The Ambassador in Paraguay ( Beaulac ) to the Secretary of State
[Received August 29.]
Sir: With Reference to the Department’s telegram 154  of May 8, 1945,12 I have the honor to enclose herewith a single copy of the report12 of the Paraguay–United States staff conversations recently concluded in Asunción.
I am enclosing also copies of two memoranda,12 one dated July 26, 1945 from the Military Attaché to the Embassy, and the other dated [Page 1284] August 3, 1945 from First Secretary Leslie E. Reed. These memoranda comment on the results of the staff conversations and will furnish the Department the background it requested in its telegram referred to above.
I should like to add my own impression that the “Military Commission” referred to in the last paragraph of page 2 of Part 1, “Information Regarding Staff Conversations between United States and Paraguayan military and Naval representatives”, was originally suggested by General Wooten. It is my understanding that prior to the termination of the staff conferences the War Department had disapproved the establishment of a Military Commission for Paraguay.
The principal criticism against the Paraguayan proposals is that they contemplate an eventual peacetime Army of 25,000 men excluding an Air Corp of 375 officers and 4,236 men. General Wooten, in his transmitting letter of August 10, 1945 says, in this regard, “It is, however, the opinion of the undersigned that the peacetime army which Paraguay desires is greater than it can economically support, even though greatly modified by reduction in table of organization strength, or by inactivation of certain units as contained therein.”
My own opinion is that the present strength of the Paraguayan Armed Forces, comprising a ground army of 10,000, including 1400 Navy “Marines”; plus an air force of about 650 and Navy fleet personnel of 800, is greater than is needed for peacetime, and constitutes an undue burden on Paraguay’s economy, especially after Chapultepec13 and San Francisco,14 and that Paraguay and other countries in a similar position should be encouraged, through joint international action, to reduce the size of their armed forces.
While the desire to increase ground forces from 10,000 to 25,000 (an absurd figure, corresponding, on a population basis, to 3,250,000 in the United States) is an ultimate objective, the desire to increase the air force from some 650 to 4,611, is an immediate objective, entirely out of line with Paraguay’s needs or financial capacity.
It will be noted that the Paraguayan Air Force desires to use its expanded personnel partly in the operation of a commercial airline in Paraguay. This airline, the Latn,15 is already being operated with military air personnel in an elementary way.
General Wooten says, with reference to this feature of the proposals, “With respect to the air transport squadron desired, the Paraguayan Government plans to operate a national military airline using military personnel for the operation of these planes which would, in addition [Page 1285] to providing military air transportation for military personnel and mail, also engage in commercial passenger and freight transport. The Paraguayan officials believe that in this way they can operate at sufficient profit to pay the cost of fuel and maintenance and also provide training for their military personnel which they would be unable to do unless the air transport line could be used for commercial operation. Considering the internal Paraguayan situation, with the great requirements for limited air transport service into isolated areas which probably would never be developed by commercial aviation companies, it is believed that this policy should receive sympathetic consideration.”
From the Paraguayan viewpoint, there is some merit in the Paraguayan proposal to combine its military air force with the operation of a commercial airline. Our own Government’s attitude toward such a proposal will undoubtedly be influenced by considerations of broad policy toward commercial aviation in the other American Republics.