New Development Bank

In a dramatic reversal of long-frozen policy, the U.S. last week agreed to help set up an international bank for Latin American economic development. At a special session of the Organization of American States, World Financier C. Douglas Dillon, now Under Secretary of State for Economic Affairs, announced: "The U.S. is prepared to consider the establishment of an inter-American regional-development institution." Latin America's joyous response was summed up by El Salvador Delegate Julio Heurtematte: "It is the realization of an old dream."

The dream of an inter-American development bank goes back to the First International Conference of American States in Washington in 1889-90. The idea came up again in Mexico City (1901-02), Washington (1931), Montevideo (1933), Buenos Aires (1936), Lima (1938), Guatemala City (1939) and Bogota (1948). By 1948 the World Bank, the International Monetary Fund and the Export-Import Bank had been launched; the U.S. took the view that any added agency would be a duplication, held steadfast to this position at inter-American conferences in Washington (1950), Caracas (1954), Petropolis (1954) and Buenos Aires (1957).

What caused the U.S. about-face? One reason became plain next day, when President Eisenhower suggested a similar plan for the troubled Middle East before the U.N. General Assembly. But more important was Latin America's joint impact on Visitors Richard Nixon, Milton Eisenhower and John Foster Dulles. When Dulles returned from talks with Brazilian President Juscelino Kubitschek a fortnight ago, he put his department heads to work on the development bank idea.

The form the bank will take will be hammered out around conference tables, probably at the get-together this fall of the "Committee of 21'' suggested by Kubitschek last week in a round-robin note to all the Hemisphere nations. Said Roy Rubottom. Assistant Secretary of State for Inter-American Affairs: "The need is urgent, the desire is widespread, and we'll go ahead on a rapid schedule."

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