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98 Notes on Conversation at the State Department

Washington, 14 September 1950

SECRET

1. The Minister outlined the genesis of the Spender Plan and the steps taken towards its fulfilment. He said that he had approached the question from the angle of stopping the spread of Communism which he conceived as an economic rather than a military problem. He recognized that it was necessary to stress the humanitarian aspect. He also pointed out that its fulfilment would mean that gains would accrue to the Western world insofar as raising the. standard of living in the area would increase the prospect of trade and would also mean a contribution to the dollar earnings for the sterling area.

2. He stated that he had insisted upon Sydney as the original meeting place for the Conference as the proposal needed momentum and Australia was sincerely interested in the project and would be in position to supply such momentum.

3. He said that at the Sydney Conference Australia had taken the view that the need was immediate whereas the United Kingdom was concerned with the long range view. The Sydney Conference was a compromise that accepted the technical assistance proposals of Australia, the long range issues which involved surveys and planning were coming up in London.

4. The Minister emphasized mutual aid character of the proposal.

5. Minister said that he thought the Commonwealth aspect of the proposal should be obliterated as soon as possible, that is when other countries came in, when it could be described in regional or geographical terms.

6. Minister was asked what other countries might come in to the plan. He mentioned Netherlands and France. France because of its interest in Indo-China and Netherlands because it had a large number of technicians who were unemployed because of developments in Indonesia. State Department officials were not sure whether this was intended to be a complete answer and indicated a fear that the white nations might predominate.

7. Minister was informed that U.S. was interested in the plan but was concerned lest a report should be produced in London pointing the finger too directly at the United States with regard to the missing component. They said that if it were too direct it would make public relations difficult and also Congressional relations. It might convey the impression that something had been worked out by a foreign organization which had then passed the burden to the United State to take up.

8. State Department officials also said that so far as South Asia was concerned, they had been giving thought to the economic problems and had been discussing it in general terms with Congress. However, their planning was not specific at the moment.

9. Minister stated that he thought that the economic conditions in India were actually deteriorating and that it was not just a question of under-development. He regarded this as a very real danger. Department said they were aware of it. They also said that they were gratified that India was participating in Commonwealth planning in view of India's general attitude. They thought that any U.S. approach would be less attractive. They also felt that the stressing of mutual aid was important in relation to India.

10. Minister said that he hoped after the Ministerial discussions that non-Commonwealth countries would be brought in.

11. The Minister said that the [programmes]2 which had been drawn up by India and Pakistan were regarded as being extremely good.

12. The question of co-ordination between U.S. projects and the Spender Plan projects was stated as being a problem for consideration but was not discussed in detail.

1 Spender spoke with a group of State Department officers which included W.L.Thorp, Assistant Secretary of State for Economic Affairs.

2 Word in square brackets added by hand.

Last Updated: 10 January 2017

Category: International relations

Topic: History