575. Memorandum of a Conversation, Department of State, Washington, August 28, 19561

SUBJECT

  • Sale of Arms for Credit to Venezuela

PARTICIPANTS

  • G—Mr. Robert Murphy
  • Mr. Gordon Gray, Asst. Secy of Defense (International Security Affairs)
  • E—Mr. Thorsten Kalijarvi
  • Capt. Daniel Stuart, Office of Asst. Secy of Defense Gray
  • ARA—Mr. Henry F. Holland

Mr. Holland stated that the problem was whether to sell some 200 to 400 million dollars worth of arms to Venezuela on credit. He described the history of the staff talks with Venezuela and said that he understood that it was possible that we had made a commitment to the Venezuelans in the course of those talks to give them credit of three years and to consider sympathetically longer terms than that.

Weighing in favor of granting the credit, Mr. Holland continued, were:

(1)
The necessity for fulfilling any commitments which we may have made, and
(2)
The desirability of achieving any genuinely military objectives that we might have in mind. In that connection Mr. Holland felt that no arms were needed in order to maintain internal security in Venezuela; the danger which the government faces is that of a palace revolt by the armed forces, not of any uprising from the people themselves. Any arms which the government might want for internal security are probably really wanted in order to satisfy the armed forces.

Weighing against the sale of these arms is the fact that a substantial increase in the armed strength of Venezuela will surely set off a chain reaction leading to arms increases in Colombia, Peru, Ecuador and Chile. The same chain reaction would extend through Brazil and Argentina.

Mr. Gray said that he was not sure whether the proposal of credit had been authorized by Defense and, if so, whether it had in fact been communicated to the Venezuelans. He was concerned about the source of any funds which might be lent to the Venezuelans to make arms purchases, since such funds might come out of the appropriations to the various armed services.

[Page 1138]

It was finally agreed that Mr. Gray would inform himself further of the facts and that we would meet again, probably next week.

  1. Source: Department of State, Central Files, 731.56/8–2856. Top Secret. Drafted by Holland.