LETTER TO WOLSTAN CROCKER BROWN FROM (Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R003800020056-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 12, 2016
• Document Release Date: March 4, 2002
• Sequence Number: 56
• Publication Date: June 27, 1958
• Content Type: LETTER

Appro
S R WI A I
T A
CENTRAL INTELLIGENCE AGENCY
OFFICIAL ROUTING SLIP
TO
NAME AND ADDRESS
INITIALS
OAT
Col. Grogan
2
3
4
5
6
ACTION
DIRECT REPLY
PREPARE REPLY
APPROVAL
DISPATCH
X
RECOMMENDATION
X
COMMENT
FILE
RETURN
CONCURRENCE
INFORMATION
SIGNATURE
Remarks :
For comments/recommendations re reply.
r 9
u-P
-11A tAl
U,~
Suspense 25 June 58
FOLD HERE TO RETURN TO SENDER
SS AND PHONE NO.
DATE
Asst. to the DCI
19 June
UNCLASSIFIED CONFIDENTIAL
SECRET
FORM N0. Replaces Form 30-4
I APR 55 237 which may be used.
(40)
U. S. GOVERNMENT PRINTING OFFICE : 1955-0-342531
STAT
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2 7 JUN 1953
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BAWE
WOLSTAN CROCKER BROWN ASSOCIATION
FOR WORLD EDUCATION
336 HILLSIDE AVENUE
DOUGLASTON 63, L. I., N. Y.
it Allen Dullas
U.S_. Information agency
Washington, D.C.
Executive Registry 1
V7--'
June 15, 1958.
em
1 believe you will rember introducing me to
Mr 14elson Rockefeller in your office several years ago when we
vere talking about the International Trade and Credit Market
Bill. At the time Dr. Fisher adviser to Mr Rockefeller approv-
of the bill.
From late statements by you on this situation I
believe you will find the enclosed copy of a letter to C;h arles
Harley of the Treasury Department interesting.
The system suggested has had approval from leaders
of both parties. I spent the last week in May in iiashington and
had confrences in the state and TDe asury departments
You may have noted the Mr. Adlai Stevenson in his
last speech demanded just such a development,.
Let me know if you would like more :.information on
this situation.
Yours sincerely,
1
Wolstan Crocker Brown.
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STATOTHR
WOLSTAN CROCKER BROWN
June 5, 1958
Mr, Charles Harley
Finance Committee
Treasury Department
Washington, D. C,
Re: INTERNATIONAL TRADE
AND CREDIT MARKET
Dear Mr. Harley:
Our present system of loans to Latin America for trade and development has
evolved in a period of expanding trade and credit.. If these loans are to be
repaid, as contracted, a high volume of trade must continue and there must be
at least an average prosperity in the m stern Hemisphere. Most of our present
loan projects in these countries are keyed to this assumption.
You informed me that the officials of the Treasury Department are now worried
by trade and credit conditions developing in Latin America and many other parts
of the world.
This attitude on the part of Treasury Officials is obviously'justified by an
ever--growing threat of credit breakdown from many directions, and the very frank
threats and sabotage of the Soviet Union against the U.S.A.
It does not take a prophet to see that a new system of loans and assistance must
be evolved in the near future. In Latin America the entire credit basis of many
countries is being weakened by competition from an awakening Africa. The
marketing of coffee, fibres and metals from other countries will force the
development of a new credit base in Latin America as a whole.
With French credit bogged down to a near-vanishing point, we must nevertheless
prop up their economy against the Reds who await just such an extremity. The
same condition, of course, exists in many parts of the world. The great strain
on our monetary powers demands a reconstructed strategy based on the greatest
possible credit stability, starting with the Western Hemisphere.
We must face the facts. Our present system of loans and assistance is based
on a high level of prosperity in Latin America that is receding with no promise
of quick revival. To stay with the present methods would be to invite a credit
impasse that is recognized as the ideal condition for expanding communism.
If a change is to come and a safe degree of stability maintained, it must come
before a crisis develops. You have Informed me that the present loans to Latin
America "approach" the system outlined In the provisions of the International
Trade and Credit Market Bill only when a loan is made to a Latin American
country whose credit is very weak, I intend to show that the present system
of dealing with weak Latin American credit approaches the I.T. & C.M. System
in one way only, and that it lacks many elements of strength that are now
necessary and found in the I.T. & C.M. System,
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I.T. & C.M. System - 3
June 5, 1958
C. The gold that secures this loan does not leave
the U.S.A., and the money that pays this loan
does not leave the U.S.A.
D. The U.S.A. gains abetter market in Colombia
for our products, for Colombia will have more
exchange to buy our goods.
E. This type of loan, executed'with all countries
in the Western Hemisphere, could provide over
$4,,000,000,000 for international trade and
other constructive purposes.
F. Greater markets should develop in all Western
Hemisphere countries with this system as a firm
basis for trade and mutual development.
G. Before the U.S.A. had one money, there was
financial chaos; but with the issuance of a
single medium of exchange this country became
industrially dynamic and all the States
prospered. This new international, gold-backed,
non-inflationary money would promote trade and
dynamic unity in the Western Hemisphere.
The new International Bank and Market is now as
necessary to the financial operations of the
U.S.A. as is the United Nations to our political
international strategy...
Without the United Nations, the war in Korea and many other crises would have
put a far more serious burden on the U.S.A. And without the U.N. prestige,
our present world power would be greatly lessened.
The same gain in international strength is open to us now in this new Inter-
national Bank and Market. The strict guarantees of basic credit we would'demand
for the new loans would not "hurt the feelings" of Latin American nations, for
the Market and Bank would be international,, just as the U.N. is international
and therefore can execute its demands'with a majority backing. If these
demands were made by the U.S.A. alone, there could have been resistance and
chaos.
The new International Bank and Market set up in the Western Hemisphere could
gradually be extended to Europe and all free nations. A basic and dynamic
credit floor could be laid for all Western Nations. The new international
exchange could be restricted very largely to the use of free nations by the
threat of fines and dismissal from the new international operation. We are
restricting our trade with Russia and Red China. This operation would be a
crucial weapon in the Cold War.
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l.T. & C.M. System
June 5, 1958
At present, therefore, when a Latin American country is considered to have weak
credit, a careful study of her trade with the U.S.A. is made. The loan is then
limited by the normal flow of dollar exchange to that country from the U.S.A.,
and the normal capacity of the borrowing country to repay. This, however, does
not apply to the majority of the present loans that are now based on a receding
credit capacity in many Western Hemisphere countries.
Why the I.T. & C.M. System can and must bring
a .g,radua l strengthening of trade and credit in
Latin America and then in all free nations...
An I.T. & C.M. loan would be studied, first, from the standpoint of the normal
flow of dollar exchange to the country applying for the loan.
Secondly, the year by year imports from the country to the U.S.A. would be
checked to find what imports are not indigenous to the U.S.A. and therefore a
necessary continuous yearly import to the U.S.A.
Thirdly, the borrowing country would then agree that the repayment of this
loan would be made by U.S.A. importers from funds due for imports from this
Latin American country. The payments would be made to the International Bank
set up for this purpose.
As an example of'this operation: An International Bank and Market would be set
up in the U.S.A., empowered to issue a new international money based on a gold
reserve, Each nation joining this bank and market would own some of the gold
reserve held by the bank., and would trade with each other on the same basis.
If Colombia, for instance, applies for a loan of 20 million dollars from the
U.S.A. which owned a specified amount of the gold reserve in the International
Bank and Credit Market System, the loan would be made as follows: 20 million
dollars in gold-backed International money would be issued to Colombia. The
loan would then be repaid by Colombia at the rate of one million dollars per
year plus interest to the credit of the'U.S.A. in the I.T. & C.M. Bank. This
repayment would come from our importers, who would have been notified that ten
percent of the money owed the Colombian exporters should be forwarded to the
Bank, to the credit of the U.S.A., until the yearly payment had been completed.
Ninety percent of'the money owed to the Colombian exporters would be sent to
Colombia as usual, and the ten percent sent to the International Bank would
then be paid in Colombian exchange to the Colombian exporters by their govern-
ment which made the loan.
The following are obvious advantages of this System:
A. This type of international loan would have the highest
safety value, as you acknowledged.
B. The vexing problem of limited dollar exchange would be
solved for Colombia or any other Latin American
country, for they could pay the U.S.A, loan in their
own exchange.
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I.T. & C.M. System - 4
June 5, 1958
A lack of the vision and delayed understanding of this new Bank and Market could
be a greater U.S.A. lag than we are now experiencing in missiles. If Russia
starts this new international unity in markets and money, the position of the
U.S.A. would be immediately weakened throughout the world.
Very truly yours,
Wolstan Crocker Brown
Former Monetary Adviser to the
Republican National Committee
HISTORY OF THE INTERNATIONAL TRADE AND
CREDIT MARKET BILL...
The I.T. & C.M. Bill would have been operative in 1940 but for the
opposition of one man'. Harry Dexter White. I'do not know why White
caused his underground opposition to the Bill, but he succeeded in
delaying the building up of a basic credit floor in the Western
Hemisphere that would be of value at this critical period facing us
now in the Western Hemisphere.
After the Bill had been introduced in the House by former Repre-
sentative Hamilton Fish, it was assured of backing In both Houses
by Republicans. Representative Jesse Walcott, Monetary Adviser to
the House Republicans, gave the Bill the highest praise. To quote
his words: "The Bill is very meritorious." Senator Vandenberg
became as enthusiastic and wrote of the Bill as "a unique way of
correcting a very difficult situation". Many Democrats held the
same opinion.
(This letter is being
mimeographed because
so many people want
this same information.)
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