FOREIGN RELATIONS, 19 5 0, VOLUME I


quotas, etc.). Working-level Departmental officials are now preparing
a draft policy paper on the sterling balances which will soon come to
the Assistant Secretary level for approval and then go through Secre-
tary Acheson to the National Advisory Council.3
  2. Procedural
  E, A and S/S have jointly prepared a draft Memorandum to the
President making recommendations for interdepartmental machinery
to manage the dollar gap "campaign." Developments concerning this
draft Memorandum are:
  a) It was presented to the Secretary late Friday, January 27, and
subsequently revised as he suggested.
  b) Two supplements were prepared, the first arguing against the
use of the NSC, the second against the use of the NAC as the principal
over-all coordinating mechanism for the dollar gap program.
  o) The Memorandum in its final form was taken to the White House
by the Secretary and discussed with the President on February 6.4
  d) On February 8 Mr. Webb 5 brought the Memorandum to Sec-
retary Snyder 6 in Florida and had some preliminary discussions
about it.
   e) The Memorandum      was left with Secretary Snyder and he
discussed it with Secretary Acheson on February 14. The matter is
still pending.
   t) Officials in the Bureau of the Budget and also Admiral Souers7
of the White House Staff have been consulted about the recommenda-
tions contained in the draft Memorandum to the President. All have
expressed agreement in principle.
   g) S/S is taking the lead in preparing a series of charts on the
 specific parts of the dollar gap problem.
   h) A, E, P and S/S will produce supplementary memoranda on
such corollary subjects as the specific functioning of the proposed
interdepartmental machinery, public relations in the dollar gap cam-
paign, and Departmental backstopping machinery.
Difficulties Met or Anticipated
   1. Substantive
   There was originally some difference of opinion between E and
 S/P on the role of extraordinary foreign assistance in making up
 that part of the dollar gap which could not be filled by increased

   3The files relating to the Department's effort on this problem during
January
 and February 1950 are for the most part found in Lot 122, Box 15559, which
 contains the files of ,the Departmental Dollar Working Group (DDG) (estab-
 lished March 2, 1950).
   But not formally submitted to the President at that time. See memorandum
 to the President, February 16, infra.
   James E. Webb, Under Secretary of State.
   8John W. Snyder, Secretary of the Treasury.
   '(Rear Adm.) Sidney W. Souers, Executive Secretary, National Securilty
 Council.


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