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

39. Letter From the Assistant Secretary of Defense for International Security Affairs (Gray) to the Deputy Under Secretary of State (Murphy)¹

Washington, 1 August 1956.

Dear Bob: In your letter of 8 May 1956,² you voice the concern of the Department of State over the apparent deterioration of U.S. influence in Latin American military affairs and its consequent harmful effect on our general relations with the countries in this area. We, in the Department of Defense, share your concern, and with this in mind, I have already requested the Joint Chiefs of Staff to prepare a general reappraisal of the Latin American situation with particular attention to the establishment of a long-range military program including force goals for both MDA-supported and other units. You will, of course, be informed of the results of this study.

This JCS reassessment will provide a gauge for the measurement of our reimbursable and grant aid programs and will give us a basis for discouraging, insofar as possible, purchases by Latin American countries of military equipment from outside sources which would put undue strain on the economies of many of the countries. With regard to reimbursable aid, I agree with you that it is perhaps the most important single aspect of our military relations with Latin America. For this reason, I do not believe it realistic to confine the reimbursable aid program within the limits of a policy having as its criterion only hemisphere defense. In the past, it has been clear that Latin American countries do not feel bound to limit their military equipment purchases to what we feel is necessary for hemisphere defense, and for us to place such arbitrary limits on our willingness to sell would result in deterioration of our military relations rather than enhancing them. Once refused by us, the country seldom ceases its attempts to obtain the desired equipment but rather goes on to a foreign source, which is in direct opposition to our national policy of standardization. The proof of this is in the fact that Latin American countries since 1950 have purchased over $300,000,000 worth of military equipment from foreign sources; this amount far exceeds the military equipment we have sold to them under reimbursable aid, although the only restrictions on this program in the past have been, by and large, political and economic. To increase the restrictions on this program would serve only to increase Latin American purchases from foreign sources at a time when the Soviet Bloc has appeared on the scene.

I feel, therefore, that we should continue to treat each request in the reimbursable aid program on a case-by-case basis, measuring it against, but not confining it to, the criterion of hemisphere defense. At the same time, we should urgently seek to put ourselves in the best possible competitive position vis-à-vis European sources. This involves not only satisfactory solutions to our pricing and credit problems, but a re-evaluation of the priority of equipment and funding allocated to Latin America. In this respect, the establishment of a revolving fund to permit purchases under reimbursable assistance would be of great assistance. While there are no funds in the FY 57 program to accomplish the above, I propose to submit legislation in the FY 58 program to establish such a fund and would appreciate your support.

The provision of grant aid to Latin America has so far been limited to hemisphere defense, and in your letter of 21 May,³ you reiterate that, as a general policy, the State Department believes that grant aid should not be furnished for internal security purposes. We agree that the general initiation of grant aid to Latin American countries on a basis of internal security would introduce many problems. However, individual cases of attempted Communist subversion, as in the case of Guatemala and Bolivia, will arise and should be given individual attention. This fact was one of the impelling reasons for the institution of the NSC 1290d program.⁴ As a result of 1956 changes in the Mutual Security legislation, Latin American countries receiving assistance under that program will, we believe, be eligible for more adequate support than heretofore.

Further, with regard to grant military aid, the inclusion of Argentina and Mexico in the program and the continuation of grant aid to Nicaragua and Honduras will undoubtedly be considered in the study now being made by the Joint Chiefs of Staff, as will the determination whether or not to modernize Latin American air forces.

With regard to your comment on paragraph 13 c of NSC 5432/1, Defense would have no objection to the deletion of this provision in its entirety; however, if it is retained, I believe that the all-inclusive language of the provision as it now appears should be altered to place such contributions on an “as feasible and desirable” basis.

Sincerely yours,

Gordon Gray

1. Source: Department of State, Central Files, 720.5/8–156. Secret.
2. Document 35.
3. Not found in Department of State files.
4. NSC Action No. 1290–d was taken at the 229th meeting of the NSC, December 21, 1954. It established the “1290–d program”, which concerned the development of constabulary forces and the improvement of internal security in free-world countries regarded as vulnerable to Communist subversion. The action is printed as part of the memorandum of discussion at the 229th NSC meeting, in Foreign Relations, 1952–1954, vol. ii, Part 1, p. 832.