LATIN AMERICA

Feb. 8, 1962

Q. What is your appraisal of the Punta del Este conference?

A. The meeting of the U.S. and Latin American foreign ministers last month at Punta del Este was only a partial success for the U.S. in its attempt to achieve Hemispheric unity on the issues of Communism and Cuba.

(The JFK Administration which has been seeking to strengthen the hemisphere against Communism through the Alliance for Progress, felt that a new attempt for action through the OAS might be worthwhile. The original U.S. demand was for a severance of all diplomatic and trade relations with Cuba. However, it could not get support for this from the majority of Latin nations. The U.S. was forced to accept a compromise resolution calling for Cuba's exclusion from participation in the Inter-American System. Even this resolution received a bare majority approval. Six of the largest Latin countries abstained. Although the U.S. fared better in the voting on the issue of "incompatability" of Communism in the hemisphere and on other resolutions, it was forced to minimize its demands and still suffered the embarrassment of a breach among the ministers present).

The U.S. should now place more emphasis on the Alliance for Progress not only to meet the challenge of Communism but because the economic and social reforms which the Alliance seeks to achieve are objectives desirable in themselves, regardless of the existence of a Communist threat.

I might add that Secretary of State Rusk has demonstrated admirable diplomatic skill in handling the long and difficult negotiations of the conference.

April 12, 1962

LATIN AMERICA

A. NAR Position:

1. In order to strengthen its ties with Latin America and to promote hemispheric unity, the U.S. should emphasize positive programs of reform and national development. These programs ought to be established not only to meet the challenge of Communism but also because they are desirable in themselves, regardless of the existence of a Communist threat.

2. The U.S. should work for the establishment of a Pan American Economic Union and a confederation of Latin American states. (The importance of economic integration in Latin America is increased because of the unfavorable position in which the Latin states will find themselves as the European Economic Community raises tariff barriers to Latin American products which will not apply to African products.)

3. We should encourage OAS and ECLA activities in promoting regional economic integration which will have as its ultimate goal the reduction of restraints on external trade.

4. It would be advisable for the US to take the lead in reducing Western Hemisphere trade barriers. We should remove our quotas on petroleum, lead and zinc, and then invite discussions on mutual tariff and quota reductions. If it is necessary to maintain some protection for domestic products, direct subsidies should be continued, but they should be on a schedule aiming at complete elimination of such restrictions.

5. We must continue to encourage foreign investments in Latin America by taking a stronger initiative in negotiating tax sparing treaties, which would permit local tax concessions to be passed on the foreign investor.

6. Efforts should be made to achieve better coordination between U.S. agencies and international groups involved in foreign aid programs.

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7. Within the Alliance for Progress, the U.S. should concentrate a major part of its efforts on a program of technical and financial assistance to fight illiteracy and raise the level of technical and hygienic knowledge in Latin America.

8. We ought to expand educational and cultural exchange programs and set up more cultural centers in major Latin American cities.

## B. Kennedy Program:

1. It is difficult to evaluate Kennedy's Alliance for Progress at this time. The program has just begun to get under way. It was well received both in the U.S. and in Latin America.

2. There is some question now as to whether the plans for reform and national development have been carefully worked out in Washington and the Latin capitals.

3. Protection of domestic lead and zinc.

a. The Kennedy decision to rule out any reductions in tariff rates on lead and zinc imports may be criticized in the light of the NAR position above (para A, 4), which advocates that the U.S. take the lead in reducing Western Hemisphere trade barriers, particularly those on lead and zinc.

b. NAR might criticize the action of the House Ways and Means Committee, which has a preponderance of Democratic members for having approved unanimously a bill to revise upward the excise taxes on lead and zinc imports.

However, criticism of the Kennedy administration on this issue is of doubtful value:

- The Administration strongly opposed the bill;

- The Republicans on the House Committee were as solidly in favor of it as the Democrats.

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C. Current Status: Protection of domestic lead and zinc.

A bill to revise upward the excise taxes on lead and zinc imports is now in Congress. The House Ways and Means Committee has approved it unanimously, despite strong opposition from the Administration.

On February 11, 1962, the President accepted the Tariff Commission's judgment and ruled out any reductions in tariff rates on imports of lead and zinc.

Current Positions Notebook

October 1, 1962

# LATIN AMERICA

## A. NAR General Position

1. In the Western Hemisphere, perhaps more than anywhere else, the feature which distinguishes the economic system of the West from that of Communism is that economic development is not an end in itself but is sought as a means to enhance the well-being and dignity of the individual. A dynamic approach to economic development and rising standards of living through the cooperation of all the nations of the Western Hemisphere can create:

- a model for other nations of what freedom can achieve by its own mode of action;

- a standing reproach to those who seek economic development through enslavement of the individual.

2. Basically the problem facing any development program in Latin America is that aid and investment cannot be poured into nations which, unlike those of Marshall Plan Europe, have little surplus skilled labor and industrial experience available. To build such a base requires the stimulation of whole sections of the population. It requires better educational opportunities, more farming incentives, better transport, more consumer demand, better housing, more equitable distribution of profits as well as more capital investment.

3. One of the key problems of the Latin American countries is that they lack governmental authority to carry out the necessary economic and social development measures. Most of the forces devoted to economic and social reform are seeking it through revolutionary rather than evolutionary means.

4. The Latin American societies must have time in which to assimilate the changes which economic and social development involve. If we push for development too rapidly, a coalition of extreme right-wing and left-wing forces may totally destroy democratic government.

## B. NAR Specific Position

1. The problem of Latin America can best be solved by a major Western Hemisphere cooperative effort to achieve agrarian reform and industrialization together with a broad program of economic and social development.

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2. The U.S. should work toward the eventual establishment of a Pan American Economic Union which would bargain as a unit with other parts of the world and which would establish within the hemisphere a free flow of goods, capital and manpower.

3. To achieve this union the U.S. might begin by taking the lead in reducing Western Hemisphere trade barriers.

- We should remove our quotas on petroleum, lead and zinc, and then invite discussions on mutual tariff and quota reductions.

- If it is necessary to maintain some protection for domestic products, direct subsidies should be continued, but they should be on a schedule aiming at complete elimination of such restrictions.

4. We should also concentrate on plans for regional commodity agreements, which were promised in the Alliance charter.

- Many of the Latin American countries are heavily dependent upon one or two commodity exports. A decline in these exports or a fluctuation in their world prices can erase whatever progress has been made by foreign aid.

- The importance of commodity agreements and economic integration has been greatly increased by the advent of the European Common Market. The Common Market plans to grant special concessions to African states (former overseas territories) which will place the Latin American countries in an unfavorable trade position, since both Latin and African states produce many of the same products. The Common Market will raise tariff barriers to the Latin products which will not apply to the African states. The U.S. has a major responsibility to try to persuade the Common Market to eliminate discriminatory arrangements for trade in primary products.

- In seeking commodity stabilization, however, we should not lose sight of the valuable contribution that free market forces can provide in regulating production. Commodity agreements should be directed at limiting short-term price fluctuations while allowing long-term supply-demand forces to operate. This could be done through a buffer stock mechanism or by international agreements to limit price fluctuations in any year within a range around the previous year's average.

Summary Position

Governor Nelson A. Rockefeller

December 1963

LATIN AMERICA

The Alliance for Progress, while noble in purpose, has not achieved the all-important sense of unity and common effort among the peoples of the Hemisphere which is a prerequisite of its success. In fact, the program has antagonized the very Latin American groups whose help it needs most. Many changes are needed.

1. The Alliance is beset by confusion and diffusion of responsibility among many U.S. government agencies, with no clear lines of responsibility. Changes are needed:

a. A new post of Undersecretary of State for Inter-American Affairs should be created to mark the special importance of this hemisphere relationship and to bring into focus at top policy level our relations with the nations of the hemisphere.

b. An independent agency with direct responsibility and access to the President should be created with authority to coordinate the work of all the dozen or more U.S. agencies and U.S. representatives in international agencies dealing with Latin American affairs.

c. The United States should restore the multilateral approach to its relationships with its sister republics in this hemisphere. (Consultation and joint action are the fundamentals in this policy.)

d. In order to implement more effectively the development of the multilateral approach, the OAS should reactivate the Inter-American Development Commission of American States with its 21 national commissions, which was abandoned after World War II, as the prime instrument for multilateral economic planning and action throughout the hemisphere.

2. Measures to increase the flow of our private investment in Latin America, jointly with Latin American capital, should be adopted. More emphasis should be placed on building institutions for the mobilization of local capital for constructive development investment. Specific measures which should be encouraged include:

a. The establishment of credit institutions to finance agricultural modernization, housing development and business expansion;

b. The creation of stock markets to facilitate equity investments;

c. The launching of mutual funds to encourage the flow of savings into ownership of local enterprises.

Latin America

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3. Latin America's trade position severely undermines the potential success of any major development program:

a. The primary commodity exports of the Latin countries are subject to extreme price fluctuation. Commodity price stabilization agreements are badly needed, but can come only through joint international action which the Alliance so far has been unable to produce.

b. Along with the stabilization of commodity prices, an effort must be made to relax our tariffs and quotas which presently put Latin American exports at a disadvantage.

c. The trend of the past few years toward regional economic communities promises to revolutionize the basic terms of world trade relationships. Eventually it is likely that more than half of world trade will flow along preferential lines. Many of these changes in trade patterns will operate to the detriment of Latin America. For example, the African countries, former colonies of EEC members, which produce goods competitive with the Latin Americans, will have free access to the European market. Such free access will be denied the Latin Americans. The U.S. must use its bargaining power in the next round of trade negotiations to secure adoption of measures which will offset this trend toward eventual Latin American isolation.

4. The Alliance for Progress can only succeed if it is a truly cooperative effort. The confidence and trust of the Latin American governments is a prerequisite to the success of the Alliance, and it can only be achieved through a truly multilateral approach with the patient and understanding diplomacy which that requires.

January 15, 1964

MEMORANDUM

TO: THE GOVERNOR

FROM: Henry A. Kissinger

SUBJECT: Panama

You will probably be asked your position on the Panama
crisis. I recommend the following position.

RECOMMENDED POSITION:

1. The Panama crisis is a typical example of the lack of foresight in our relations with the countries of this Hemisphere. There is no reason why there cannot be a mechanism by which the grievances of a neighbor can be discussed before they lead to violence. That really is the purpose of the "good-neighbor" and multilateral approach. We should have had a mechanism for anticipating the causes of conflict; and to deal with them before the conflict arises. Above all, if there were a real structure based on confidence, this kind of issue would never arise.

2. Under no circumstance should the United States take any action which will endanger its responsibility for the security and operation of the Canal and the Canal Zone.

3. I favor a calm and patient review of the terms under which the United States operates in the Canal Zone, together with our Latin American allies. I do not believe that the United States has shown sufficient dedication to what must be a basic premise of contemporary American policy: That we will not negotiate under the threat of mob violence.

If it seems that we are yielding to the threat of mob violence, we will merely provide incentives for further mob violence. And this lesson may be learned by others throughout Latin America -- that the United States is willing to change its policies rather than see any unpleasantness.

I believe that American policy should be clear that we are willing to review the issues in dispute, but only in a period of calm -- that we will not start such a review until the threat of mob violence no longer exists.

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One of our problems in Latin America, as elsewhere, is to act
so that constructive measures will seem to flow from our convic-
tions rather than from fear or weakness. If we only respond to
crises, there is an incentive for more violence. If we act with
foresight and respond strongly to pressures, we can create a
framework for a truly effective multilateral approach.

* * * * *

I recommend that you avoid getting involved in a discussion
of the specific issues. You might suggest that they all can be ad-
justed with good will as soon as the threat of violence has disappear-
ed. If, however, you do get involved in the specific issues, I
recommend the following positions:

1. The United States should express its willingness to negotiate with the Government of Panama a treaty of accord to the basic Treaty of 1903 (as we have done twice before - in 1936 and 1955). Such an accord to the 1903 treaty should contain the following:

a. The provisions of the executive agreement between the two governments, dated January 10, 1963, which stated that where the United States flag was flown in the Zone by civilian authorities, the Panamanian flag would also be flown.

b. Provisions that the annuity paid by the United States to Panama for the Canal Zone be increased to a figure far more in keeping with the worth of the Canal to the United States. (In view of the fact that Canal rates for shipping have not been raised since the canal was opened, an increase in rates might be justified to raise the increased annuity.)

c. Provision that in the future Panamanian police will patrol the Zone jointly with American military police. Such an arrangement will increase the ability of the two sides to keep order.

d. Provision that Panamanian nationals be guaranteed equal opportunity for non-military and non-security Canal Zone jobs at equal pay for the work performed. (If it is necessary to establish wage rates in the Canal Zone that are higher than other Panamanian rates in order to induce Americans to accept jobs in the Canal Zone, these rates should be made available to Panamanian nationals as well. If this were done, Panamanians who held such jobs would probably become an important and effective pro-Canal Zone and pro-American force in the community.)

e. Provision that goods for Canal Zone commissaries will be purchased only from United States or Panamanian business concerns and, as between the two, only on cost and quality criteria.

f. A pledge by the government of Panama to negotiate with the United States a treaty for a new Canal Zone and a new Canal, with all of the provisions of the 1903 treaty as amended by subsequent accords. (The present Canal is not capable of accommodating many of the larger US naval vessels, thus reducing significantly its military value. A new Canal has been under discussion for many years and has now become a necessity.)

2. If the United States were to sit down with the Panamanian government to negotiate such a treaty today, other nations would believe that the way to get the United States to change its treaties and policies is to be provocative, bellicose and aggressive. This would be so, despite the fact that many of the Panamanian complaints seem legitimate. Therefore, while the United States should immediately express a willingness to negotiate an accord to the 1903 treaty along the lines that I have suggested, the Administration should also insist that it will begin negotiating such an accord only when the Peace Committee of the O.A.S. reports that Panama has not violated the existing treaty arrangements for a period of six months. We are not opposed to change when it is reasonable and when it is peaceful.

3. I recommend that when the treaty accord, which I have outlined, has been ratified by the United States and Panama, that the two governments jointly submit it to the Organization of American States for their cognizance. Such a gesture, which would include Panama, would demonstrate to the other Latin governments that it is satisfied with the terms of the treaty. Such a gesture from the United States would demonstrate its intentions to abide by the terms of the treaty.

## BACKGROUND:

### 1. The relevant treaties and international agreements:

a. The Treaty of 1903 empowered the United States to act as "if it were sovereign" within the Canal Zone "in perpetuity" and "to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority". The United States agreed to pay immediate compensation of $10 million plus annual payments of $250,000 beginning nine years after ratification.

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b. The Treaty of 1936 (technically an accord to the 1903 treaty) increased the annuity from $250,000 to $430,000.

c. The Treaty of 1955 (technically an accord to the 1903 treaty) increased the annuity from $430,000 to $1.93 million, and provided for the transfer of $24 million worth of land and buildings from the Canal Zone Administration to the Government of Panama.

d. An executive agreement of January 10, 1963, provided that the Panamanian and U.S. flags would be flown together in the Canal Zone wherever the flag of the United States was flown by civilian authorities; and that private organizations and persons in the Zone were free to display flags at their will over their places of residence or business.

2. The present crisis:

a. On December 31, 1963, in order to avoid immediate dissention, Zone officials, in the absence of any United States ambassador, directed that, effective January 1964, no flags would be flown in front of schools. On January 7th, a group of American students raised a U.S. flag at their high school in defiance of the order. On January 9th, a group of incensed Panamanians marched to the school and planted the Panamanian flag, whereupon violence broke out.

b. Panama actions:

President Chiari severed relations with the U.S. and demanded "complete revision" of the treaty provision, possibly including nationalization or internationalization of the Canal.

Panama also brought charges of aggression before the U.N. Security Council and the Council of the O.A.S., both of which were called into emergency session. But Panama deferred a request for specific U.N. action, and left it to a special O.A.S. Peace Committee to attempt conciliation. The Security Council restricted its efforts to a call for an immediate cease fire.

**NOTE:** It was the first time in the history of the O.A.S. that the U.S. had been accused as an aggressor under the Rio Treaty.

Panama officials requested that the U.S. embassy staff leave the country, but when the United States insisted on a restoration of relations before any settlement could be achieved, Panamanian officials became less adamant. When the U.S. expressed a willingness to review the 1903 treaty, Panama apparently consented to restore diplomatic relations.

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c. <u>U.S. actions:</u>

On January 10th, President Johnson telephoned to President Chiari to discuss the crisis. The Panamanian president agreed to call for calm on both sides and President Johnson said that he would immediately dispatch a group of U.S. officials, led by Thomas C. Mann, the newly appointed presidential advisor and Assistant Secretary of State for Inter-American Affairs to survey the situation.

Edwin Martin negotiated for the restoration of relations with the O.A.S. Peace Committee.

Apparently the United States position is that with diplomatic relations restored, the United States would be willing to "review" all of the Canal and Zone arrangements with Panama.

d. <u>O.A.S. actions:</u>

The O.A.S. Peace Committee has considerable autonomous power to mediate disputes without requiring specific authority from the O.A.S. Council. So far it has reached a tentative agreement on a plan to let the Panamanian National Guard patrol within the borders of the Canal Zone.

The Committee has negotiated a temporary settlement, the general terms of which are that Panama will restore diplomatic relations with the U.S. in exchange for a U.S. pledge to "review" all of the Canal and Zone arrangements with Panama.

3. <u>Issues in the crisis:</u>

a. <u>The flag:</u>

The Panamanians wish to have their flag flown in the Canal Zone as a sign of "titular" sovereignty. The United States is required to do so under the executive agreement of January 1963. During the current crisis, the United States government has promised to implement that agreement.

b. <u>The annuity for the Canal:</u>

Panama has requested that the treaties with the United States be renegotiated to give Panama an increased share of the Canal revenues. The total annual revenue of the Canal is approximately $100 million, with an annual net profit of $4 million. At the present time, under the 1955 treaty, the Government of Panama receives $1.93 million out of this total per year, and the rest of the Canal profits go for Canal improvements and maintenance. At the present time, the Canal

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is used to capacity, so the Canal revenues cannot be increas-
ed unless its charges are increased. The latter does not
seem unreasonable in view of the fact that the Canal charges
are the same today as they were when the Canal was opened
fifty years ago.

c. <u>Joint Panamanian-U.S. police patrols in the Canal Zone:</u>

The O.A.S. Peace Committee has arranged with U.S. consent for the temporary patrol of specific Canal Zone areas by the Panamanian National Guard. (This arrangement indicates a potential means by which peace can be made more secure in the area.)

d. <u>Equal job opportunities and equal pay for Panamanians:</u>

Panama insists that her nationals be given equal opportunities
for Canal Zone jobs and equal pay for work performed.

At present, the Zone government employs about 4,000 U.S.
citizens and 10,000 non-U.S. personnel, mostly Panamanian
citizens. The U.S. military services in the Zone employ about
2,000 U.S. civilians and 5,000 non-U.S. personnel, again most-
ly Panamanians. Both Panamanians and Americans are hired by
the Canal Zone Personnel Board, which operates very much like
the U.S. Civil Service.

Under a 1955 agreement with Panama, a single basic wage was set for every job category, regardless of nationality. But the U.S. worker was to receive by agreement with Panama a 25 per cent increment to the basic wage in every category. The reason for the differential was that U.S. employees had to have an inducement to move from the U.S. Furthermore, the Panamanian employees' job rate was reduced slightly -- about five per cent below the basic wage on the average, to account for the fact that he paid lower taxes to his government than did the U.S. employee. In setting the basic rates, wages for the less skilled jobs were oriented toward the prevailing pay in Panama, while at the upper end of the job scale, the rates were based on those in the United States. For the most part, the Panamanians are employed in the less skilled jobs.

e. <u>Provisions of Canal Zone commissaries:</u>

Panama insists that the Canal Zone give priority to Panaman-
ian businessmen in obtaining food and other supplies for the
Zone commissaries. There has been progress towards solving
this problem by an agreement that goods will be bought only
in the United States and Panama, and not from a "third"
country.

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f. Taxes:

Panama wants the Canal Zone Company to withhold, on her be-
half, the taxes on Panamanian employees. This issue has been
actively under discussion.

(There is no apparent reason why the Canal Zone Company should
not provide this service.)

g. <u>Nationalization or internationalization of the Canal:</u>

President Chiari has in the past opposed proposals for the
nationalization or internationalization of the Canal, although
there is a strong Panamanian nationalist segment which favors
them.

The United States cannot allow the nationalization or the
internationalization of the Canal, if for no other reason
that the precedent which would be set would thus jeopardize
the American position at Guantanamo and elsewhere. If the
Latin American people believe that the United States acts
only out of conviction, then Hemisphere relations have a
bright future. If, however, the Latin American people believe
than the United States acts out of fear or weakness, we are
inviting future disaster.

Although the value of the Canal for commercial purposes is
still very great, its military value has decreased with the
development of air power, missiles and naval ships which are
too large to get through the Canal. There is no question,
however, that a new Canal which can accommodate the latter
must be constructed.

h. <u>Narrowing the Zone:</u>

The Canal Zone is now ten miles wide. During the current
crisis, Panama has asked that the Zone be narrowed, and the
United States has implied that this is a possibility. Panama
bases its position on a desire to develop the area.

April 2, 1964

BRAZIL

QUESTION:

Do you have any comments on the crisis in Brazil?

RECOMMENDED POSITION:

1. The Goulart government is another example of the world-wide trend toward leftist-leaning governments.

2. Other examples might include the "opening to left" in Italy, the coup in Zanzibar and the increased friendship between our SEATO ally, Pakistan, and Communist China.

3. The Democratic Administration has encouraged the trend by identifying these forces as the wave of the future.

4. Since Goulart came to power, U.S. policy has discouraged the moderate political elements in Brazil and emboldened the leftist supporters of the regime. On several occasions the US has extended economic credit to Goulart thereby giving the impression of supporting his increasingly leftist regime.

5. The United States should exercise its influence, in whatever ways are necessary, to convince the moderate and democratic forces in Brazil that they have United States support and to ensure that Goulart is not successful in installing a dictatorial regime in Brazil.

FACTS:

1. On March 31, 1964, an army revolt against President Goulart broke out in Jiuz de Fora, 20 miles north of Rio in the state of Minas Gerais, and established a revolutionary capital there. The rebels acted to halt what they described as Brazil's march to Communism. The rebellion spread from Minas Gerais to the states of Sao Paulo and Parana. Goulart ordered loyal troops into Minas Gerais to crush the revolt.

The rebellious troops declared their complete loyalty to Magalhaes Pinto, Governor of Minas Gerais. They also claimed messages of "solidarity" from the states of Parana, Rio Grande do Sul and the huge heavily industrialized Sao Paulo. If all of these states plus heavily populated Guanabara where Rio is located join in the

[c]

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revolt, there is imminent danger of the collapse of the
Goulart regime or devastating civil war. Minas Gerais alone
contains 10 million people, almost 1/8 of Brazil's total
population.

The rebels apparently would like to see Goulart out of power,
the Communists brought under control and Brazil's economy
stabilized. The opposition group potentially may include the
great majority of military officers, most industrialists, the
most important state governors and probably a majority of
Congress.

One of the leading figures in this group is Carlos Lacerda,
governor of Guanabara state where Rio is located (Although he
has not yet publicly backed the rebellion). Lacerda is a well
known foe of authoritarianism and corruption. He is credited
with running an efficient, progressive state administration and
is rated a fast rising candidate for the presidency in 1965.
He has many military admirers and mobilized under his own
command are 9,000 state military police.

The Governor of the state of Sao Paulo, Adhemar de Barros, is
another leading member of the opposition who commands 45,000
state troops and seems to be in a firm alliance with Lacerda.

2. The political situation in Brazil is close to chaos. President Goulart has been gradually leading his country farther and farther under the influence of the left. Goulart, became president when Janio Quadros abdicated in August 1961. He is a faithful protege of Brazil's later dictator Vargas, an admirer of Peron, and a man who built his Labor party on a government-directed union machine copied from Mussolini's corporate state. Short on popular appeal, he commands a corps of ruthless supporters. The Army and the Congress have opposed him from the beginning.

3. The Communists are in alliance with Goulart's supporters. Communist leadership lies with a dozen, little known, competent strategists who control not only the 45,000 member Communist party but leftist fronts operating throughout the country under nationalistic guises.

Under Goulart, the Communists have not merely infiltrated many
key posts; the President has reached out for them. He has in-
stalled Communists in posts similar to US Secretary of Defense,
chief of the civil household, press secretary, to name but a few.

chief of the civil household, press secretary, to name but a few, staffed Communists in boats similar to US Secretary of Defense, key boats; the President has reached out for them. He has in-

Under Couart, the Communists have not merely infiltrated many

nationalistic groups.

3. The Communists are in alliance with Couart's supporters. The Communist leadership rules with a dozen little known, competent strategists who control not only the 42,000 member Communist

party but fellow front operating throughout the country under

Government-directed union machine copied from Meadeville's

admirer of Peron, and a man who built his labor party on a

He is a faithful bridge of Brazil's later dictator Vargas, an

became president when Juan Gracias applied in August 1961,

further and farther under the influence of the left. Couart,

President Couart has been gradually leading his country

3. The political situation in Brazil is close to chaos.

another leading member of the opposition who commands 43,000

The Governor of the state of Sao Paulo, Ademar de Barros, is

command are 9,000 state military police.
He has many military admirers and modified under his own

is rated a statesman, stating candidate for the presidency in 1962,

known toe of authoritarianism and corruption. He is credited

Governor of Guanabara state where Rio is located (Although he

One of the leading figures in this group is Carlos Lacerda.

Congress.

most important state Governors and probably a majority of

Great majority of military officers, most industrialists, the

The Lacerda apparently would like to see Couart out of power.

The Lacerda abhorrently would like to see Couart out of power.

bohemia.

contains 10 million people, almost 1/3 of Brazil's total

Couart regime or devastating civil war. Minha Cerafa alone

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Throughout the administrative machinery, Communists are in
critical offices.

4. In almost every respect Brazilian affairs have been deteriorating for a few years and Goulart has deliberately failed to solve economic problems in order to present a justification for him to seize power. The rate of economic growth has fallen sharply. Inflation is running at 7 or 8% a month. Commercial debts to European firms cannot be met and the efforts to reschedule them are likely to be set back by the present crisis. Goulart has played the economic crisis in a way to discredit the conservatives and to give him an eventual justification for a take-over. He has appointed conservative finance ministers in order to be able to fire them and discredit the conservative cause. An austerity program is unpopular. Whenever his Finance Minister institutes such a thing, Goulart fires him. He has also used the appointment of these conservatives to this key ministry as an answer to charges of his government's moving to the left.

5. Goulart has systematically attempted to avoid military action against him by either removing or transferring many officers who are politically opposed to him from command positions to desk jobs. He has also encouraged the non-commissioned officers to undertake political activity.

6. The outstanding features of Goulart's foreign policy are
as follows:

a. Brazil is one of 5 OAS members which have not broken diplomatic relations with Castro;

b. Brazil has signed (in December) agreements with the Soviet Union for technical cooperation and trade;

c. It was reported that Goulart was considering recognizing Communist China;

d. Goulart in November 1963 questioned the value of the Alliance for Progress (despite the fact that Brazil is the largest recipient of Alliance aid) and, in effect, deprecated US aid efforts in Latin America.

d. Goulart in November 1983 questioned the value of the
Alliance for Progress (despite the fact that Brazil
is the largest recipient of Alliance aid) and, in
recognition of Communist China;

c. It was reported that Goulart was considering
Soviet Union for technical cooperation and trade;

b. Brazil has signed (in December) agreements with the
diplomatic relations with Castro;

a. Brazil is one of 2 OAS members which have not broken

as follows:

b. Officers who are politically opposed to him from command
section against him by either removing or transferring many
officers who are politically opposed to him from command
positions to desk jobs. He has also encouraged the now

answer to charges of the Government's moving to the left.
appointment of these conservatives to this key ministry as an
such a thing. Goulart fires him. He has also used the
program to unpopular. Whenever his finance minister institutes
them and discredit the conservative cause. An anatheid
conservative finance minister in order to be able to fire
eventual justification for a take-over. He has appointed
in a way to discredit the conservative and to give him an
by the present criteria. Goulart has played the economic criteria
and the efforts to reach Schedule them are likely to be set back
a month. Commercial debts to European finance cannot be met
Growth has fallen sharply. Inflation is running at 7 or 8%
justification for him to raise power. The rate of economic
failed to solve economic problems in order to present a
deteriorating for a few years and Goulart has deliberately
4. In almost every respect Brazilian attitudes have been
critical of offices.

7. The immediate cause of the rebellion appears to have been last week's demonstration by military officers. Approximately 2,000 Naval officers met to issue a warning and take an oath to resist any advance of Communism in Brazil. They accused the government of protecting a "clearly Communist" sit-in strike by enlisted men of a leftist military organization. The Naval officers were then supported by Army officers.

In addition to this, the critical situation in Brazil was further exacerbated by Goulart's recent expropriation decrees which effected several privately owned oil refineries and vast tracts of farm lands designated as untilled and the fear that he might cancel the 1965 Presidential elections and disband Parliament in the name of stability.

LATIN AMERICA

Q. What do you think of the appointment of Mr. Mann as Assistant Secretary of State for Inter-American Affairs with direct access to the White House and with direct supervision of the Alliance for Progress?

RECOMMENDED POSITION

1. The concentration of responsibility is welcomed and, i fact, follows closely my proposal of October 10th when I urged: "That an independent agency with direct responsibility and access to the President be created with authority to coordinate the work of all the dozen or more U.S. agencies and U.S. representatives in international agencies dealing with Latin American affairs."

2. As I suggested on October 10, the job which Mr. Mann now fills is of such importance and should be given such emphasis that a new rank of Undersecretary of State for Inter-American Affairs should be created.

3. I would like to call attention to the other proposals made at that time to put our Latin American policies in order:

a. The United States should restore the multi-lateral approach - so effective in the 1940's and as restated in the Act of Bogota - to its relationships with its sister republics in this hemisphere. Consultation and joint action are the fundamental elements of this policy.

b. To implement more effectively the development of the multilateral approach, the OAS should reactivate the Inter-American Development Commission with its twenty-one national commissions, which was abandoned after W.W. II, as the prime instrument for multilateral economic planning and action throughout the hemisphere.

c. We should really mobilize the forces of private enterprise to play their rightful role on a cooperative inter-American basis in spurning economic growth throughout the hemisphere with emphasis on private investment and trade.

FOR RELEASE TO THE AFTERNOON PAPERS OF THURSDAY DECEMBER 17, 1959

RICHARD AMPER, PRESS SECRETARY TO THE GOVERNOR

STATE OF NEW YORK
EXECUTIVE CHAMBER
ALBANY

REMARKS BY GOVERNOR ROCKEFELLER PREPARED FOR
DELIVERY AT LUNCHEON OF DALLAS COUNCIL ON
WORLD AFFAIRS AND THE PRESS CLUB OF DALLAS,
SHERATON-DALLAS HOTEL, DALLAS, TEXAS

THURSDAY, DECEMBER 17, 1959

I would like to talk with you today about a critical test and proof of United States leadership in the world. I refer to this nation's role in the Western Hemisphere, with particular respect to Latin America.

When we look toward our neighbors to the south of us today, we find widespread trouble. We find anti-American upheavals and a disintegration of orderly government in Cuba, with indications that the Cuban Government is encouraging armed intervention in the affairs of neighboring states. A case in point is the fear of invasion wide-spread in Guatemala. We see anti-American demonstrations in Panama and elsewhere in Latin America. Guns have been firing in Paraguay within the past few days. We see evidences of trouble in Bolivia and Brazil, and a flight of capital from Venezuela. There are rumblings of more trouble to come elsewhere.

We cannot ignore the warnings implicit in these widespread disturbances, we cannot pass off these troubles as superficial or transitory events. They must be a cause of deep concern to all of us here in the United States. The President, by his action in appointing an advisory committee to the Secretary of State on Latin American affairs, has evidenced his sensitivity to this situation. There is clear evidence of the need to strengthen the forces of democracy and unity throughout the Western Hemisphere. This strengthening is essential of accomplishment in the interest of the security and well-being of all the Americas, and the cause of peace and freedom throughout the world.

The awakened hopes and aspirations of the peoples of the Americas are outrunning the political stability and the capacity needed to deal with them. They are outstripping the rate of economic growth necessary to provide even the minimum, essential material needs of the fastest growing population in the world.

All over Latin America we find this tremendous population increase. The astounding fact of the matter is that competent authorities expect the population of these twenty republics to reach five hundred to six hundred million by the year 2000 -- just forty years from now. It already is close to two hundred million, or roughly ten per cent more than that of the United States. By the turn of the century, by the year 2000, Latin American population may well amount to twice the population of the United States and Canada combined. Or, looking at it another way, forty years from now the combined population of all the Western Hemisphere nations may well be over one billion people.

Along with this population explosion, there has been a tremendous upsurge in the desires of the people of Latin America for a better life. With improving communications, with greater knowledge of how others live, many of the people of Latin America are increasingly dissatisfied with their marginal existence, increasingly discontented with the circumstances surrounding their lives.

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With this great population increase, the rate of economic growth in Latin America must be a great deal faster than ours if the peoples of the Americas are to raise their living standards materially. The magnitude of the problem they face is emphasized by the fact that average per capita income in Latin America is less than four hundred dollars a year compared with about nineteen hundred dollars in Canada and about two thousand five hundred dollars in the United States. (These figures were computed on a gross national product basis for 1958.) The highest per capita figure for any Latin American country is well below the Canadian level, and the lowest is not much higher than the level prevailing in the less developed parts of Asia and Africa.

Compounding the difficulty is the fact that the people of Latin America have not had an opportunity to develop the stable political organizations essential to the functioning of strong democratic institutions. Without this framework of stable government, these nations often have lacked the capacity to meet the demands and needs of their people in the fields of education, nutrition and health.

Thus it has been easy for demagogues to exploit the resulting dissatisfaction and human suffering and to seize power, usually by military force.

This lack of political stability in so many areas in turn has discouraged the development of the economic and social institutions essential to realization of the peoples' aspirations.

Relentlessly, over the years' extreme nationalist forces from within and communist forces directed from without have been exploiting the suffering and thwarting the aspirations of the people of the Americas.

We must also recognize that this situation is further complicated by the fact that most of the Latin American countries do not have complete control over their own economies. This results on one hand from their major dependence upon export of raw materials such as coffee, copper, tin, sugar and bananas -- which are subject to violent fluctuations of world prices. A drop in the price of any of these commodities can cause havoc within the countries which export them. They are equally dependent upon imports of machinery and equipment and manufactured goods -- the price of which is seriously affected by inflation and rising costs in other countries. Thus, the economies of the Latin American countries are importantly influenced and often adversely affected by factors outside their borders and beyond their control.

This situation just adds to the difficulties and complexity of the economic, social and political problems throughout Latin America. Without the closest international cooperation, primarily from the United States, their principal customer and supplier, it will be increasingly difficult for these countries, alone, to deal effectively with their problems.

The Soviets are just beginning to exploit this situation by offering trade agreements and promising aid on a large scale.

The serious implications of this should be a sharp warning to us. There is nothing abstract or academic or distant about this situation. We, in the United States, have a tremendous stake in Latin America, a tremendous personal and national interest, and fortunately, it is a mutual interest.

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For instance, the United States sells over forty per cent of its exports in the Western Hemisphere and gets fifty-five per cent of its imports from the Hemisphere. United States private investment in Latin America totals a staggering twenty-five billion dollars, as against less than sixteen billion dollars in all the rest of the world. The future of these investments, which have played such an essential part in the economic growth of these countries and have made such an important contribution to the increase in the standard of living of the people, is dependent upon the stability of strong, democratic governments. Seen in this perspective, the disturbing events in Cuba take on new significance. Property after property is being expropriated there with only unfulfilled promises of compensation in government bonds of a nation which seems to be rapidly working its way into bankruptcy.

Now let us look to the broader implications of our Western Hemisphere relations. Let us examine the role and importance of Western Hemisphere unity to the cause of peace and the security of all free nations.

The tremendously significant role which the American Republics played during World War II and their great contribution to the organization of the United Nations in San Francisco -- and particularly in developing the concept of mutual security -- is a matter of historic record.

As we now look into the long future and face the basic conflict which divides the world between those who believe in the concept of the freedom and dignity of the individual and those who believe in man as merely a cog in a machine serving the state, we must again recognize the vital importance of a strong, united Western Hemisphere as one of the principal foundation stones of U.S. foreign policy.

Let's face it: If we are unsuccessful in preserving and developing a strong and vital free association of free peoples in the Western Hemisphere, it will cast doubts on our ability as a leader in the free world.

Since World War II, we must recognize in all honesty that the United States has carried a fantastic burden in terms of the number and the complexity of problems which it had to meet in all corners of the world. Many of these have burst upon us in crisis proportions. The result has been, understandably but regrettably, that less attention has been given to our own Hemisphere. However, the time may well be upon us when the problems in the Western Hemisphere are among the most serious international problems we face. In my opinion, there is no time to waste in taking the steps necessary to erect the foundations on which an enduring structure of Western Hemisphere unity can be built.

Let me emphasize that I am not talking about crash programs to meet temporary emergencies. I am talking about a fundamental determination by the people of the United States that the unity of the Western Hemisphere, and the strength and vitality of the economic, social and political structures of the individual nations of the Western Hemisphere, are essential to our mutual security and the well-being of our respective peoples. I am talking about a basic determination to make the unity and strength of the Western Hemisphere a prime and permanent objective of U.S. foreign policy.

I stress this point because only as and when the people of Latin America are convinced that this really is our permanent policy can we expect them to join us whole-heartedly and without reservation in building a Western Hemisphere political structure that will

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be lasting. We must remove any reason for them to suspect that our concern and full cooperation will be forthcoming only when some grave crisis directly affects our own interests.

Our own national interest dictates that our determination as a nation and a people can be nothing less than full and understanding cooperation on a sustained basis in the mutual interest of all the peoples of the Western Hemisphere.

Our common goals must be: first, a strong and united Western Hemisphere; secondly, to strengthen the forces of democracy in all the American republics; and third, to achieve ever greater opportunity and well-being for all our peoples.

To achieve these goals, I recommend that the United States support the following action:

1. A revival of constant and close inter-American consultation on all matters of mutual concern on both a bilateral and a multilateral basis, within and without the Hemisphere. The tradition of frank and open consultation is one of the great traditions of Western Hemisphere relations. We must be in much more intimate contact with the other republics, on a current basis, individually and collectively. There must be a clearer development of common objectives and a more coordinated effort of joint action in the political and economic, as well as the social and cultural fields.

2. A common determination at an early meeting of foreign ministers of a Western Hemisphere position and action to deal with some of the serious political problems that threaten the unity and security of the Hemisphere. We must face these problems on an inter-American basis. We must determine a common policy to deal with political threats to Western Hemisphere security.

3. Steps to bring about the ultimate goal of Western Hemisphere economic union. The establishment within the Hemisphere as a whole of a free flow of goods, capital and manpower would result in the creation of the greatest free trading area in the world. It would contribute immeasurably to economic growth and a rising standard of living of the peoples of all our nations, including Canada. It would encompass more than half the productive capacity of the world and would be a tremendously important bargaining unit in the face of the growth of similar units in other parts of the world. I have no illusions about the difficulties of achieving such a grand design. We should accept and encourage regional economic accords within Latin America as interim stages toward this goal. But to speed attainment of the interim stages, and to assure attainment of the ultimate goal, we must set our sights now on the final objective of a Pan American Economic Union.

4. The development of an imaginative joint inter-American program to meet the social problems of the Western Hemisphere. We must pool our experience and devise means to attack the emerging social problems -- such as education and nutrition, urban housing and rural health -- that the tremendous increase of population is bringing to this Hemisphere and will continue to bring in rapidly increasing tempo. Again, it seems to me that we will get effective results only through sustained Hemisphere cooperation.

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5. A greatly expanded program in the fields of culture, exchange of people and information, dedicated to mutual understanding. Recent events indicate clearly the need to bring about a better knowledge and understanding among the peoples of the Western Hemisphere. We must establish and maintain closer personal ties. We must make greater use of the printed word, radio and particularly television, as a channel of communication. We need wider interchange of students, artists and intellectuals, as well as business and professional people.

We in the United States must encourage our schools and universities, newspapers and other publications to lay greater stress on Latin America -- its people, its history, its progress and its problems.

The economic, political and social interdependence of the Western Hemisphere -- not to mention the strategic interdependence -- is a fact of modern life. It will constantly become a more urgent factor in our outlook upon the world. We must bend our will and our energies to building upon this interdependence an effective instrument of freedom.

Simon Bolivar, the Latin American liberator, was a man with a great dream. He had the vision and the knowledge of what must take the place of empires when they fail -- a free association of free peoples in free nations, working together in their common interest. That dream found expression in the Pan American Union, which has done so much to help realize the mutual aspirations of the Americas.

Now it is within our power to make Bolivar's dream come true -- a truly united Western Hemisphere that will lead the world to liberty, to peace, and to the fullest realization of the aspirations of all mankind.

[c]

Western Hemisphere Unity

AN ACTION PROGRAM TO COUNTER
THE COMMUNIST THREAT BY STRENGTHENING
DEMOCRACY AND FREEDOM

An Address presented to the
New York Young Republican Club

July 12, 1960

GOV. NELSON A. ROCKEFELLER

STATE OF NEW YORK

[Lc]

NOTE: The following address was delivered by Governor Nelson A. Rockefeller at a luncheon of the New York Young Republican Club in New York City, Tuesday, July 12, 1960. This is one of a series of addresses and statements by Governor Rockefeller on major issues confronting the people of the United States.

# WESTERN HEMISPHERE UNITY

An action program to counter the Communist threat
by strengthening democracy and freedom

JUST TWENTY years ago this month, I was called to the White House by President Roosevelt as his Coordinator of Inter-American Affairs and asked to undertake an intensive program to eliminate Nazi infiltration from Latin America.

For almost ten years, I had been visiting and working in Central and South America. My deep concern about the deterioration of our relations with our neighbors to the south had led me to make certain recommendations to the President — out of which developed my appointment as Coordinator to improve the commercial and cultural relations between our countries and to strengthen the ties of Western Hemisphere unity.

The time of that particular meeting with the President in July of 1940 was an ominous moment in the history of freedom. France had just fallen. England was bracing herself against invasion. And in Latin America, Axis agents were engaged in a massive effort through propaganda, subversion and economic penetration to be able to paralyze resistance in the Americas for the moment of eventual military invasion of the Western Hemisphere — a prospect which then seemed only too real.

By the time of Pearl Harbor, less than a year and a half later, the job of eliminating pro-Nazi individuals and firms from representation of U. S. business in Latin America had been virtually completed, thanks to the cooperation of American private enterprise. And with the advent of war began the greatest period of Western Hemisphere unity and common effort in the history of the Americas.

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As Coordinator and later as Assistant Secretary of State for Inter-American Affairs, I spent five strenuous years organizing and directing a wide variety of activities, all designed to help strengthen the forces of democracy in the Western Hemisphere and make possible the realization of the hopes and aspirations of its people for greater opportunities for self-realization.

Those years were a period of peak activity, but neither the beginning nor the ending, of a deep personal involvement in Hemisphere matters which has occupied my attention over more than a quarter of a century, through more than half my lifetime.

And so today, in speaking with you about the current world situation with special reference to the Western Hemisphere, I do so with conflicting emotions.

I have a strong sense of history repeating itself — unhappily. Russia was the immediate cause of the Monroe Doctrine's proclamation in 1823 — for Czarist Russian imperialism then was just as arrogant in its threat to the security and freedom of the United States and the Western Hemisphere as Communist Russian imperialism is today. And the threat to peace, to freedom, to democracy and to human dignity that again confronts us dramatically right here in the Western Hemisphere — this time Communist instead of Czarist or Nazi — is of even more deadly potential than that of twenty years ago, despite the fact that the world is not now engaged in shooting war.

I am deeply aware that since the end of the last war, due to our preoccupation elsewhere in the world, we have let deteriorate the vitality and strength of one of the priceless associations of free men — namely that of the Pan-American Union. Now, again, we are faced with the urgent necessity of revitalizing those historic ties in the face of a grave emergency.

We must recognize that in doing so under these circumstances, we have to overcome major psychological and emotional barriers of suspicion and distrust. Only to the degree that we are now sincerely ready to join with the other American republics in a permanent association dedicated to common objectives and common action will we be able to regain their confidence and restore the unity and solidarity of the Hemisphere.

It is a tragedy that, once again, it has taken a major threat to our own security to reawaken us to the importance of an association that has always been of such great importance — that has such deep human value and such significance in terms of the realization of the dreams of free men.

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But I also have a feeling of basic optimism. I know the people of Latin America. I have always been confident that the collective strength of the forces of democracy in the Western Hemisphere, if dedicated to a common purpose, soundly organized and wisely channeled, could and would meet triumphantly the hopes and aspirations of our peoples as well as the challenge to security and freedom which confronts us. But we must act quickly and boldly.

Let us, then, examine the nature of the challenge, the implications of that challenge raised by the recent events in Cuba, and, finally, what we must do about it.

# I. The Challenge

These grave times demand that we face realistically this fact:

That we live in a world of basic conflict between those who believe in the dignity of the individual everywhere as a creation of God and in the freedom of each to develop his fullest potential in realization of his human aspirations, and those, on the other hand, who hold to the concept that the individual has no higher destiny than to serve as a cog in the machinery of a Godless and all-powerful State.

In this struggle we have attained the high privilege of becoming the symbol and the hope of those who believe in national and individual freedom.

It is a privilege implicit in the spiritual heritage upon which this Nation was founded — a heritage proclaiming the supreme worth of the individual. And let us never forget that it is also a privilege bravely won and dearly preserved by the blood and treasure of generations of Americans, including our own.

The magnitude of the challenge is clearly indicated by recent international events, from Japan to Italy, from Korea to Turkey, from Paris to Havana.

For those who delude themselves by thinking that the Communist aim of world domination or the duplicity of their strategy to achieve it have changed in the light of Mr. Khrushchev's protestations about "peaceful coexistence," let me quote from Mr. Khrushchev's statement of only last Saturday when he said:

> "One should not forget that now the United States is no longer at an unreachable distance from the Soviet Union as it was before. Figuratively speaking, in case of necessity, Soviet artillerymen can support the Cuban people with their rocket fire if aggressive forces in the Pentagon dare to start an intervention against Cuba."

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LC

## II. Threat In Cuba

Against this background of the ruthless, relentless threat of a world-wide Communist drive to subvert and subjugate all free men, we cannot avoid the grave implications of the recent events in and relating to Cuba — a major Western Hemisphere nation only 90 miles off our coastline.

The legitimate aspirations of the Cuban people — for freedom and for human dignity — led to a revolution which had widespread popular support in the United States, for it was a revolution to overthrow a tyrannical dictator.

Tragically, it now appears clear that, due to lack of experienced democratic leadership in Cuba — a lack for which free democratic nations share some of the responsibility — the Communists have been able to infiltrate, exploit and increasingly direct the efforts of the revolutionary government.

As a result, it is plain that the hopes of the Cuban people for freedom and individual opportunity are not only being betrayed and frustrated but that there is emerging an even more ruthless tyranny than previously existed.

At the same time, Cuba is now being used as the principal Communist base in the Western Hemisphere from which men, money and propaganda are moving into the other American republics on an unprecedented scale, boring into the political and social fabrics of these nations with the objective of undermining their governments and destroying the forces of democracy and Western Hemisphere unity.

In all realism, we must face the fact that certain other of the weaker Western Hemisphere nations are currently vulnerable to this onslaught. It is conceivable that pro-Communist governments of the Castro type might be established through revolutionary coups in one or more of these countries in the near future.

Should additional Communist-dominated, Castro-supported governments come into power, it could destroy the entire structure of inter-American unity and the strength of the democratic forces in the Western Hemisphere so essential to the security of all the Americas.

I know from close personal and continuing association with the leaders and the people of various countries in Latin America how deeply they are concerned about the present situation.

There is genuine cause for their concern. And the fact that our relative military strength has declined to such a point that Mr. Khrushchev has the confidence and audacity to try nuclear missile blackmail

6

against United States action in the Western Hemisphere to defend the forces of freedom is cause for the gravest concern on our part.

We must also face up to the possibility that Mr. Khrushchev's planned visit to Cuba may be accompanied by announcement of a military pact giving Russia air bases, missile bases and submarine bases in Cuba.

Should this happen, it would accelerate the shift in balance of military power against the United States and profoundly underline our nation's present vulnerability to nuclear devastation.

The Soviets have operational today large quantities of short-range or thousand-mile missiles which under any such arrangement would be based only 90 miles from our shores. And we must remember that we have as yet no defense against missile attack.

It is grimly apparent that we and the other American republics are faced with the greatest danger and the greatest test of our generation.

Decisive action now is imperative. But the nature of our action is of the utmost importance.

Our basic objective must be to revitalize the strength and unity of the Western Hemisphere and the forces of democracy in the individual countries.

To accomplish this objective, we must act in concert with our neighbors in the Hemisphere. Drastic unilateral action against Cuba on our part would thwart our own aims. For without the sanction of the other American republics, we might well swing popular sentiment in those countries against us and toward Castro. Events in Mexico are a timely warning of this staggering danger.

Should this happen, we might find ourselves virtually isolated, having lost the unity of the Western Hemisphere which has been the foundation of our strength and security.

The Administration has shown great and commendable restraint in this respect. But as the President made clear in his statement yesterday, restraint is no longer enough.

I warmly applaud the objectives set forth in the President's statement and I am confident that he will have the full backing of the American people in his efforts. Now is the time for all-out, positive action.

For we cannot wait until after the elections this November to take the measures necessary to reunite the Hemisphere.

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### III. What We Must Do

Therefore, I recommend *immediate* consultation at the highest level with leaders in the other American republics to prepare for an inter-American conference of foreign ministers to be held *in August* to accomplish the following:

**ONE:** Agree upon the goals and plans for a major Western Hemisphere cooperative effort to achieve immediate action for industrialization and agrarian reform together with a broad program of economic and social development.

To translate this into specific programs of action in the individual nations and to design from these a truly meaningful social and economic fabric for the Western Hemisphere as a whole will require intensive analysis and planning. By strengthening the organization and expanding the staff of the Economic and Social Council of the Organization of American States, this existing body could well become the central instrument for developing the necessary plans in cooperation with government and private groups in each of the respective countries.

Problems of particular importance which must be dealt with include education at all levels, technical training, public health, modernizing of tropical agricultural production, land reform, processing and distribution of foodstuffs, irrigation, power and transportation, industrial development and research, saving and venture capital investment, and urban development and low-cost housing.

**TWO:** Set as the ultimate goal the creation of a Western Hemisphere Economic Union encompassing regional economic groupings within the Hemisphere.

On the basis of present rates of population growth, there will be approximately one billion people in the Western Hemisphere by the turn of the century, only 40 years from now.

Having an Economic Union as an ultimate goal, and recognizing the importance of regular steps in the economic field toward this goal in the interim period, we would importantly broaden and strengthen the framework within which the Economic and Social Council of the OAS could develop its plans for economic and social growth in the Hemisphere necessary to meet the real needs of this vast population.

**THREE:** Agree upon steps leading to the creation of a Western Hemisphere Confederation — a political framework essential to the realization of economic and social growth.

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This Confederation would be the basis for permanent Western Hemisphere unity and strength within which the forces of democracy in the individual countries could find stability and thrive.

**FOUR:** After these steps have been taken, the conference then will be able to deal with confidence with the problem posed by present developments in Cuba and the intervention of outside powers in Western Hemisphere affairs.

Joint policies of inter-American action must be planned and agreed upon to meet any and all contingencies in both the economic and military sphere if we are to insure protection of the freedom of all the people of the Western Hemisphere.

**FIVE:** To give validity and meaning to such an inter-American effort, it should be supported by a United States Marshall Plan type of program for Latin America.

I am delighted to note that the administration currently is considering such a program. I am confident that this program will not become a matter of partisan politics if it is fully realized how fundamental it is to our national security and the security of the Western Hemisphere. I trust that the Congress will realize this and put aside its election-year preoccupation to give its wholehearted endorsement and approval to the program, and to make the necessary appropriations at its forthcoming August session. In this way, the Congress can give meaning and substance to the forthcoming inter-American conference.

There are certain major projects, comparable in scope and imagination and dramatic impact to the Pan American Highway, which should be undertaken. One example would be an inter-American FHA, as the basis for a massive attack on the slums which are one of the major scourges of the rapidly-growing urban areas in the Hemisphere.

Another would be an East Andes Development Authority, involving the opening-up of the vast fertile areas of the east slope of the Andes Mountains, running for 3,000 miles from Venezuela to Argentina. This involves one of the great untouched and vastly rich agricultural areas left in the world, now virtually inaccessible and lying within the borders of seven nations. With transportation and power, these hundreds of millions of acres can be to South America what the Great Plains of the West were to North America.

If the United States is to play its role in this great concept for the future of the Western Hemisphere, it will have to make some important changes in the organizational structure of those areas of our own govern-

9

ment which now have responsibility for dealing with the various phases
of our relations with the other Western Hemisphere nations.

It is essential to have central direction of all phases of the planning,
implementation and coordination of the various U. S. government opera-
tions relating to Latin America.

At present, these activities are dispersed within a multitude of
agencies and departments. In most cases, moreover, the programs are so
small in scale that they do not get the attention or the leadership essential
to make them truly effective.

Such strong central leadership is of even greater importance under
the present circumstances.

Events in Cuba and the intervention of world Communism in the
affairs of the Western Hemisphere summon us to a dramatic reversal of
the decline in Hemisphere unity and common action which has been
evident since World War II.

No useful purpose can be served by dwelling upon the failings of
the past 15 years. Our purpose must be to resolve upon a whole new
course for the next 15 years — and for all the years thereafter.

What must be proven is that the free citizens and free nations of
this Hemisphere have the will and the wisdom to be as creative in this
20th Century as, in the 18th Century, were our own founding fathers
in the United States and the great liberator, Simon Bolivar, in Latin
America.

Freedom was at stake then, freedom is no less at stake today. And
to preserve that freedom, to save and to serve the dignity and worth of
all individual human beings in this Hemisphere and throughout the
world, we must match the size of our designs and purposes with the
size of the great perils that challenge us.

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[x]

FAILURE IN LATIN AMERICA - AND HOW TO CORRECT IT

THE RELATIONSHIP of the United
States to the countries of Latin
America has always been special and
unique.

Over a century ago, Simon Bolivar had
the vision of a new world of free nations
freely working together in their common
interest in the political, economic and
social fields to build a strong and united
Hemisphere. I wish that, tonight, we could
rejoice in progress toward achieving that
vision.

The sobering fact, however, is that we
find the realization of this common goal
for the peoples of the Western Hemi-
sphere to be more distant this year than it
has been at any time since before the out-
break of World War II. There are serious
elements of deterioration in the structure
of joint effort which was slowly being
erected. Under the present administra-
tion, there have been serious setbacks to
the cause of freedom and human dignity
itself:

(1) The security of the Hemisphere
has been seriously jeopardized;

(2) Democratic institutions are being
undermined; and

(3) Economic and social development
has lagged seriously behind the demands
of population growth.

For nearly 140 years prior to the Ken-
edy administration, the Monroe Doc-
trine had been an underlying guarantee
of the independence of the Republics of
the Americas. Prior to the Kennedy ad-
ministration, no principle of United States
diplomacy was more firm or more certainly
understood and respected throughout the
world. This concept was translated into
a multilateral commitment through the
Treaty of Rio de Janeiro that provided
for joint hemispheric action against any
attack or domination from abroad.

Now these pillars of inter-American
strength and security have been gravely
undermined. Ninety miles from our
shores, we have in Cuba a Soviet military
bastion, an arsenal for communist propa-
ganda and subversion which constitute a
direct threat to all the countries of Latin
America and therefore to our own free-
dom.

Two momentous opportunities to rid
the hemisphere of Communism in Cuba
have already been lost. The failure of
President Kennedy to prevent or at least
retrieve the Bay of Pigs disaster has left
us with a legacy of lost faith on the part
of the peoples of Latin America. The
President's subsequent failure in the mis-
sile crisis to insist upon adherence to our
condition of on-site inspection, and his

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acceptance of the continued presence of
Soviet troops in Cuba, have further under-
scored the weakness of our position in
Latin American eyes.

Communist infiltration of the nations
of Latin America is a clear and threatening
fact — but the current administration
seems to have provided neither the leadership
to combat it nor an effective policy
to deal with it. The tragedy is that this
Communist infiltration, dedicated to the
destruction of freedom, is undermining
the strength and vitality of democratic
institutions in the Hemisphere.

The American Republics share a fundamental belief in human dignity, individual freedom and democratic governments, based upon a common revolutionary heritage of fighting for our respective independence and freedom. And yet, tragically, in the past eighteen months, six constitutionally elected governments in Latin American countries have been overthrown. Furthermore, other nations are threatened by Communist-inspired violence, sabotage and unrest which poses serious dangers to existing democratic governments.

Thus we can only regard the infiltration
of Communism and the upsurge of
dictatorships as an ominous omen for the
future of democracy and freedom in this
Hemisphere.

Economic conditions are equally distressing. Only a few nations reached or came close to the stated minimum goal of the Alliance for Progress of two and a half per cent in per capita income rise in 1962. Inflation has been rampant. Trade between Latin America and the

United States, its largest single market,
has declined.

Despite the fact that Latin America
has the fastest-growing population of any
major area of the world, conditions in the
fields of education, health and housing
have shown little firm progress to meet
this challenge.

This is the background against which
our Latin American policies for the pres-
ent and the future must be considered.

II

UNDER President Eisenhower, we
met with the nations of the Hemi-
sphere and signed the Act of Bogota
which marked a return to the multilateral
action that had previously proved so effec-
tive. The American Republics recognized
in the Act of Bogota that the only way
they could deal effectively with their
problems was on a multilateral basis —
through actions jointly conceived, jointly
defined and jointly implemented.

Unfortunately, President Kennedy has
not continued this joint inter-American
approach. Instead, he has allowed the
unity and common effort of the Hemi-
sphere to splinter into uncoordinated, un-
directed efforts. This has resulted in con-
fusion and uncertainty.

Put forth by the Kennedy administra-
tion in 1961 ostensibly as an implementa-
tion of the spirit of Bogota, the Alliance
today has all the earmarks of just another
United States aid program, for its opera-
tions have not been those of a truly multi-
lateral program.

3

In actual fact today, despite the pro-
claimed objectives, the Alliance for Prog-
ress represents neither an alliance nor
progress. It has not created the all-im-
portant sense of unity and common effort
among the peoples of the Americas. It has
failed to catch the imagination of Ameri-
cans throughout the hemisphere. In fact,
in Latin America the program has antago-
nized the very groups whose help it needs
most — namely, the governments and also
the business communities which are re-
sponsible for eighty per cent of total pro-
duction in Latin America.

In October, 1962, the Organization of American States asked former Presidents Lleras-Camargo of Colombia and Kubitschek of Brazil to make a study of the program. Although they presented separate reports, both came to similar conclusions. President Kubitschek stated that: "In its first two years of operation, the Alliance for Progress has fallen far short of meeting the ideals repeatedly proclaimed by President Kennedy. . . . Between the auspicious statements of the President of the United States and the execution of the program of the Alliance for Progress lies an almost frozen expanse."

### III

UNDERLYING THE SOCIAL and political crisis of the Hemisphere is a serious and deep-seated economic crisis — an overall lag in Latin America's economic growth. This lag has been

largely concentrated in two sectors: domesican private investment, and foreign trade.

## Private Investment

The slowdown in domestic investments coincides with the slowing in economic growth. Since eighty per cent of all Latin American income is generated by the private economic sector, it is evident that vigorous expansion of investment in this field is essential to overall economic growth.

Success here depends to a major degree upon the success of the Latin American nations in providing political stability and fiscal conditions which foster the financial incentives of the individual.

At the same time, much more can and must be done on our part to furnish constructive cooperation in expanding investment in the private economic sector. This is the principal source of creativity and dynamism in achieving economic and social progress.

The first approach involves local capital. More emphasis should be placed on building institutions for the mobilization of local capital for constructive development investment. Specific measures which we should encourage are:

- Establishing credit institutions to finance agricultural modernization, housing development and business expansion;

- Setting up stock markets to facilitate equity investments and

- Launching mutual funds to encourage the flow of savings into ownership of local enterprises.

4

The second approach involves U. S. pri-
vate investment. We must design meas-
ures to increase the flow of our private
investment in Latin America, jointly with
Latin American private capital.

Foreign Trade

The other vital element in Latin Amer-
ica's economic growth is international
trade.

Latin America's exports last year were
only slightly over $9 billion, only four
per cent above the figure for five years
earlier. This disappointing export record
has been compounded by three elements:
(1) a slow growth in the physical volume
of Latin American exports, (2) a drop in
export prices, and (3) the advent of
regional economic agreements which dis-
criminate against Latin American prod-
ucts.

As all of you know, most of the Latin
American countries are heavily dependent
upon one or two commodities to make
up the bulk of their exports. A decline
in the volume of these exports, or a fluc-
tuation in their world prices, can erase
whatever aid is available under the Alli-
ance.

1. Commodity Stabilization

The problems resulting from fluctua-
tions in the prices of primary commodity
exports of the Latin American nations is
one which concerns virtually all the coun-
tries of the free world, both producers and
consumers. These problems can only be
dealt with through joint international
action, but the Alliance for Progress has
simply not provided sufficient leadership
in this field.

2. Trade Barriers

Along with stabilization of commodity
prices, an effort must be made to relax
our tariffs and quotas which presently put
Latin American exports at a disadvantage.
It has been estimated that a liberalization
of existing U. S. restrictions might increase
Latin American exports to the U. S. by as
much as one-third.

3. Regional Agreements

The trend of the past few years toward
regional economic accords promises to
revolutionize the basic terms of world
trade relationships. Latin America has a
crucial stake in the outcome of these
developments.

For example, the Common Market
plans to grant special concessions to Afri-
can states. Since Latin American and
African states produce many of the same
products, this competitive disadvantage
will place at stake a market which, in
1961, purchased about $1.6 billion or al-
most nineteen per cent of Latin America's
exports.

The failure of the administration to
take the lead in hard and concerted bar-
gaining to prevent developments along
this line could have a devastating effect
upon the export prospects of Latin
America. There is an enormous need for
the U. S. to join with its Hemisphere
neighbors to oppose such preferences.

IV

THE WESTERN HEMISPHERE has
the greatest potential of any area in
the world in the opportunities of its citi-

ξ

zens to realize their maximum potential as individuals.

If this Hemisphere is to achieve that potential — if it is to realize its opportunities to fulfill the aspirations of all its peoples—then Hemisphere objectives must have constant top priority in our national policies and actions. But this kind of top priority requires a coherent and effective organizational framework within our federal government.

The present picture is one of both confusion and diffusion of responsibility among a dozen or more federal agencies.

The Alliance for Progress is buried in the midst of this confusion as a subsection of a dependency of the Secretary of State.

There is no clear-cut authority for those responsible. Coordination between the U. S. agencies, the international agencies and the governments of the individual nations is wholly inadequate.

The individual people who are charged with the operation of the Alliance are dedicated and sincere men and women — but they have not been given the authority and the status necessary to do the job.

I would like to pay particular tribute to my long-time friend, Ted Moscoso, who brings such unique experience, skill and knowledge to his most difficult and vital undertakings.

V

IN SIMPLE TERMS, a special relationship with Latin America requires a special structure within our federal gov-

ernment — and no such structure now exists.

I therefore propose:

1. That a new post of Undersecretary of State for Inter-American Affairs be created to mark the special importance of this Hemisphere relationship and to bring into focus at top policy level our relations with the nations of the Hemisphere.

2. That an independent agency with direct responsibility and access to the President be created with authority to coordinate the work of all the dozen or more U. S. agencies and U. S. representatives in international agencies dealing with Latin American affairs.

3. That the United States restore the multilateral approach — so effective in the 1940's and as restated in the Act of Botswana — to its relationships with its sister republics in this Hemisphere. Consultation and joint action are the fundamental elements in this policy.

4. That to more effectively implement the development of the multilateral approach, the Organization of American States reactivate the Inter-American Development Commission with its twenty-one national commissions, which was abandoned after World War II, as the prime instrument for multilateral economic planning and action throughout the Hemisphere.

5. That we really mobilize the forces of private enterprise, the creative dynamic forces which have made this nation great, to play their rightful role on a coopera-

6

Ann Black 3/19/64

DRAFT SPEECH ON LATIN AMERICA

Over 23 years ago -- in the summer of 1940 -- I was
called to the White House by President Roosevelt as his Coordi-
nator of Inter-American Affairs and asked to undertake an inten-
sive program to eliminate Nazi infiltration from Latin America.

For almost 10 years, I had been visiting and working
in Central and South America. My deep concern about the deteri-
oration of our relations with our neighbors to the south had
led me to make certain recommendations to the President-out of
which developed my appointment as Coordinator.

The time of that particular meeting with the President
was an ominous moment in the history of freedom. France had
just fallen. England was bracing herself against invasion. And
in Latin America, Axis agents were engaged in a massive effort
through propaganda, subversion and economic penetration to be
able to paralyze resistance in the Americas for the moment of
eventual military invasion of the Western Hemisphere -- a pros-
pect which then seemed only too real.

By the time of Pearl Harbor, less than a year and a
half later, the job of eliminating pro-Nazi individuals and firms
from representation of U.S. business in Latin America had been
virtually completed, thanks to the cooperation of American pri-
vate enterprise. And with the advent of war began the greatest
period of Western Hemisphere unity and common effort in the his-
tory of the Americas.

As Coordinator and later as Assistant Secretary of State
for Inter-American Affairs, I spent five strenuous years organ-
izing and directing a wide variety of activities, all designed
to help strengthen the forces of democracy in the Western Hemis-
phere and make possible the realization of the hopes and aspira-
tions of its people for greater opportunities for self-realization.

Those years were the period of peak activity, but neither
the beginning nor the ending, of a deep personal involvement in
Hemisphere matters which has occupied my attention over more than
a quarter of a century, through more than half my lifetime.

It is this continuing concern for the nations of Latin
America which leads me to speak out again on the deteriorating
situation in the Hemisphere.

Six months ago, I voiced my concern over the policy
failures of the Democratic Administration in this key area. I
cited:

1. the situation in Cuba, where the Soviets possess a strongly fortified military bastion and an arsenal for Communist propaganda and subversion just 90 miles off our shore.

2. the undermining of democratic institutions illustrated by the fact that 6 constitutionally-elected governments in Latin American countries have been overthrown during the last two years.

3. the lack of progress in the fields of economic and social development.

Today the situation in Cuba has not improved. What has
become of the Administration's promises to remove Soviet troops
from Cuba and halt the export of Cuban communism? We are still
faced with the presence of over 10,000 Soviet troops in Cuba.

The Cuban-based subversion and sabotage of other Latin American nations has increased. This has been confirmed by the report of the OAS fact-finding mission which substantiated Venezuela's charges of aggression against Cuba.

In spite of the Administration's commitment to strengthen democratic institutions in Latin America, has it taken a strong stand against military dictatorships and coups d'état? On the contrary, the Administration recently announced that it was considering the abandonment of its policy of actively opposing military dictatorships. Such an abandonment would directly defy the principles of the Alliance for Progress.

The Administration has committed millions of dollars to the economic and social development of Latin America, yet have conditions improved? Every day I read reports of rampant inflation in Brazil, of critical housing problems in Venezuela, growing political instability in Chile, to name but a few of the problems.

Our relations with Latin America are further strained by the crisis in Panama. In less than six months, our relationship with that nation deteriorated from one with warm friendly ties to an explosive crisis involving the security of the Panama Canal.

What is one to conclude from all these facts? The Administration has consistently shown a lack of foresight in its policies toward the countries of this Hemisphere.

While it has relied completely upon the Alliance for Progress for solving the problems of Latin America, the Administration has failed to make the Alliance a truly viable multilateral program. The Alliance for Progress, while noble in purpose, has not achieved the all-important sense of unity and common effort among the peoples of the Hemisphere which is a prerequisite of its success. In fact, the program has antagonized the very Latin American groups whose help it needs most. Many changes are needed.

The Alliance is beset by confusion and diffusion of responsibility among many U.S. government agencies, with no clear lines of responsibility. To correct this I propose:

1. a new post of Undersecretary of State for Inter-American Affairs be created to bring into focus at top policy level our relations with the nations of the Hemisphere.

2. an independent agency with direct responsibility and access to the President be established with authority to coordinate the work of all the dozen or more U.S. agencies and U.S. representatives in international affairs.

3. above all the U.S. restore the multilateral approach to its relationships with its sister republics in this Hemisphere. Joint policies of inter-American action must be planned and agreed upon to meet any and all contingencies in both the economic and military sphere if we are to insure protection of the freedom of all the people of the Western Hemisphere.

Events in Cuba and the intervention of world Communism in the affairs of the Western Hemisphere summon us to a dramatic reversal of the decline in Hemisphere unity and common action which has been evident since World War II. Freedom was at stake then, freedom is no less at stake today. And to preserve that freedom, to save and to serve the dignity and worth of all individual human beings in this Hemisphere and

March 23, 1964

MLB Latin American Statement

On March 18th, Thomas Mann, Assistant Secretary of State for Inter-
American Affairs, was reported to have informed U.S. diplomats throughout
the Hemisphere that no longer would U.S. policy oppose dictatorship in Latin
America -- that we would no longer see any difference between democratic and
dictatorial rule in any Latin American government.

This policy, and the announcement of it, may set back the cause of
"good neighborhood," a full decade. And, thereby, the security of our own nation
and our own people may suffer.

Even if the MX policy were a correct one, which I emphatically deny,
how could this Administration be so insensitive as to allow it to be publicly
reported? The whole basis of good relations in this Hemisphere is the unity
of devotion to the needs and desires of the people of the Hemisphere. To say
that we will no longer see any difference between a Trujillo and a Botancourt
is to invite condemnation by the very people it is our avowed policy to serve.
Apparently this Administration has learned nothing from the long history of U.S.
relations with its southern neighbors.

But aside from being publicly reported, the policy is wrong. It is a
direct denial of the "good neighbor" concept. It is a blatant demnunciation of
the fundamental principles of the Alliance for Progress. And it is an entice-
ment to those would-be "Caesars" who now need not fear U.S. rejection.

The "good neighbor" concept of Hemipheric relations is based on the
multilateral consideration of common problems. It is obvious that dictatorial

DRAFT

March 26, 1964

DRAFT RELEASE ON LATIN AMERICA

It is a tragic fact that in Latin America during the three and a half years of the present Democratic Administration, there have been a series of serious setbacks to the cause of freedom and human dignity.

-- The security of the entire Hemisphere has been seriously jeopardized by the establishment in Cuba -- ninety miles from our shores -- of a Communist dictatorship supported by Soviet troops. An OAS Committee has declared Cuba an aggressor against the Venezuelan democracy.

-- Democratic institutions are steadily being undermined and eroded. In the past twenty-seven months, six constitutionally elected governments in Latin America have been overthrown and other nations have been threatened by violence, sabotage and political unrest.

-- Economic and social development has lagged seriously behind the needs. The Alliance for Progress has failed to achieve the all-important sense of unity and common effort among the peoples of the Hemisphere which is a basic prerequisite of its success. It has represented neither an alliance nor progress.

In short, the growth of democratic institutions in the Latin American nations and the strength and the security of the inter-American system, which many of us worked so hard to construct and to nurture during the 40s and 50s, have been gravely undermined in the last three and a half years. The responsibility for the tragic turn of events must be borne in large measure by a Democratic Administration in Washington which has been narrow in its vision, faltering in its execution.

The situation in Latin America today is not unlike that which existed some 23 years ago -- in the summer of 1940. For almost 10 years, I had been visiting and working in Central and South America. My deep concern about the deterioration of our relations with our neighbors to the south had led me to make recommendations to the President for combatting the combined Nazi and Communist menace. The President concurred in my appraisal of the situation. He asked me to take on a new job -- that of Coordinator of Inter-American Affairs -- with the mission of undertaking an intensive program to eliminate Nazi infiltration from Latin America.

France had just fallen. England was bracing herself against invasion. And in Latin America, Axis agents were engaged in a massive effort through propaganda, subversion and economic penetration to be able to paralyze resistance in the Americas for the moment of eventual military invasion of the Western Hemisphere -- a prospect which then seemed only too real.

By the time of Pearl Harbor, less than a year and a half later, the job of eliminating pro-Nazi individuals and firms from representation of U.S. business in Latin America had been virtually completed, thanks to the cooperation of American private

During the five years I spent as Coordinator and later
as Assistant Secretary of State for Inter-American Affairs, the
forces of democracy in the Western Hemisphere were made strong.
That strength was the product of a genuine multilateralism in
foreign affairs, and the recognition by each government that it
was more secure when its people had the opportunity for self-
realization.

Those years were neither the beginning nor the ending of
a deep personal involvement in Hemisphere matters which has occu-
pied my attention over more than a quarter of a century, through
more than half my lifetime.

It is this continuing concern for the nations of Latin
America and our relationships with them which has prompted me
to speak out repeatedly on the deteriorating situation in the
entire area. I shall continue to do so in the weeks and months
ahead, for there are no greater problems anywhere than those we
face in this Hemisphere.

Communism has been carried to our doorsteps and it is
being carried from there by Soviet-trained agents into every
corner of South and Central America.

We can no longer comfort ourselves with the soothing --
and bitterly false -- notion that the tides are somehow running
with us in Latin America.

On the contrary, on every side there is mounting evidence
that freedom and democracy are in grave danger of being swept
aside by strong currents, alien to this hemisphere and to the
ideals we all hold dear.

The danger is real and it is imminent. And yet the
Democratic leadership in Washington seems unable to lift its
policies above the level of stumbling blindly from crisis to
crisis, with no clear objectives and no coherent policy.

The time has come -- indeed it is long overdue -- for
the United States to give top priority to our Latin American
concerns and to provide leadership adequate to the difficult
and dangerous tasks which confront us.

DRAFT--April 3, 1964

ARTICLE FOR COLLEGE NEWSPAPER
ON LATIN AMERICA

The relationship of the United States to the
countries of Latin America has always been special and
unique.

Over a century ago, Simon Bolivar had the vision
of a new world of free nations freely working together in
their common interest in the political, economic and social
fields to build a strong and united Hemisphere. I wish
that, today, we could rejoice in progress toward achieving
that vision.

The sobering fact, however, is that we find the
realization of this common goal for the peoples of the
Western Hemisphere to be more distant this year than it
has been at any time since before the outbreak of World
War II.

--The security of the entire Hemisphere has been seriously jeopardized by the establishment in Cuba--ninety miles from our shores--of a Soviet military base, an arsenal for Soviet propaganda and subversion of the other Latin American countries.

--Democratic institutions are being threatened
throughout the Hemisphere.

--Economic development is not keeping pace for
the need. The Alliance for Progress has
brought neither progress nor an Alliance.

The situation in Latin America today is not unlike
that which existed some 23 years ago--in the summer of 1940,
when I was called to the White House by President Roosevelt,
as his Coordinator of Inter-American Affairs.

For almost 10 years, I had been visiting and
working in Central and South America. My deep concern about
the deterioration of our relations with our neighbors to
the south had led me to make certain recommendations to the
President--out of which developed my appointment as Coordinator.

President--out of which developed my appointment as Coordinator, the south had led me to make certain recommendations to the deterioration of our relations with our neighbor to working in Central and South America. My deep concern about for almost 10 years, I had been visiting and as the Coordinator of Inter-American Affairs.

when I was called to the White House by President Roosevelt, that which existed some 30 years ago--in the summer of 1940, The situation in Latin America today is not unlike the Coordinator of Inter-American Affairs.

--Economic development is not keeping pace for the need. The Alliance for Progress has throughout the Hemisphere.

--Democratic institutions are being threatened American countries.

War II.

has been at any time since before the outbreak of World Western Hemispheres to be more distant this year than it realization of this common goal for the peoples of the

The opening fact, however, is that we find the that vision.

that vision. We could rejoice in progress toward achieving fields to build a strong and united hemisphere. I wish their common interest in the political, economic and social of a new world of free nations freely working together. In Over a century ago, Simon Bolivar had the vision

united. The relationship of the United States to the countries of Latin America has always been special and

ON LATIN AMERICA
ARTICLE FOR COFFEE MARKET

DRAFT---April 3, 1964

At that time, Axis agents were engaged in a massive effort through propaganda, subversion and economic penetration to paralyze resistance in the Americas for the moment of eventual military invasion of the Western Hemisphere.

By the time of Pearl Harbor, less than a year and a half later, the job of eliminating pro-Naxi individuals and firms from representation of U.S. business in Latin America had been virtually completed. With the advent of war the greatest period of Western Hemisphere unity and common effort in the history of the Americas began.

As Coordinator and later as Assistant Secretary of State for Inter-American Affairs, I spent five strenuous years organizing and directing a wide variety of activities designed to help strengthen the forces of democracy in the Western Hemisphere.

Those years were part of a deep personal involvement in Hemisphere matters which has occupied my attention through more than half my lifetime.

Events in Cuba and the intervention of world Communism in the affairs of the Western Hemisphere summon us again to a dramatic reversal of the decline in Hemisphere unity and common action which has been evident since World War II.

Freedom was at stake then, and freedom is no less at stake today. And to preserve that freedom, to save and to serve the dignity and worth of all individual human beings in this Hemisphere and throughout the world, we must match the size of our designs and purposes with the size of the great perils that challenge us.

the size of the great barbels that challenge us.
we must match the size of our designs and purposes with
human beings in this Hemisphere and throughout the world,
to save and to serve the dignity and worth of all individuals
free at stake today. And to preserve that freedom,
freedom was at stake then, and freedom is no

World War II.

unity and common action which has been evident since
we again to a dramatic reversal of the decline in Hemisphere
Communism in the affairs of the Western Hemisphere ammon
Events in Europe and the intervention of world
through more than half my lifetime.

ment in Hemisphere matters which has occupied my attention
Those years were part of a deep personal involvement
Western Hemisphere.

designed to help strengthen the forces of democracy in the
years organizing and directing a wide variety of activities
of State for Inter-American Affairs. I am proud five attestation
As Coordinator and later as Assistant Secretary

common effort in the history of the Americas began.
war the greatest period of Western Hemisphere unity and
America had been virtually completed. With the advent of
and firms from representation of U.S. business in Latin
and a half later, the job of eliminating pro-Maxi individuals
By the time of Pearl Harbor, less than a year

Hemisphere.
the moment of eventual military invasion of the Western
penetration to paralyze resistance in the Americas for
massive effort through pre-eminences, supervision and economic
At that time, Axis agents were engaged in a

- 5 -

April 13, 1964

A WESTERN HEMISPHERE CHARTER

The dominant fact of our time is that no nation --
however large -- can exist in isolation. No more urgent task
confronts humanity than to devise an international order which
recognizes the interdependence of peoples everywhere.

Two conflicting conceptions of order exist now in the
world. The Communist solution offers only one way to order:
Centralized bureaucratic control, both within and among nations.
The quarrels of the Soviet Union, first with Yugoslavia and now
with Communist China, are above all due to the inability of
Communism to permit or even to respect variety. Communism is
doomed to mediocrity because a single doctrinaire approach must
produce stagnation.

The other concept is that of a voluntary association of
free people, which I have called the Union of the Free. This
implies a world structure respectful of diversity but animated
by a common dedication to freedom; united by purposes greater than
national selfishness, but with enough flexibility to give scope to
the contradictions of proud and dignified peoples. A vital inter-
national order -- just as a healthy democracy -- draws its
dynamism from pluralism. It encourages initiative and imagina-
tion; its well-spring is the free spirit seeking fulfillment.

This is why the future of Western Hemisphere relations
is so crucial. For the Western Hemisphere is, in many respects,
the most dynamic area of the world today. Its rise of population
is extraordinary. And yet it is matched by vast resources. This
hemisphere has a long -- if spotty -- history of establishing a
concept of partnership. (Add Simon Bolivar, etc.)

(Add Stacy May material about trade partners -- compare
statistics with 1940.)

The challenge extends beyond the Western Hemisphere. The
free peoples require nothing so much as an affirmative act of the

spirit. Each great achievement was a vision before it became a
reality. It was a dream of some before it became a fact for all.
The free world today suffers from an obsession with the solution
of day-to-day crises. In concentrating on the symptoms, it
magnifies the causes.

The free peoples must regain their faith in the possibility
of great achievement.

This is why a program for the growth and vitality of the
Western Hemisphere is so vital. Its motivating force should not
be to stop Communism -- though this will be its by-product. It
should be to inspire free peoples everywhere with confidence
and hope in the future. It should be to make democracy a living
force -- a catalyst in the triumph over disease, poverty and
ignorance. No lesser dedication is adequate to the challenge of
freedom.

In no part of the world is the opportunity as great. Here
is only a short list of the tasks on the Western Hemisphere agenda.
Nutrition is inadequate in most Latin American countries. The
processing and distribution of food must be improved. Transporta-
tion is inadequate. Power sources must be developed. Education
is lagging far behind the need.

Above all, there is a need for hope and confidence in the
future -- that intangible quality without which freedom cannot
thrive. A truly cooperative Western Hemisphere system requires
some commitment to free government. Democracy and tyranny, whether
of the left or of the right, cannot jointly build a true community.

Our task then is not to confine our goals to the elimination
of poverty by whatever means. To free peoples mean as and ends
are closely related. We should strive for societies so organized
that those with ability can rise to the top and make their contribution
to the social process. And we should encourage government by the
consent of the governed, and not embrace efficiency as our only
goal.

Before turning to some specific measures to implement
these concepts, I would like to stress the attitude which must
animate them. Partnership cannot be a one-way street. We cannot
expect our friends to confine their roles to implementing our
blueprints.

This has been one of the major problems with the Alliance
for Progress. We announced a major collaborative effort in
ringing terms of extravagant promise. We presented the Latin
American countries with a made-in-USA list of "reforms" to which
they were expected to conform without giving them any opportunity
to judge their applicability. We left the channeling of respects
to a multiplicity of largely uncoordinated U.S. agencies, each
operating under its own criteria and each applying its own
supervision.

The result was an almost complete failure to communicate
any sense of a truly joint effort. Much of the friction in the
Alliance for Progress is due to the fact that the goals for the
program have been set for our allies rather than with them.

One of the most urgent tasks is to reestablish confidence
and mutual trust in the Western Hemisphere. We must create a
true partnership where each member feels responsible for the
common good because he feels he plays a serious role in its
formulation.

In devising these programs, there is need for flexibility
of approach. Some require the joint effort of all the nations of
the Western Hemisphere. Others can be most efficiently carried
out by a grouping of countries with particular common concerns;
in Central America, for example. But all programs must be designed
to take into account the interdependence of nations and to encourage
cooperative effort.

Above all, they must offer inspiration. The tasks are too
great and the time is too short to rely on ad hoc technical

solutions. We need to raise the hopes and spirits. We need
creativity. In this spirit, I will advance some suggestions for
a Western Hemisphere agenda.

**Western Hemisphere-wide projects.** Nothing is more important
than great efforts that lift the imagination of men to the possibilities
before them. Six areas of effort seem particularly promising:

1. The United States should push the construction of a new sea-level canal to replace the present Panama Canal, which is rapidly becoming unable to serve the needs of the Hemisphere. Not only is it unable to accommodate certain of the most modern naval vessels, but the volume of traffic soon may be greater than it can bear. The construction of the Canal will, of course, be undertaken by the United States, but the project should in a meaningful way be made into an Inter-American venture -- for it will serve the defense and the trade and the economy of the whole Hemisphere. Therefore I recommend that the United States invite representatives of all the Latin governments to sit on an advisory board for the construction of a new canal.

The decision to build a new canal demands of the United
States government a commitment to use peaceful nuclear
explosives for excavation purposes -- which would reduce
the cost of the canal by over 75%. Such a commitment
demands in turn, two reversals of current U.S. policy:
First, the experimentation with peaceful nuclear
explosives under Project Plowshare should go forward
at full speed rather than be subjected to the unwise
budget cuts proposed by President Johnson. Second, the
United States should publicly declare that it does not
interpret the Test Ban Treaty to prohibit the use of
clean nuclear explosives for peaceful purposes. It
is unfortunate that this declaration was not made
last summer as I suggested then.

- 5 -

2. The nations of the Hemisphere should join together in a comprehensive program to find an economic means for the desalinization of sea water. Such a program might include the establishment of processing plants in Peru and Chile. This is among the most exciting adventures of the current search of science for the keys to a better life for all men. To make today's deserts into rich and fertile land is not an unreal dream -- it is possible, in our lifetimes. And it must be made a blessing for all men. The peoples of all our countries must be able to look ahead with confidence to the day when science not only serves the urge to destroy, but as productively the urge to create.

3. It is obvious that one of the fundamental difficulties of Hemispheric unity is the economic, political and military dominance of the United States within and outside the formal institutions of the Hemisphere. In an effort to rectify this problem, the Organization of American States, including the United States, might consider a reorganization which would provide greater balance in its deliberations. One such revision might involve five units with equal voting strength: The United States, Brazil, Norther Latin American (Central America and the Caribbean countries); South Western Latin America (Venezuela to Chile); and South Eastern Latin America (Argentina, Uruguay, Paraguay and Bolivia).

4. The creation of a Latin American Postal Union is a possible and constructive step that can be taken now to stimulate the concepts of mutual confidence and trust which must proceed real progress in the Hemisphere.

5. The nations of the Western Hemisphere should determine now to form a popular American Assembly where representatives of business, labor, education and the professions would

meet in permanent session. The purpose of such an
Assembly would be to promote not just mutual understanding
but the common solution of problems as well. While to
be politically realistic it is clear that such an
Assembly could carry no authority beyond the reputation
of its delegates and dedication of its member-states,
these qualities alone could give the Assembly a powerful
voice in the creation of unified Hemisphere. Positive
proposals for joint action which came from the Assembly
could serve as the agenda for more formal consideration
by official government agents.

6. The seven governments of the region of the Eastern Andes Mountains and the United States should cooperate fully in the joint establishment of an East Andian Development Corporation for the purpose of regional development of the area. The development program would involve carefully integrated construction of transportation, communication and power facilities, the fertilization of land, the establishment of adequate education and health institutions, and the organization of food processing and distribution. Such a joint effort could well serve as a "pilot project" for regional development in the Hemisphere.

The needs in the area of education are similar to other
development needs, but at the same time perhaps even more important
while also more easily understood. Nonetheless there are important
things to do which are not being done. I make the following
proposals:

1. The United States should provide a substantial body of experts, backed by adequate resources, to develop teacher materials needed for educational organization and progress in Latin America.

2. The Latin Governments should be encouraged to separate

- 8 -

The stimulation of private enterprise in Latin America and the promotion of private foreign investment in Latin America are problems which are very closely linked. Success in one program is liable to imply success in the other. And success in both is an absolute prerequisite to the growth of democracy and the preservation of freedom. These two areas are now among the most woefully neglected by the present Administration. I make the following proposals:

1. More emphasis should be placed on building institutions for the mobilization of local capital for constructive development investment. Specific measures which we should encourage are:

- Credit institutions to finance agricultural modernization, housing development and business expansion;

- Stock markets to facilitate equity investments;

- Mutual funds to encourage the flow of saving into ownership of local enterprises;

- Cooperative efforts between private enterprise and local labor organizations to create urban housing projects on a realistic basis with some government financial assistance.

2. The nations of the Western Hemisphere should promote an Inter-American treaty to guarantee Latin investments in other Latin American countries. Some form of meaningful international guarantee appears necessary to enable Latin investors to invest in a neighboring country without fear of confiscation or other punitive measures arising out of national antipathies. In this respect the risks to Latin investors may actually be greater than the risk to U.S. investors. A two to three per cent re-insurance guarantee probably would be sufficient to increase substantially private regional investment and stem the present high tide of capital flow from the Hemisphere.

- 9 -

3. The United States government should encourage and United States business should support the Atlantic Community Development Group for Latin America (ADELA) and the multi-national private investment company which is presently being organized to implement the ADELA program. This organization promises to channel private investment from North America, Europe and Japan into medium and small business in Latin America. The value of this approach is not only in its provision of a channel for increasing private investment through decreasing risk but also in its emphasis upon cooperative ventures with Latin entrepreneurs who will benefit from association with more experienced administrators. ADELA has the potential for making a fundamental contribution to the preservation and growth of free enterprise in Latin America.

4. One of the difficulties of encouraging private U.S. investment in Latin America is the risk of potential confiscation. In order to increase U.S. private investment in Latin America the United States should establish through law that an automatic repayment tax would apply on all imports from a country which had confiscated property owned wholly or in part by U.S. investors. The tax would be collected until full payment had been secured for the property confiscated. The policy should be universally and uniformly applicable in relation to all property and all countries. The United States should seek multilateral agreement in the Hemisphere to this policy and to the establishment of joint commissions with impartial chairmen to assess the value of the properties seized. It should be made clear to all that the purpose and effect of this policy would be the increase of U.S. private investment in Latin America.

- 10 -

5. The United States should actively encourage and, if need be, help finance "people-to-people" programs designed to meet specific development needs. By encouraging cooperative ventures on the private level, the governments of the Hemisphere will be building good will among our peoples, helping their own development needs and stimulating the growth of private initiative and enterprise.

For example:

- Sound plans for industrial and agricultural education prepared by private industrial, agricultural or education groups from the United States and their Latin counterparts should be actively supported by the United States and by the local governments.

- The United States should encourage its institutions of learning to cooperate actively with their sister institutions throughout the Hemisphere in constructing more modern curriculums to challenge Latin American youth to produce up to their potential.

- Organized labor in the United States should be positively encouraged to expand vigorously its programs of cooperation with labor groups throughout Latin America, particularly in the knowledge of organization techniques and in building programs for housing, schools and hospitals. (If for no other reason the desirability of the involvement of U.S. labor in these international programs is important because it can offer effective competition to Communist agents who consider the systematic organization of workers' groups the most productive road to political power.)

In the field of foreign trade also there are absolute prerequisites if the Latin countries are going to achieve any measure of development. Price stability is required for growth particularly in

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economies dominated by single products. The growth of the European Common Market threatens economic growth in Latin America. And closer trade relationships are mandatory among the nations of the Western Hemisphere. I make the following proposals:

1. The United States with its Latin neighbors must seek to stabilize prices in the basic products of the Latin American economies. The negotiation of international commodity price stabilization agreements is a prerequisite to the establishment of a stable economy in each country in the Hemisphere.

2. The United States must take the lead during the coming "Kennedy Round" of tariff negotiations with the European Common Market to facilitate entry for Latin American products into Europe. One of the great dangers of the economic regionalism of our times, which on balance is a great advance, is the tendency to be more exclusive as a regional trade grouping than as individual states. The future of the Latin economy would suffer severely if the European Common Market were to establish rigorous preferential tariffs against it.

3. The countries of Latin America should seriously consider, with United States encouragement, the formation of a genuine Latin American Common Market which would include all the countries of the present Latin American Free Trade Association (LAFTA), the five-nation Central American Common Market (ACM) as a single unit, plus Venezuela, Bolivia, Panama and some of the Caribbean nations. The construction of a Latin Common Market would recognize two facts: the enormous progress made by LAFTA and ACM in just a short period of time; and the necessity of a broader trade grouping to meet vital needs. For example, LAFTA must be made broader if it is to create an adequate internal and external transportation system for its trade and if its foreign trade is to receive adequate financing.

- 12 -

Similarly, the Central American Common Market must be integrated into a broader structure if it is to overcome its problems arising from its members' dependence on primary commodities for the bulk of their export exchange.

4. United States policy could be an effective catalyst in the creation of a Latin American Common Market by granting the Central American Common Market and the Latin American Free Trade Area scheduled unilateral reductions of U.S. tariffs on simple and semi-manufactures imported from Latin America. These U.S. tariff reductions would be scheduled to correspond with the integration schedule toward a Latin American Common Market.

5. If a Latin American Common Market becomes a reality, all the nations of the Hemisphere, including the United States, might find it desirable to form a Western Hemisphere Free Trade Area which is limited originally to raw materials. The goal might be for the U.S., Canada, and the Latin American Common Market to phase out all trade restrictions on raw materials over a ten-year period. After the Latin nations grow competitive in manufactured products, the Western Hemisphere Free Trade Area could expand to include such items.

## Democracy in the Western Hemisphere

Yet none of these measures are enough by themselves. What is at stake beyond economic progress are basic values of freedom. There are many who argue that his misstates the problem, that economic development automatically produces democracy. Or else it is said that all we should care for is stability and economic progress regardless of the government which brings it about.

This would be a counsel of despair for two important reasons:

Despite all the wishful thinking of the new materialism, there is no inherent connection between material well-being and democratic values. Those who say that the developing countries will naturally

- 13 -

become democratic as soon as their people are no longer hungry, are deluding themselves. Industrialization is no more the automatic precursor of democracy than are fat Communist inherently peaceful Communists. Imperial Japan was the most industrialized nation in Asia; Hitler's Germany the most industrialized on the European continent; the historical fact is the opposite: In each of the great Western democracies, the process of industrialization was preceded by the acceptance of democratic values. The process of industrialization, to be sure, strengthened those values, but they were there to be strengthened. If these values are not there to begin with, industrialization may merely refine the tools of tyranny.

Second, I believe we greatly underestimate human nature if we believe that all the people of Latin American want is greater material comfort. We must not be so naive as to think that the appeal of Communism is merely "something for nothing." On the contrary, it is the appeal of a system that is modern and efficient and definite -- it offers philosophical answers and "truth" -- if offers answers.

We cannot fight this by offering more of the good things of life alone. The people want these, but they want much more and the issue of our times is whether we can give it to them.

In his recent provocative speech, Senator Fulbright suggested that this country should think of the struggle with Communism in empirical rather than moral terms. But I prefer to think that it is not the mechanization or affluence of our society that inspire others. Rather it is the values of human dignity which we affirm.

We should not be embarrassed to affirm that Democracy can be the wave of the future:

- If we make it a more real idea in our own land;

- If we show to all visitors from abroad a faith which can sustain them in their own lands;

- If we measure its value in spiritual and not in material terms;

- If it spurs us to the imagination and initiative and industry that it gave our forefathers.

Draft (Kissinger)

April 14, 1964

A WESTERN HEMISPHERE AGENDA

This award means a great deal to me for many reasons. Because it has been given to so many distinguished friends of Latin America, I shall cherish it particularly. Western Hemisphere relations have always been close to my heart. I am grateful to you for giving me cause to think of my many friendships in Latin America -- friendships which have grown throughout these thirty long years.

I have been deeply involved in Western Hemisphere affairs ever since my appointment as Coordinator of Latin American affairs in 1940. I have witnessed the development of confidence and mutual respect during the war. I observed the hopes held for a dynamic and expanding Western Hemisphere system growing out of the Act of Chapultepec and the Treaty of Rio de Janerio. There was a strong commitment then throughout the Western Hemisphere and a concept of equal partnership; the principle of non-intervention in each other's affairs; and mutual pledges of joint action to resist attacks on any member from outside the Hemisphere. In this spirit, the Latin American countries gave decisive support to the United States to include in the United Nations Charter provisions for regional peace-keeping machinery provisions that have been the basis of the treaties on which the free world structure is based.

Since then I have watched with dismay how the atmosphere of confidence and good-will has been dissipated. For a decade and a half Latin America received scant attention from U.S. policymakers except when crisis situations threatened U.S. interests or when the vote of our neighbors to the South was needed in the United Nations. The United States took its neighbors for granted while focussing attention just in Europe, then in Asia and Africa.

President Kubitschek of Brazil voiced Latin American aspiration and concerns in his proposal for Operation Pan America in 1958. President Eisenhower responded in 1960 by negotiating

in 1938. President Roosevelt rehoused in 1930 by negotiating
agitation and concerns in the proposal for Operation Plan America
President Kruschev's. He also voiced Latin American
while focusing attention just in Europe, then in Asia and Africa.

United Nations. The United States took its neighbors for granted
when the vote of our neighbors to the south was needed in the
makers except when crude situations threatened U.S. interests or
and a half Latin America received scant attention from U.S. policy.

Since then I have watched with dismay how the atmosphere
pales of the treaties on which the free world structure is based.
regional peace-keeping machinery bristles that have been the
States to include in the United Nations Charter provisions for
the Latin American countries gave declarative support to the United
attacks on any member from outside the Hemisphere. In this spirit,
each other's affairs; and mutual pledges of joint action to resist
concept of equal partnership; the principle of non-intervention in
a strong commitment then throughout the Western Hemisphere and a
strong commitment to the Western Hemisphere system growing out of
the Act of Chapultepec and the Treaty of Rio de Janeiro. There was
a dynamic and expanding Western Hemisphere system growing out of
and mutual respect during the war. I observed the hopes held for
affairs in 1940. I have witnessed the development of confidence
ever since my appointment as Coordinator of Latin American

I have been deeply involved in Western Hemisphere affairs
for thirty long years.

in Latin America -- friendships which have grown throughout these
grateful to you for giving me cause to think of my many friends
Hemisphere relations have always been close to my heart. I am
Latin America, I shall continue it particularly. Western
Because it has been given to so many distinguished friends of
This award means a great deal to me for many reasons.

A WESTERN HEMISPHERE AGENCY

April 14, 1944
Draft (Kraefter)

the Act of Bogota, outlining a broad program for a multilateral
effort to forward economic growth and social progress in Latin
America.

This commitment found its expression in the program of the
current Administration which goes by the name of Alliance for
Progress. Its conception was noble. But its execution has been
disappointing because the Administration has failed to consider
that dignity and self-respect of equal partners are the pre-
conditions to truly cooperative efforts.

The Administration announced a major <u>collaborative</u> effort
in ringing terms of extravagant promise. But instead of colla-
borating with our Latin American partners in defining common
objectives and programs, we presented them with a made-in-USA
list of "reforms" to which they were expected to conform without
giving them an adequate opportunity to judge their applicability
or to develop a truly multilateral response. We left the channel-
ing of requests to a multiplicity of largely uncoordinated U.S.
agencies, each operating under its own criteria and each applying
its own supervision.

The result was an almost complete failure to communicate
any sense of a truly joint effort. Much of the friction in the
Alliance for Progress is due to the fact that the goals for the
program have been set <u>for</u> our allies rather than <u>with</u> them.

Added to this flaw in our Latin American approaches is the
burden of loss of respect for our force and our will that was
generated by our gross mishandling of the Bay of Pigs crisis, by
the continued existence of a base in Cuba even after the missile
crisis of 1962, and by the singularly ungenerous and unconfident
semantic quibbling that was our response to the Panama Canal
incident.

Unless we radically revise our approaches, Western
Hemisphere ties are likely to continue to weaken in the years ahead.

This would be a grave tragedy, for the Western Hemisphere
was once the symbolic hope of the world.

was once the symbolic core of the world.

This would be a grave tragedy, for the Western Hemispheres
Hemispheres these are likely to continue to weaken in the years ahead.
Unless we radically revise our approaches, Western
Incident,

semantic dropping that was our response to the Panama Canal
critics of 1967, and by the singularly ungenerous and unconfident
the continued existence of a peace in Cuba even after the missile
generated by our gross mismanagement of the Bay of Pigs crisis, pa-
keness of loss of respect for our force and our will that was

Added to this flaw in our Latin American approach is the
program have been set for our allies rather than with them,

Alliance for Progress is due to the fact that the move for the
any sense of a truly joint effort. Much of the friction in the
The result was an almost complete failure to communicate
its own argumentation.

agencies, each operating under its own criteria and each applying
ing of redents to a multiplicity of largely uncoordinated U.S.
or to develop a truly multilateral rationale. We left the chamber-
giving them an adequate opportunity to judge their applicability
flat of "reforms" to which they were expected to conform without
objectives and programs, we presented them with a made-in-URB
porating with our Latin American partners in defining common
in ringing terms of extragovernmental. But instead of colla-

The Administration announced a major collaborative effort
conditions to truly cooperative efforts.

that gravity and self-repect of equal partners are the pre-
disappointing because the Administration has failed to consider
Progress. Its conception was noble. But its execution has been
current Administration which goes by the name of Alliance for

This commitment found its expression in the program of the
Americas.

effort to forward economic growth and social progress in Latin
the Act of Bogota, outlining a broad program for a multilateral

- 5 -

It can and must play that role again. For the world is
in a state of transition. One system of international order has
broken down and a new one has not yet emerged. The dominant fact
of our time is that no nation -- however large -- can exist in
isolation.

This is why the future of Western Hemisphere relations is
so crucial. In this hemisphere there have grown up societies
dedicated to national freedom. They have a common dream of cooper-
ative effort first enunciated by Simon Bolivar in 1826. Though
the average per capita income of Latin America is only one-sixth
of that of the United States it is by far the highest of the less
industrialized areas of the world. For the area as a whole the
goal of self-sustaining economic growth is in sight.

This goal can be reached only through long-term cooperation
in the fields of public health, nutrition and food supply,
education, transportation and economic development.

Above all, it requires a vision of the future. Throughout
history, each great achievement was a vision before it became a
reality. It was a dream of some before it became a fact for all.

The free world today suffers from an obsession with
dealing with current crises. In concentrating on the symptoms,
it magnifies the causes.

This is why a successful and dynamic Western Hemisphere
system could inspire peoples all over the world. It could
demonstrate the vitality of freedom as a catalyst in the fight
on disease, poverty and ignorance.

But the challenge then is not simply to encourage a
particular rate of economic growth. It is also to promote societies
dedicated to the dignity of man. Democracy and tyranny, whether
of the left or the right, cannot jointly build a true community,

In this spirit I want to address myself to a Western
Hemisphere agenda of ______ specific proposals.

Hemisphere tends of ______ specific proposals.

In this spirit I want to address myself to a Western
of the left or the right, cannot jointly build a true community,
dedicated to the dignity of man. Democracy and tyranny, whether
particular rate of economic growth. It is also to promote society
But the challenge then is not simply to encourage a
ougrace, poverty, and ignorance.

Demonstrate the vitality of freedom as a catalyst in the fight
system could enable peoples all over the world. It could

This is why a successful and dynamic Western Hemisphere
it magnifies the causes.

Dealing with current crises. In concentrating on the syndrome,
The free world today sunder from an operation with
reality. It was a dream of some before it became a fact for all.

Above all, it requires a vision of the future. Throughout
education, transportation and economic development.

In the fields of public health, nutrition and food supply,

This goal can be realized only through long-term cooperation
of self-sustaining economic growth in all areas.

Industrialized areas of the world. For the area as a whole the
of that of the United States it is by far the highest of the few
the average per capita income of Latin America is only one-sixth
aristocratic that enumerated by Simon Bolivar in 1860. Through
 dedicated to national freedom. They have a common dream of cooper-
so crucial. In this a hemisphere there have grown up societies

This is why the future of Western Hemisphere relations is
isolated.

of our time is that no nation -- however large -- can exist in
broken down and a new one has not yet emerged. The dominant fact
in a state of transition. One system of international order has
It can and must play that role again. For the world is

## Regional Groupings

One of the prime goals of a Western Hemisphere system should be the creation of institutions which give expression to the interdependence of the nations of the Western Hemisphere. Just as the European Recovery Program promoted European integration, so Western Hemisphere programs should be designed to foster cohesion of the inter-American system.

These institutions should not be designed on any doctrinaire basis. Some could include the entire Western Hemisphere; others could embrace more limited areas uniting the countries and functions primarily concerned. But all of them will derive their vitality from the commitment to them of _all_ participants. It is the essence of partnership for each nation to be free to advance proposals but also to be free from the imposition of solutions on reluctant neighbors.

The following areas seem to me worthy of particular attention:

1. The nations of the Western Hemisphere should create a popular Assembly on the model of the Assembly of the Western European Union. It should be composed of members of parliaments from all OAS countries and Canada should it wish to participate. The purpose of such an Assembly should be to discuss problems of common concern. In particular it could be a forum for the discussion of the goals of the Alliance for Progress. Though the views of such an Assembly would be advisory only, the reputation of its members could give it a powerful voice in the creation of a unified Western Hemisphere. Positive proposals for joint action coming from the Assembly would serve as the agenda for more formal consideration by official governmental agencies.

2. In the same spirit, the United States should en-dorse Latin proposals for a Latin American Common Market, lead-ing eventually to a Western Hemisphere Free Trade Area includ-ing the United States and Canada.

- 5 -

Any form of progress brings with it the need for adjustment. Thus economic regionalism in Europe presents a direct challenge to Latin American trade in Europe. The United States should, of course, take the lead during the coming "Kennedy Round" of tariff negotiations with the European Common Market to facilitate entry for Latin American products of the Latin American economies. But beyond this, we can hope that the meaning of the economic success of regional association for Europe will not be lost in our own Hemisphere.

3. The United States should be prepared to strike an economic accord with a Latin American Common Market which might include, for example, the present Latin American Free Trade Area (LAFTA) and the Central American Common Market (CACM), as well as the other Latin States. U.S. receptivity to such a development could be demonstrated by a willingness to grant unilateral reductions in U.S. tariffs on simple and sem-manufactures imported from Latin America, scheduled to correspond to the integration calendar of the Latin American Common Market.

4. If a Latin American Common Market were to become a reality, the gradual construction of a Western Hemisphere Free Trade Area seems beneficial. Under such circumstances the United States (and hopefully Canada) should offer to phase out all trade restrictions on raw materials over a ten-year period. In exchange for these concessions the Latin American Common Market might be asked to agree in advance to expanding the Free Trade Area to include manufactured products at the end of ten years -- or at a pre-determined date which is consistent with the expected rise in the ability of Latin American products to compete effectively. The experience of the European Common Market should have taught us that the time to shape these institutions is early when our influence is still relatively great.

5. As various forms of regionalism develop in the Western Hemisphere, the OAS could be recast to take account of it. Thus

DRAFT

April 16, 1964

# LATIN AMERICA SPEECH

## I. A NEW DEDICATION TO THE WESTERN HEMISPHERE.

I have been deeply involved in Western Hemisphere affairs ever since my appointment as Coordinator of Inter-American Affairs in 1940. During the war I was proud to have a part in the development of mutual respect and confidence. I shared the hopes for a dynamic and expanding Western Hemisphere system and watched them grow into the Act of Chapultepec and the Treaty of Rio de Janeiro.

There was a strong commitment then throughout the Western Hemisphere. There was a concept of equal partnership: The principle of non-intervention in each other's affairs was generally recognized. Mutual pledges of joint action to resist attacks on any member from outside the Hemisphere were made. In this spirit, the Latin American countries gave decisive support to the United States to include in the United Nations Charter provisions for regional peace-keeping machinery -- provisions that have been the basis of the treaties on which the free world structure is based.

- 2 -

scant attention from U.S. policymakers except when crisis situations threatened U.S. interests or when the vote of our neighbors to the South was needed in the United Nations. The United States took its neighbors for granted while focussing attention on Europe, on Asia and Africa. When we finally took account of Latin American concerns, we advanced a program -- the Alliance for Progress -- in so unilateral a manner that it destroyed any prospects for real partnership.

This is a tragedy. For this Hemisphere has with reason been called the New World.

It was new, of course, in the sense of geographic discovery. But what inspired men everywhere was the vision of a world where free men could make a new start and realize the best that was within them. Impelled by the age-old dreams of human dignity, men from different cultures and of diverse beliefs crossed an ocean to conquer a wilderness. Many came for material gain. But who would underrate the religious conviction that propelled so many millions into the unknown: the faith that gave the strength to bear privations as long as the spirit was free.

However different the cultural and philosophical origins of North and South America, there existed a common devotion to the concept of human dignity and a common tradition of the brotherhood of man. Whatever his status in the Old World, in the New World man was an end and not a means.

The New World was once the hope of mankind.

It can and must be again.

It was no accident that in the New World the convictions about the nature of man would be carried over into the international sphere as well. Democratic

- 3 -

societies forge unity from a respect for diversity. In the same spirit, far-sighted men north and south of the Rio Grande have envisioned a Western Hemisphere structure, all the more vital for respecting the dignity of its members.

The earliest and perhaps noblest dream was proclaimed by Simon Bolivar nearly a century and a half ago. His was a vision of free democracies united in a Western Hemisphere Confederation. This body, which was to be open to all peoples who shared a common faith in freedom, was to present "America to the world in an aspect of majesty and grandeur unexampled among nations of antiquity."

Simon Bolivar correctly foresaw the central fact of our time. No nation -- not even the largest -- can realize the hopes of its people in isolation. But no structure can be vital if it is not based on the free consent and the active participation of its members. Ancient Greece foundered in this dilemma. Modern Europe nearly tore itself assunder before it understood the need for common effort.

And we, in the Western Hemisphere, have also failed to fulfill the vision of Bolivar.

It would be painful to review in detail the errors of policy and judgment and insight which have characterized Inter-American relations. There have been many attempts to devise particular structures. But the missing ingredient has been a lack of conviction and dedication to the idea of truly equal partnership. Certainly, when crises were upon us, we have generally rallied to the cause. But the test of devotion is the ability to show foresight and generosity when the times seem calm. And that test most of our nations, certainly my own, have failed.

- 4 -

But we are not here to bemoan the past. We are still masters of our future.

When Bolivar spoke, the need for his vision was real but not obvious.

Today, it is both real and obvious. The need for unity is economic, military, political and moral.

- The inter-dependence in trade between members of the Hemisphere is increasing at an astounding rate. When I became U.S. Coordinator of Inter-American Affairs in 1940, the inter-Hemisphere trade totaled $700 millions. Last year it was $7 billions, or an increase of one thousand per cent.

- The demands of modern development also imply a new relationship among nations of the Hemisphere. This requires human, natural and capital resources which can to some degree be quantitatively determined. But the process of development depends above all, on the capacity to put resources to work productively. Innovation is the vital quality -- the motor power -- of any society.

If enough individuals can be stimulated to act on their own, and to mobilize their own and their neighbors' resources, the entire society will begin to move. When societies interact, the range of innovation multiplies geometrically. It is not the size of investment but the spirit animating it which is ultimately decisive. And individual, uncoordinated efforts will dissipate energies and flaw the vision.

- The need for common defense is even greater today than it was in Bolivar's time or even at the signing of the Act of Chapultepec. In

- 5 -

the nuclear age, freedom is indeed indivisible.

-- The growth of regional associations in Europe creates an imperative demand for a similar pattern in our own Hemisphere. In a world organizing itself increasingly on regional lines, the Western Hemisphere cannot compete or even survive on a purely national basis. And just as European political unity emerged from a deliberate strategy of fostering economic and functional cooperation, so the cohesion of the Western Hemisphere should grow out of even closer collaborative efforts to meet the needs of our peoples.

The ultimate challenge transcends practical considerations. The free world today suffers from an obsession with current crises with which it deals on an *ad hoc* basis and within a national framework. In concentrating on the symptoms, the free peoples magnify the causes.

The free world today requires above all a vision of the future. Through-out history each great achievement was a vision before it became a reality. It was a dream of some before it became a fact for all.

This is what the nations of the Western Hemisphere could do if they dedicate themselves to creating again the dream of a New World.

I call on them for just such an act of faith.

## II. THE NEW ATTITUDE.

It would be tempting to outline a program embodied in a specific number of proposals. And I will later on indeed refer to some areas of policy which seem to me to require particular attention.

However, such an approach would miss the essential point.

The need in our Western Hemisphere policy is not for a change of specific programs but for a change in attitude. We require more vision; not more expedients.

I have criticized this Administration for a lack of objectives. I have questioned the adequacy of its concepts for translating objectives into policy. Inevitably, therefore, I consider its programs random and haphazard.

Nowhere is this more true than in the Administration's Western Hemisphere policy.

I have stated what our objective should be: the revitalization of the New World by a true Western Hemisphere partnership.

It should be based on the respect for individuals and nations growing out of the Judeo-Christian concept of the dignity and brotherhood of man.

U.S. programs, therefore, require a new spirit based on the following:

Foremost must be a new approach to the whole concept of consultation. In all of our Alliances, consultation too often takes the form of elaborating an American blueprint. Yet no self-respecting ally will feel responsibility for programs that have not been made his own through active participation.

This has been the major difficulty with the Alliance for Progress.

The Alliance for Progress was announced by the Administration in ringing terms of extravagant promise. But instead of collaborating with our Latin American partners in defining common objectives and programs, we presented them

- 6 -

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with a made-in-USA list of "reforms" to which they were expected to conform without giving them an adequate opportunity to judge their applicability or to develop a truly multilateral response. We left the channeling of requests to a multiplicity of largely uncoordinated U.S. agencies, each operating under its own criteria and each applying its own supervision.

A second requirement is for foresight. The nations of the Western Hemisphere should work together to set common goals and to anticipate common problems. Those who do not master events become their prisoner.

Today, the OAS is not an effective instrument for long-range planning. It has not organized itself to meet the pressing social and economic needs of this Hemisphere. Its political discussions are usually stimulated by some crisis.

A final prerequisite for effective cooperative effort is a conscious and deliberate attempt to build mutual confidence. A patronizing attitude breeds irresponsibility. Respect is an intangible quality but it is quickly sensed by proud people. Building confidence requires that partners have an opportunity to express their views before we act on matters which concern them. It makes it essential that we try to see the other point of view. Above all it presupposes consistency and predictability in our actions.

Our relations with Panama can serve as an example of how not to build confidence. A popular United States Ambassador left in frustration at the lack

of response of the State Department. His post then went unfilled for six months. When the riots occurred, no U.S. Ambassador was on the spot. We then engaged in months of undignified and unseemly semantic squabbling with Panama and an OAS committee. On two occasions the White House countermanded commitments the State Department had already formally made.

I know there is a better way to deal with such issues.

I am convinced that an effective Western Hemisphere policy would prevent them.

In short, if we want to construct a New World, we should have a vision and methods that bring out the best in our partners.

It is in this spirit that I want to address myself to fifteen measures that would begin to take us along this road.

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### III. A WESTERN HEMISPHERE AGENDA

#### A. Regional Groupings

Institutions by themselves cannot create an attitude. Even less can they be a substitute for it.

They can, however, give symbolic expression to common aspirations. And they can create a framework -- sometimes even supply an impetus -- for collaborative efforts.

This is why I favor the encouragement of institutions which give expression to the interdependence of nations in the Western Hemisphere.

1. The nations of the Western Hemisphere could create under the Organization of American States a popular Assembly on the model of the Assembly of the Western European Union. It should be composed of members of parliaments from all OAS countries and Canada should it wish to participate. The purpose of such an Assembly should be to discuss any problems of common concern and to recommend action. Positive proposals for joint action coming from the Assembly would serve as the agenda for more formal consideration by official governmental agencies. Though the views of such an Assembly would be advisory only, the reputation of its members could give it a

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2. The Foreign Ministers of the Organization of American States should meet annually with a formal agenda and study papers proposed by the OAS and national staffs. At the present time this group meets generally only under crisis conditions.

3. As various forms of regionalism develop in the Western Hemisphere, the OAS could be recast to take account of it. Thus particular groupings such as the Central American Common Market might be given institutional recognition.

4. The United States should lend full encouragement and all practicable assistance to the two regional economic accords that have been established to eliminate barriers to trade between Latin American countries and provide greater market scope for industrial development.

The success of the Latin America Free Trade Area and the Central American Common Market arrangements can make a substantial contribution to economic progress and the fostering of sound economic practice in their own orbits. In the long run their success might make it easier to work toward the goal of building toward an economic accord for the Western Hemisphere as a whole.

As the economies of Latin America grow, the nations of the Hemisphere ought to negotiate a comprehensive trade accord. The United States should endorse either the form of a Western Hemisphere Common Market or a Hemisphere Free Trade Area in which we associate with a Latin

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American Common Market. To make a Western Hemisphere trade asso-
ciation attractive to the countries of Latin America, the United
States should establish a more generous time table for progressive
reductions in its tariffs than it asks from them in return.

5. The United States should make every effort to induce Canada to join in these economic accords as well as to join the OAS and the other existing and future Inter-American programs.

6. With United States financial aid, if necessary, the nations of the Hemisphere could beneficially pursue the development of regional educational institutions on the model of the University of the Andes. For example, a regional university for Central America and a Latin American Technical Institute suggest themselves.

7. A regional grouping which has always commended itself to me is an East Andean Development Program. The seven governments of the region of the Eastern slope of the Andes Mountains and the United States should establish a public East Andean Development Corporation for the purpose of regional development of the area. The tasks of the Corporation would be the clearing of the fertile East Andean plateau, the creation of avenues of transportation for agricultural products from the plateau to the coastal population and ports, and the relocation of native population groups to the region. Such a joint effort could well serve as a "pilot project" for regional development in the Hemisphere.

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B. Development Planning and Trade

The current approach to Latin American development is inadequate. Because of its unilateral character, the Alliance for Progress is regarded throughout Latin America as another Yankee program, with made-in-the-United States planning, procedures, goals, and reform prescriptions formulated in general terms that often are not applicable to widely varied national situations.

The U.S. has produced this self-defeating unilateralism by handling all applications, negotiations and supervision arrangements through a multiplicity of more or less uncoordinated U.S. agencies on the same nation-to-nation basis that existed before the Alliance was formed.

The unilateral conception of the Alliance for Progress and the resulting lack of Latin American enthusiasm has been reflected in inappropriate organization.

Even if the Alliance had been jointly formulated, enthusiastically received and properly organized, however, its objective would be in jeopardy because of the severe fluctuations in world prices for the raw material exports which form the largest portion of the Latin American economy.

The following programs seem in order:

8. The United States should call an Inter-American Conference to develop a coherent program and organization for economic and social development in Latin America. The purpose of the Conference would be to lay the foundation for a constructive development program which has the enthusiastic support of those who are seeking development.

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While past or present programs should not be abandoned without careful consideration, neither should their existence be a deterrent to real progress.

The United States should, of course, be an active participant in the Conference, should comment freely on all proposals, and should not be reticent in making its own proposals. But it must recognize that no development program can succeed unless it is regarded by the participants as their own.

9. Pending such an Inter-American Development Conference, much could be done to improve the existing machinery and approach of the Alliance for Progress.

a. The central international committee, CIAP, should be placed under the Organization of American States, in order to give it more formal recognition, and in order to expand the functions of the OAS to include areas contemplated at its origin.

b. CIAP should be afforded major responsibilities in defining the content of programs, sifting requests, and supervising and appraising performance at all levels.

c. CIAP should be encouraged in the outlining of programs that would pool efforts among the several Latin American Republics. They might include: nutrition and health programs; the revitalization of foreign private investment through agreed-upon ground rules and appropriate guarantee provisions jointly supported; the

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promotion of the newly organized Executive Service Corps to
furnish professionally experienced assistance to newly formed
business and industry.

10. The role of private investment in development should be adequately recognized. Through the years the U.S. attitude toward economic development has alternated between exclusive stress on government investment and exclusive stress on private investment. In so doing the fundamental point has been obscured. An effective government is necessary to provide the basic conditions of development, including private investment. But the healthy participation of the private sector in development -- the initiative and vitality of free enterprise -- is also essential. Specifically more emphasis should be placed on building institutions for the mobilization of local capital for constructive development investment. Measures which should be encouraged are:

- Mutual funds to encourage the flow of savings into ownership of local enterprise.

11. While exploring the possibilities of a Hemisphere-wide economic accord, as outlined earlier, the United States should show a more sympathetic concern for finding effective means to improve the trading prospects of Latin America. A continuing lag in this field can more

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[c]

than discount any benefit that can flow from even the most ambitious
foreign aid program.

a. The United States should throw its full bargaining power against the proposals of the European Common Market to establish preferential trading relationships with "Associated Overseas States" that are not an organic part of the EEC. If such preferences are to be extended, they should be jointly extended by <u>all</u> major Developed Area markets to the trade of <u>all</u> Developing Area markets to avoid a further partitioning of world trade into neo-Colonial compartments.

b. In the current sessions of the United Nations Trade and Development Conference and in the GATT sessions scheduled for May, the United States should support Latin America demands for remedies to trade disadvantages which result from a high dependence on primary product exports and which are inherent in the present organization of the world market.

C. <u>Reorganization of the U.S. Government</u>

If this nation is going to implement a vision of a Hemisphere of nations working together for their common good, the United States Government must be organized adequately for the task.

Two specific reorganization steps are required at the federal level:

12. All programs related to the development of a United Hemisphere should be concentrated in an independent agency organized for the specific

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purpose of serving the future of the Western Hemisphere. At the moment, the aid program, the information program, and the trade relations are each handled by separate, inadequately coordinated offices. Programs for Latin America should have as a focus a central organization concerned with Latin America and dealing with all operating programs on a regional basis. This office should also be charged with assisting private institutions, industry, and labor for joint efforts with their counterparts in Latin America.

13. A new post of Undersecretary of State for Inter-American Affairs should be created to mark the special importance of this hemisphere relationship and to bring into focus at top policy level our relations with the nations of the hemisphere.

### D. Special Projects

The future of our Hemisphere, its development and its defense are inevitably linked with the growth of science and technology. Science must be put in the service of truly joint Western Hemisphere efforts. We must anticipate the demands and the opportunities which the technological revolution presents to all our peoples.

14. The United States should push the construction of a new sea-level canal to replace the present Panama Canal, which is rapidly becoming unable to serve the needs of the Hemisphere. It is not only unable to accommodate some of the most modern naval vessels, but the volume of traffic soon may be greater than it can carry.