403 



jections from these sources were based on the idea that standards in 

 the extension of credit in remote regional banks would be low so that 

 resources would accordingly be wasted. Writing in 1969, Eugene Black 

 observed that he had been persuaded to change his opinion of the 

 merits of the regional bank concept after he had been enlisted by Pres- 

 ident Johnson in the campaign to help the Mekong Project." 

 And Lyndon Johnson has recorded : 



One of the first things I asked Black to do was to push hard to bring the pro- 

 posed Asian Development Bank to life. Almost all the nations of Asia and other 

 concerned and more prosperous nations joined in this effort, thirty-two coun- 

 tries in all. The charter of the new bank was signed at Manila on Decem- 

 ber 4, 1965. 



The first year and a half was taken up with planning, recruiting able personnel 

 from many countries, and building a headquarters in Manila. By the end of 1967 

 the Asian Development Bank was in business. The Bank has two main functions : 

 to make loans for worthy projects and to provide technical assistance. In 1968, 

 its first year of operation, the Bank made seven major loans totaling $41.6 mil- 

 lion. Twenty additional loans amounting to $98.1 million were approved in 

 1969. 53 



Upon his return from his first visit to Southeast Asia for the Presi- 

 dent, Black reported that progress had been encouraging, and that the 

 Bank could be in business by early 1966. 



Mr. Black [said a White House press release, July 10] told the President that 

 the consultative committee meetings went very well .... [He had told the 

 other delegates] that — subject to congressional approval — the United States 

 [was] prepared to provide 20 percent of the Bank's capital, up to $200 million, 

 and also to contribute — if other countries [would] join — up to $100 million to 

 the multilateral Southeast Asia Development Fund. The Fund would be admin- 

 istered by the Asian Bank and would finance regional projects in Southeast Asia. 



The President [the press release continued] was happy to learn from Mr. 

 Black that the Japanese Government also intends to take a 20-percent share in 

 the Bank's capital." 



Authority for U.S. participation in subscribing $200 million to the 

 capital of the Asian Development Bank Act was provided in Public 

 Law 89-369, 89th Congress, approved March 16, 1966. The Bank's 

 Articles of Agreement came into force on August 22, 1966. A recent 

 evaluation of this action, by the National Advisory Council on Inter- 

 national Monetary and Financial Policies, observed that "The forma- 

 tion of the Asian Development Bank is the most important single de- 

 velopment of the past several years in terms of Asian regional cooper- 

 ation [and that] the . . . decision of the United States to become a 

 member of a properly conceived Asian Development Bank was decisive 

 in assuring that the Bank would receive major support from outside 

 the region." 55 



62 Eugene R. Black: Alternative in Southeast Asia (New York: Frederick A. Praejrer. 

 1969), pp. 96-97. He notes : 



As early as 1954, the member countries of ECAFE and the ECAFE secretariat began 

 talking about the formation of an Asian development bank. I was then President of the 

 World Bank, and, frankly, I was opposed to the establishment of regional banks, whether 

 in Asia or Africa or Latin America. I feared that they would become political institutions 

 which, while ostensibly charged with tasks very like those of the World Bank, would tend 

 to undermine the kind of lending standards we were trying to get accepted and the con- 

 fidence we were trying to build up in the bond markets of the world.* * * 



A similar view prevailed in the U.S. Treasury as late as March 1965 * * *. 



63 Johnson, The Vantage Point, p. 356. 



54 "Mr. Black Reports on Southeast Asia Economic Development," Department of State 

 Bulletin (August 2, 1965), p. 215. 



55 Secretary of the Treasury, Communication transmitting to the Committee on Banking 

 and Currency a "Special Report on the Proposed U.S. Contribution to the Consolidated 

 Special Funds of the Asian Development Bank," 91st Cong., 2nd sess., 1970, p. 13. 



