of the foundations, with the cooperation of a university, could perform a valuable service by establishing as a pilot project a bi-national institute in the United States, modeled on those now functioning in several Latin American nations. The institute should be largely self-supporting, and should teach Spanish, Portuguese, and Latin American history and literature. Students should be of both school and post-school age.

(5) United States business firms now operating in Latin America might help their public relations and promote understanding by increasing their support of the American schools and the bi-national institutes in their host countries, and by offering scholarships and training grants to talented young Latin Americans.

(6) Attitudes toward United States business enterprises now operating successfully in Latin America have been discussed earlier in this report. United States companies in Latin America are playing an important role in promoting better understanding and friendship among the peoples of the American republics. They should seek constantly to ensure that their staffs are good ambassadors as well as good businessmen. By their actions and their relations with the public they can do still more to increase the understanding of the contribution which enlightened business methods are making to the local economies.

(7) In addition to the officially-sponsored exchange-of-persons programs, there are opportunities for distinguished American scholars who speak Spanish or Portuguese to lecture in universities in many of the American republics..

(8) In Massachusetts, New York, Florida, Louisiana, California and Texas--and no doubt in other states are private associations whose major purpose is to develop better understanding in the United States of Latin American culture, histories, problems, and aspirations. Some have active business, educational, and cultural services. They provide forums for distinguished Latin American visitors who come to the United States. This type of association merits the thoughtful consideration of states and cities not now having such institutions. The large number of Foreign Policy Associations in a multitude of American communities might well give special attention to our relations with Latin America.

(9) We should look to the free mass communication media of the United States, and especially to the press associations and newspapers and magazines with Latin American correspondents and circulations, as a major means of promoting essential understanding. . . . It would be helpful if these media regularly found it possible to do more than report the spectacular occurrences in the Latin American countries. A revolution will merit widespread attention by the press, radio and television, but the long-term underlying causes may not. Yet the basic causes may have more to do with the future welfare of our country--and with international relationshipsthan did the revolution which brought new leaders to power.

(10) The Tenth Inter-American Conference, which is scheduled to be held at Caracas in March 1954, will present a timely opportunity to the United States to emphasize our positive interest in strengthening efforts to increase intercultural understanding as the foundation of mutually advantageous cooperation in all relevant areas.1

STRENGTHENING ECONOMIC COOPERATION

Before undertaking to make specific recommendations on strengthening our economic cooperation with the countries of Latin America, I feel impelled to express the view that the greatest contribution which the United States can make to the well-being of the world as a whole is the maintenance of a high level of economic activity in this country at relatively stable prices.

In this report, my associates and I have described conditions which affect economic development in Latin America. We have also discussed practices in certain countries which deter the flow of private and public capital needed for balanced development. Whether such conditions are changed is up to the nations involved. Some of my recommendations for strengthening economic relationships must be made on the assumption that deterrents to the flow of capital will be altered, or must be considered only with respect to those nations where serious deterrents do not exist.

I specifically recommend:

(1) That the United States adopt and adhere to trade policies with Latin America which possess stability, and with a minimum of mechanisms permitting the imposition of increased tariffs or quotas. I consider this matter of stability and consistency the outstanding requirement.

(2) That the United States adopt a long-range basic-material policy which will permit it to purchase for an enlarged national stockpile certain imperishable materials when prices of such materials are declining.

1 See address by the Secretary of State before the Conference, Mar. 4, 1954; infra.

I recognize that the implementation of such a policy would presumably have to await the time when United States fiscal resources are not severely strained by defense expenditures; further, this policy is now partly in effect in the defense stockpiling program.

(3) That the United States carefully examine whether or not it would be appropriate to amend present tax laws to remove existing obstacles to private investment abroad.

(4) That public loans for the foreign-currency costs of sound economic development projects, for which private financing is not available, go forward on a substantial scale, provided, of course, that the borrowers take the necessary measures to ensure that they are good credit risks.

1

It is generally agreed that the International Bank for Reconstruction and Development should have the principal responsibility for making development loans, as compared with the shorter-range lending operations of the United States Export-Import Bank. However, it seems essential that the United States maintain a national lending institution to make sound development loans which are in our national interest, but which might not be made by an international agency.

(5) That the United States stand ready to give appropriate technical help to the Latin American countries that express a desire to work out more orderly ways of determining how their resources, including their borrowing capacity, can make the greatest contribution to their economic development. It is noteworthy that the International Bank has made valuable contributions in this field. Often, public loans for transportation, power, and harbor development, for example, will lay the foundation for sound industrial development and thereby encourage private enterprise, both local and foreign. The lack of coordination in planning and lending now, however, is notable in some countries.

The purpose of technical assistance in this area should be to establish priorities of need, to develop project plans in ways that satisfy lending institutions, and to do this within the credit worthiness of each nation.

(6) That, in very unusual circumstances, the President of the United States be in a position to make grants of food from our surplus stocks to Latin American countries.

Everyone recognizes the validity of food grants to meet problems caused by famine. But a no less serious human emergency exists when a nation which normally imports a substantial percentage of its food is unable to buy and its people are on the verge of starvation. If food grants should be made, it would be appropriate to require the government receiving the grants to set aside counterpart funds, equal to the value of the grant, to be used in expanding its domestic agricultural production.

1 Established under Articles of Agreement, July 22, 1944; A Decade of American Foreign Policy, pp. 251–273.

2 See Export-Import Bank Act of July 31, 1945; 59 Stat. 526.

(7) That the technical cooperation program in Latin America be expanded.

The provision of expert technical assistance has been and continues to be an effective method of helping the people of Latin America attain better health, higher industrial production, better education, improved agricultural production, and higher standards of living. It has made firm friends for the United States among governments and individual citizens throughout the Hemisphere.

We should continue the "servicio" type of administration-a device in which local people and United States technical personnel share responsibility for the work.

For most of the technical cooperation work in Latin America today, the governments of the countries in which the work is done provide two to three times as much of the funds as does the United States. In some countries the local contribution runs eight or nine to our one.

(8) That we continue our vigorous support of the various technical agencies operating as an integral part of our activities in the Organization of American States.

Particularly should we continue to support the work of the InterAmerican Economic and Social Council and to encourage that organization to expand its successful multilateral technical cooperation program among the nations of the Hemisphere.1

(9) That our Government also continue to support the work of the International Monetary Fund which has extended helpful short-term financial aid and valuable technical assistance to the nations of Latin America on their monetary and exchange problems. We should also give continuing support to the work of United Nations agencies such as the Economic Commission for Latin America, with headquarters in Chile, which is helping the Latin American governments to further their economic development through use of their own resources.

Finally, I urge the Administration, the Congress, and the people of the United States to take a long-range view as we consider how we may strengthen our economic relations with the nations of Latin America.

There is no doubt in my mind about the future of Latin America. Her people are on the march. They are determined to improve their standards of living. They have the resources and the manpower to do so.

Latin America is destined to be an economically powerful area of the globe. While it will always have economic relations with Europe and other parts of the world, its firmest and most extensive relations can and should be with the United States.

In the long view, economic cooperation, extended to help the people of Latin America raise their level of well-being and further their democratic aspirations, will redound to their benefit and to ours.

1 See supra, docs. 19 and 20.

Working together, the nations of this Hemisphere can, if history should so decree, stand firmly against any enemy in war, and prosper mightily together in times of peace.

22. UNDERSTANDING AND COOPERATION: Address by the Secretary of State at the Second Plenary Session of the Tenth Inter-American Conference, Caracas, March 4, 1954 (Excerpt) 1

The United States recognizes that the freedom and independence which we all covet, and which we are resolved to preserve, is based not only on political and moral considerations but also on economic and social well-being.

The United States Government is confident of its ability to maintain the health and vigor of its own national economy. President Eisenhower, in his recent economic report to the Congress,' said that "The arsenal of weapons at the disposal of the Government for maintaining economic stability is formidable." This is important not only for ourselves but also for others. A high level of economic activity within the United States creates a demand for imports, and provides the means for continued economic development in this hemisphere and elsewhere.

It is, of course, a fact, and properly a fact, that no government operates primarily in the interests of other peoples. The first responsibility of every government is to its own people, for whom it acts in a trustee capacity. Nevertheless, it is also true that no government adequately serves its own people unless it also is concerned with well-being in other countries.

Nations generally have it within their own power to do most of what is required for decent and healthy social conditions for their people. The task is thus primarily a domestic one. But there is need for international conditions which facilitate a mutually advantageous exchange of goods and a mutually advantageous flow of capital from the more developed countries to the countries which are less developed. That is, for all, a matter of enlightened self-interest.

I can assure you that President Eisenhower sees as clearly as any living person that the welfare of the United States is related to that of others. When last year our President asked his brother to visit the South American countries, it was primarily that this message might be brought to you in a manner so authentic that no one could doubt it.

Dr. Milton Eisenhower's report 3 has been brought to the attention of our government departments with a request that they do all within

1 Tenth Inter-American Conference, Caracas, Venezuela, March 1-28, 1954. Report of the United States Delegation (Department of State publication 5692. 1955), pp. 46-50.

Economic Report of the President Transmitted to the Congress January 28, 1954; H. Doc. 289, 83d Cong., 2d sess.

3 Supra.