Foreign Relations of the United States, 1955–1957, American Republics: Multilateral; Mexico; Caribbean, Volume VI

29. Memorandum of a Conversation, the Pentagon, Washington, December 12, 1955¹

Washington, December 12, 1955

SUBJECT

• United States Military Programs in Latin America

PARTICIPANTS

• Henry F. Holland, Assistant Secretary of State
• Gordon Gray, Assistant Secretary of Defense
• E. Perkins McGuire, Deputy Assistant Secretary of Defense
• Terry B. Sanders, Jr., ARA/AR
• Robert M. Sayre, ARA/AR

In Mr. Gray’s office this morning the following topics concerning Latin America were discussed: the need for clarity of military policy, grant military assistance, credit sales of military equipment, and the Argentine request to purchase armaments.

Clarity of Policy. Mr. Holland said that due to the lack of clarity in our Government’s policy on military relations with Latin America the Latin Americans do not know what to expect from us. The lack of clarity in policy leads to three major consequences: (a) The Latin Americans make many unreasonable proposals and requests, and when we turn them down, the result is bad feelings toward us. (b) We make conflicting decisions, (c) We are less able effectively to discourage arms races in Latin America. Mr. Gray agreed, if our policy is not clear, that it should be made clear.

Grant Military Assistance. Mr. Holland stated that he is not certain that the Department of Defense has a firm conviction on whether the grant program exists for military or for political reasons. Mr. Gray replied that in his opinion the justification for the program is political. Mr. Holland thought that Defense considers the program a political one, and he was inclined to attribute a lower political significance to the program than does the Department of Defense. He emphasized that the decision that the program is required for military reasons is one for Defense to make, although he had some doubt of its military value because he questioned whether Latin American military units would make any significant military contribution in the event of war. He urged that the programs in each of the countries be evaluated to determine whether a military requirement exists for the units established.

If Defense should conclude that all or part of the program is political, Mr. Holland pointed out, he would like to discuss further with Defense the implementation and the future of the program. If, on the other hand, Defense maintains that the program is military, then the program should be implemented effectively. At present the program does not appear to be achieving any real military purpose. For example, a squadron of planes that we gave Colombia is grounded for lack of maintenance. In all cases of ineffective implementation it should be determined whether the fault lies with the Latin Americans or with us, and corrective measures should be taken. He suspected that we would find most of the problem is failure of the Latin Americans to meet their obligations.

Mr. Holland expressed our understanding in ARA that the Bureau of the Budget had eliminated Defense’s request of $46.5 million for the grant program in Latin America during FY 1957, and Mr. Sayre said that he had been informed by an officer in Defense that the Defense Department had already asked the Bureau of the Budget to restore this item. Mr. McGuire, however, denied that the cut had been made or that Defense had had to make a request for restoration.

Credit. Mr. Holland stated his concern that credit sales of military equipment provide the Latin American countries with armaments that they actually do not need and diminish their capacity for economic development borrowing. Furthermore, our military credit operations in Latin America are confused and are haphazardly implemented. Mr. Gray agreed with the latter, saying that “we don’t know where we are going” and that a generally accepted policy is necessary.

Argentina. Mr. Gray said that recently the Chargé and the Naval Attaché of the Argentine Embassy had called on him to press for equipment for a marine regiment. The Argentines were not particularly interested in the carrier and the planes which their Government had previously asked to buy. The Chargé and the Naval Attaché urged that the requested equipment for the regiment be sold as excess so that it could be priced at 10 percent of its original cost. Mr. Gray told them that this would not legally be possible, although he subsequently learned from Defense’s legal advisers that under discretionary authority given the President in the Mutual Security Act MSP funds could be used to finance the difference between the cost ($5.7 million) and the amount ($2 million) which the Argentines are prepared to pay. Mr. Holland stated that the Argentine Government will in the near future ask the United States for economic assistance and that, in his opinion, it should be suggested to the Argentines that they evaluate their request for military purchases in the light of their needs for economic assistance and consolidate their military and economic requests into one package. Mr. Holland also said that during his recent visit to Buenos Aires he learned in conversations with Vice President Rojas and President Aramburu that while the former strongly urges the sale of United States military equipment to Argentina, the President is decidedly opposed to Argentina’s buying this equipment. Admiral Rojas, in command of the Argentine Navy, was largely responsible for the successful overthrow of Perón and is probably the strongest political figure in Argentina at the present time.

Conclusion. Mr. Holland left with Mr. Gray a memorandum² describing ARA’s views on the importance of effectively implementing the grant program and another memorandum³ on ARA’s proposals for a credit program. Mr. Holland emphasized that the credit proposals represent only ARA’s views since they have not been cleared with other interested offices in the State Department. Mr. Gray directed Mr. McGuire to go over the memoranda and to telephone Mr. Holland to give him (a) the Defense Department’s appraisal of whether the grant program is considered to be political or military and (b) the Defense Department’s views on credit operations.

After leaving the above meeting with Mr. Gray and Mr. McGuire, Mr. Holland instructed that ARA should begin at once to consider what our position on the grant program will be if Defense determines that the program in some or all of the participating Latin American countries⁴ Should be primarily justified on political grounds.

1. Source: Department of State, Central Files, 720.5–MSP/12–1255. Secret. Drafted by Sanders.
2. This memorandum is dated December 5, 1955 and was prepared as an attachment to another memorandum of the same date, from Mr. Cale to Mr. Holland, “Military Problems for Discussion with Gordon Gray”. [Footnote in the source text.]
3. This memorandum is dated November 3, 1955, “Provision of Credit to Latin American Countries for the Purchase of Military Equipment and Services under the Mutual Security Act of 1954 as Amended”. [Footnote in the source text.]
4. These countries are Brazil, Uruguay, Chile, Peru, Ecuador, Colombia, Nicaragua, Honduras, Guatemala, Cuba, Haiti, Dominican Republic. [Footnote in the source text.]