Room 5600
30 Rockefeller Plaza

March 28 1963

To: Mr. Henry Kissinger

From: BERENT FRIELE

As per our telephone conversation, believe you will find the attached observations by Ole-Jacob Hoff most interesting.

30 Rockefeller Plaza

New York 20, N.Y.

Room 5600

March 29, 1963

Dear Henry:

As reported to you over the telephone, I received yesterday a telegram from Janio Quadros accepting the invitation from Harvard University to give a series of lectures during the month of October. Attached is copy of the original telegram with a translation. You will note that Dr. Janio would appreciate receiving as soon as possible further details. May I suggest that you write him confirming this invitation. His address is Rua Rio Grande 812, São Paulo, Brazil. Insofar as transportation by ship is concerned, I am sure it can be arranged with Moore-McCormack or some other steamship line.

Thanking you for your interest in this matter and looking forward to seeing you at the French Consul General's dinner tomorrow,

Mr. Henry Kissinger
6 Divinity Avenue
Cambridge, Mass.

1260

WESTERN UNION
INTERNATIONAL COMMUNICATIONS

W. P. MARSHALL, PRESIDENT

CMNG CTF SIG

Received VIA WESTERN UNION CABLES New York, N. Y. Telephone Hanover 2-2920

TUNL189/E268 SAOPAULO 62 27 1945 VIAWU 1/50 =
LT BERENT FREELE IBASECON

NEWYORK =

*IBASECON*

INTERNATIONAL BASIC ECONOMY CORPM
30 ROCKEFELLER PLAZA ROOM 5400

AGRADE CE NDO SE U REN OVADO EMPENHO SENTIDO PROPORCIONAR
ME OPORTUNIDADE EXPOR MEU PENSAMENTO SOBRE POLITICA
EXTERIOR CONTINENTAL PERANTE AUDITORIOS AMERICANOS
VG INFORMO ACEITAR CONVITE EMINENTE UNIVERSIDADE
HARVARD PT DE ACORDO VIAJAR OUTUBRO ACOMPANHADO MINHA
MULHER VIA MARITIMA PT QUEIRA NOTAR FALAREI EM INGLES
PT ROGO PREZADO AMIGO =

: TRANSMITIR ME LOGO POSSIVEL DEMais DETALHES PT CORDIAIS

: SAUDACOES PT JANIO QUADROS ..

TRANSLATION

São Paulo March 27, 1963

THANKING YOU FOR YOUR RENEWED EFFORT TO PROVIDE ME
WITH AN OPPORTUNITY TO PRESENT MY THOUGHTS ON
CONTINENTAL FOREIGN POLICY BEFORE AMERICAN AUDIENCES
I INFORM YOU THAT I ACCEPT THE INVITATION FROM THE
EMINENT UNIVERSITY OF HARVARD STOP I AGREE TO
TRAVEL IN OCTOBER ACCOMPANIED BY MY WIFE BY SHIP
PLEASE NOTE THAT I WILL SPEAK IN ENGLISH STOP
I BEG YOU, MY GOOD FRIEND, TO SEND ME AS SOON AS
POSSIBLE MORE DETAILS

JANIO QUADROS

30 Rockefeller Plaza

New York 20, N.Y.

Room 5600

April 5, 1963

Dear Henry:

Thank you for your note dated April 1 with your most interesting article, which I shall read carefully over the weekend.

May I remind you of writing to Janio Quadros confirming the invitation and giving him as much information as you can with regard to the lectures. You can always send him more details later.

Insofar as transportation for him and Mrs. Quadros is concerned, you may say that arrangements will be made probably with Moore-McCormack Lines. I have not yet been able to discuss this with the officials of the Lines but am convinced that somehow or other I will get the passages free of charge.

Berent Friele

Dr. Henry Kissinger
6 Divinity Avenue
Cambridge, Mass.

WESTERN UNION

TELEGRAM

W. P. MARSHALL, PRESIDENT

SF-1201 (4-60)

The filing time shown in the date line on domestic telegrams is LOCAL TIME at point of origin. Time of receipt is LOCAL TIME at point of destination

847P EST APR 03 63 BA367

B CDU831 WUE663 SP324 58 PD INTL CD SAOPAULO VIA RCA 3 1705

LT MR HENRY KISSINGER

HARVARD UNIVERSITY BSN

ACCEPTING WITH GREAT SATISFACTION INVITATION HARVARD UNI-

VERSITY FOR LECTURES ON BRAZILIAN FOREIGN POLICY AND CONTINENTAL

PROBLEMS BEFORE AMERICAN AUDIENCE STOP THANKING FOR VOYAGE

FACILITIES OFFERED SHALL BE ACCOMPANIED BY WIFE SUGG-

ESTING OCTOBER HIS YEAR FOR LECTURES WHICH WILL BE UTTERED

IN ENGLISH CORDIAL GREETINGS

JANIO QUADROS ADDRESS VIADUTO 9 JULHO 164 SAOPUTO

(53).

LE MINISTRE PLÉNIPOTENTIAIRE
CONSUL GÉNÉRAL DE FRANCE
A NEW-YORK
sb

April 4, 1963

Cher ami,

As I have told you on the phone, Mr. Berard-Quelin, Editor-in-Chief of "Societe Generale de Presse", is now touring the States to collect chiefly background information about the political situation in this country. He would be very much interested to meet someone from the political team of Governor Rockefeller and be able to ask a few questions.

If you could arrange such a meeting either on the 29th of April or the 1st of May when Berard-Quelin will be back in New York, I would greatly appreciate it. I add that Berard-Quelin is a man worth knowing and that he is one of the best informed man in journalism in Paris.

Berard-Quelin is staying at the Carlyle where you can drop him a line to let him know when and where his appointment will take place.

Merci d'avance

Mr. Barent Friele
30 Rockefeller Plaza-Room 5600
New York 20 N.Y.

AN ENGLISH REPRINT FROM
THE NOWEGIAN WEEKLY

FARMAND
GRUNNLAGT 1891 22

PUBLISHER AND EDITOR:

TRYGVE J. B. HOFF, PH. D.

OSLO · NORWAY

"THE FARING MAN"

This article ap-
peared in "Farmand"
weekly, Oslo, issue
no. 33, August 17th,
1963.

A TREATY THAT FAILED?

mmmmmmmmmmmmmmmmmmmm

The test ban treaty, which is a re-
spectable piece of work, is now in danger of being
hugged to death in a most disreputable - and, for the
treaty, destructive - manner. Yet there is nothing
about the treaty to invite the passionate embraces to
which it is now being subjected by pacifists, neutra-
lists, and the protagonists of nuclear disarmament.

The treaty is in itself a cautious and
very limited agreement; had it not been, it would never
have been concluded. One of the primary reasons why the
test ban negotiations in Moscow resulted in anything at
all, is that those who were party to them elected to
break with the line that had been followed during all
the (unsuccessful) test ban and disarmament conferences
that have been held since the last war, both inside and
outside the United Nations Organisation.

This is precisely what makes the ardent
reception accorded to the treaty by the pacifists some-
what ridiculous because the agreement sweeps from under
them all the ground on which these champions of nuclear
disarmament have marched, stood, and sat for years.

The treaty does not do away with the
atom bomb; it realistically accepts the bomb as one of
the facts of life.

Nor does it put an end to the balance
of terror; what it does do is to recognize the balance
as a possible foundation from which to work towards a
gradual and partial easing of the danger of disaster.

In itself the treaty does not even put
an end to the arms race. All it aims to do is to get
those taking part in the race to declare it a tie on one
particular point, viz. the development of still more
nuclear explosives, a field in which both parties - the

- 2 -

USA and the Soviet Union - already possess sufficient striking power to exterminate one another ten times over.

Thus the treaty is a necessary disavowal of the ostrich-like policy pursued by the ban-the-bomb faction. This was essential if the test ban talks were to lead to agreement on anything at all.

In point of fact the treaty is more a triumph for "sympathisers" with the atom bomb, for those who have asserted that if it is really desired to minimise the danger of nuclear destruction it is essential - as a matter of common sense - to start by acknowledging nuclear weapons as a reality which cannot simply be wished away.

x

Granted this, it is however clear that the test ban treaty *per se* is of very limited scope. But the condition for a successful outcome of the talks was precisely the limited scope of the agreement.

The limitation is really a great paradox.

Up till now the parties to the disarma-
ment conferences have not considered the test ban treaty
in itself to be very important: the crux of the
negotiations has always been inspection, not a ban on
tests. The whole point of a test ban treaty would be
that it got East and West to agree to mutual control,
which in practice means inspection of each other's
territories.

But what we are faced with is a test
ban treaty *without* inspection. It was only by
renunciation of the demand for inspection that agreement
was reached.

The paradox inherent in the treaty is
therefore that in point of fact it does not increase,
but diminishes, the probability of an agreement on dis-
armament. The test ban treaty must be looked upon as
an isolated case which is independent of possible
negotiations on disarmament. If an attempt is made to
extract a principle from the treaty, the only principle
found will prove to be directly opposed to the disarma-
ment talks in the form in which they have been conducted
so far.

- 3 -

x

Viewed in this light it is obvious that the treaty is in no wise a reckless hazarding of western security based on a naive trust in the high principles of the Communists. But the fact remains that viewed against the background of the Soviet Union's incredible record of guile and scheming, a certain measure of scepticism is nonetheless both unavoidable and justified.

It must be admitted that the test ban talks and the treaty resulting from them have demonstrated that it is Moscow that calls the tune in matters East-West. As the well-known French political commentator Raymond Aron put it:

"The West swoons, only Khrushchov smiles ... It seems as though the West is willing to pay a high price whenever Khrushchov deems it advantageous to sign an agreement which, strictly speaking, does not commit him to anything at all. And this less than a year after the Cuba crisis ... "

Other objections are of a technical nature. Some people, among them Edward Teller, Nobel prize winner and "father of the hydrogen bomb", claim that the test ban treaty favours the Soviet Union in the arms race between East and West. The agreement hamstrings the United States in the very sector in which the Soviet Union holds a lead - in the development of nuclear explosives of unlimited power - and in which America needs to conduct experiments and tests. In the development of smaller, tactical atomic weapons, in which the United States leads the field, the Soviet Union will, however, be at liberty to make all the underground tests she needs to enable her to catch up with the United States.

The Kennedy administration, headed by Defense Secretary Robert McNamara and State Secretary Dean Rusk, denies however that there is any cause for anxiety on this point. It claims that America's lead in the development of new weapons is big enough, as it is in the development of heavy nuclear explosives, and will not be threatened by the test ban treaty.

Needless to say, for the uninitiated it is impossible to decide one way or the other. This is a matter of technical appraisement in which it must be assumed that the United States Government knows best;

- 4 -

if it doesn't, then in any case the western world is
in far greater danger than any that may result from the
test ban treaty.

x

Because of its limited scope, the real risk is hardly in the treaty itself. The danger lies in the political exploitation to which it is now being exposed. The secretary-general of the United Nations, U Thant, has turned to good account his being invited to Moscow to sign the treaty. He has very conveniently incorporated it in his neutralist programme, and in so doing made himself spokesman for a formidable bloc of member-states.

U Thant has declared his object to be to put an end to "all nuclear test explosions for ever". This means that also underground tests will be pro-scribed. But U Thant doesn't say a word about inspection and control - though it is because of disagreement on these very questions that the present test ban treaty does not already include underground tests.

Moreover, U Thant wants all members of the United Nations Organisation who are not already atomic powers to enter into an obligation not to "receive" nuclear weapons into their territories at any time in the future. As U Thant has still not uttered a word about inspection and control, this would in practice mean that the United States would not be able to station nuclear weapons at its overseas bases - whereas no-one would be able to check up on the whereabouts of the Soviet Union's nuclear weapon centres.

Finally, U Thant has reiterated the resolution adopted in 1961 by the United Nations' General Assembly and banning the use of nuclear weapons in times of war. No-one, and especially not U Thant, can explain how such a ban is to be enforced; thus it is either just an empty phrase or it will - unless the necessary inspection is provided for - hit the open democracies of the West, and them alone, in their defence measures.

What U Thant is trying to do is to expand the scope of the test ban treaty in direct contravention of its original intentions. The agreement to ban tests was reached only because the treaty was made so limited that inspection was not necessary. U Thant is now

- 5 -

pretending that the agreement can be extended, because
quite simply it has been agreed that inspection is not
necessary at all. By so doing he is destroying the
basic condition of the treaty: an obvious essential
to a disarmament treaty is stringent control and
inspection.

This is not just an ardent embracing
of the test ban treaty: it is downright rape! The
West cannot possibly agree to disarmament on U Thant's
neutralist grounds, which is both hazardous and demagogic.

But the Soviet Union has, unfortunately, every opportunity to support U Thant in his rape of the treaty. This may well reduce the agreement to a mere "scrap of paper". The Russians' intentions will be revealed before very long.

What is already bitterly obvious is that
the West, now as always, has left the initiative in the
hands of the Soviet Union.

663/OJH/JC/th.

FARMAND
GRUNNLAGT 1891

PUBLISHER AND EDITOR
TRYGVE J. B. HOFF, PH. D.
OSLO - NORWAY

"THE FARING MAN"

This article appeared in "Farmand" weekly, Oslo, issue no. 34, August 24 th, 1963.

## THE ACHILLES HEEL OF SOCIALISM.

"Farmand"s sceptical attitude towards Socialism does not stem from the fact that "Farmand" is a champion for free enterprise since 1891. Nor is it solely a consequence of our firm conviction that free enterprise is essential to free intellectual life - and vice versa. And it is not either based only on the ever stronger empiric justification for asserting that Socialism means cultural and economic misery and no Rule of Law.

Our scepticism stems in addition from something else, something that started as a vague suspicion, but which on closer inspection proved to be a very grave objection indeed, viz. that Socialism is _irrational_ - and therefore ineffective - in a modern economy.

Socialism suffers from an innate, fundamental defect which cannot be made good. Socialism means the abolition of private right of ownership to means of production (this is the first of the two principal criteria of Socialism). In consequence, there are in Socialist states no markets for means of production, which means that there are no real prices, - and without real prices it is impossible to calculate.

In the minds of many people the word "calculation" gives rise to associations with Carlyle's description of economics as "a dismal science". Others, again, may picture petty penny-pinching.

However, calculation is not that. It is much more than that. Calculation is _rationality_. Most of us prefer overflowing cornucopias, luxury, and exuberance, but in the sphere of economics the _result_ of an activity must be greater than the _effort expended_, the output must exceed the input, if that activity is to warrant the term "rational".

Mr. Henry Reisiger

FYI Please see page 2

[lc]

AN ENGLISH REPRINT FROM
THE NORWEGIAN WEEKLY

FARMAND
GRUNNIAGT 1891

"THE FARING MAN"

This article appeared in "Farmand" Weekly, Oslo, issue no. 38, September 21, 1963.

## THE HUMAN COST.

mmmmmmmmmmmmmm

In our résumés of "Changes in Communist Economics", we mostly left the floor to the expert authors themselves; but, as we pointed out in an introductory article, in every chapter we feel the lack of a reference to the human cost of socialism."

The only writer who even approaches the subject is Dr. Miller, who records that collectivisation of Soviet agriculture gave rise to "a grim and desparate struggle which left in its wake a trail of physical and psychological damage not yet outlived." This is a very moderate description of the fact that millions of innocent people were massacred or deported to Siberia.

We admit once again that the essays appear sober and objective, as long as their authors content themselves to comment on economics and statistical data. But, just as during the German Occupation figures and production statistics meant nothing to Norwegians, so it is impossible to acquire a true picture of Socialism without knowing what Socialism has entailed in terms of human suffering as a consequence of the terror, torture and fear that are rife in every Socialist state.

Admittedly, fear and uncertainty, and the sufferings of the heart and mind cannot be expressed quantively and statistically, but it seems to us somewhat callous to discuss the economy of the Eastern bloc without any reference to such consequences.

When writing this, we have in mind Professor Ragnar Frisch, who was one of the organisers of an international congress held in Oslo some years ago to discuss the economy of the East. The omission of all mention of the human consequences is rendered even more remarkable by the fact that in a book published to commemorate the fiftieth anniversary of his immatriculation, Professor Frisch penned the following lines on humanitarian aspects:

> "The greatest source of power in my life has been a simple, uncomplicated childhood faith embracing tolerance and respect for all races and nations. I have never been able to understand that anyone should find anything contradictory between science and religion."

We have also in mind a second delegate to the Oslo Congress, Dr. Maurice Dobb, a man whose logic we admire and who, on the one occasion we heard him speak, impressed us as being

- 2 -

a very warm-hearted person indeed; but he insists that in
order to achieve socialism the fundamental democratic right
known as "consumers' free choice" must be abolished.

We have reported so often on conditions in Soviet
Russia that we shall refrain from repeating ourselves. Suffice
it to recall the executions which take place almost every week
of Russians who seek to carry on what in free enterprise so-
cieties is considered as useful and legitimate business.

In the case of Jugoslavia we shall content our-
selves with a reference to Milovan Djilas, Tito's one-time
colleagues, who still languishes - now reportedly dying - in
a prison cell because he dared to express a few bold opinions
on Marxism. This should not come as a surprise to anyone. As
Ernst Halperin writes in "Encounter":

"Communist regimes simply do not recognise the
principle of freedom of thought and cannot tolerate
any fundamental criticism of their institutions."

Then there is Poland. Listeners who heard the
Norwegian Broadcasting Corporation's recent presentation of
Marek Hlasko's play "The Graveyards" received a very strong
impression of just how terrible conditions are in that country.
The author's description of present-day Poland bore the stamp
of authenticity and first-hand experience. Listeners were given
a chilling impression of the fear and terror that stalk the
Polish scene.

Most frightening of all was, perhaps, the fact that
several of the principal characters had played a part in the
Resistance Movement and thereby proved their courage - yet
despite this they were made to appear cowards. They did not
dare do anything to help a friend in distress (he had been
expelled from the Communist Party), but simply asked to be left
in peace in the bolt-holes they had found for themselves.

One of these former fighters for freedom had com-
pletely eradicated his personality, another had gone over to
the enemy and was serving as a torturer in the Secret Police.

Hlasko's play - or, to be correct, the radio play
adapted from a novel by Hlasko - was as vivid and terrifying
in its effect as Roman Brandstätter's play "To keep silent",
which was staged a few years ago both in Stockholm and in Oslo,
and likewise produced by the Norwegian Broadcasting Corporation's
theatre group.

But here is something strange:

When Brandstätter presented his searing attack on
the Socialist state, his play was cited by "Dagbladet" (a
leftish paper) as proof that conditions were improving in the
East, or at all events, in Poland. "Dagbladet" based its
argument on the fact that performance of the play had been
permitted at all. The truth is, that after the first perform-
ance the play was banned in Poland.

"The Graveyards", which broadcast a month ago, was
wished welcome in the same way. In the official programme the
play received an analogous apologetic review. It was explained
that Hlasko, who wrote the novel on which the radio play was
based, was in doubt as to whether he should return to Poland
from West Germany when the play appeared; but he did so, and
nothing untoward happened to him. In other words, "Polen
ist nicht verloren".

The author of the introduction does not deny that
the play is a desparate and bitter attack on regimentation and
party tyranny, painted in garish colours with a broad brush to
scare people and to warn them, but he assures his readers that
the people of Poland "affirm with a smile that things are not
like that, and never have been".

"Aftenposten's" (Norway's biggest - and rightish -
paper's) excellent radio commentator makes it quite clear
that "the author shows us that fear, informing, and terror have
made life one vast graveyard". He also quotes various passages
which clearly show how bitter the attack is and how intense the
pain; but he opens his review by declaring that "the milder
political climate in Poland has evidently brought in its train
freer and more stimulating working conditions for Art."

In view of the fact that Hlasko has not written the
play itself, but only the novel on which the radio version is
based, we think care should be exercised in enlisting the play
as part of the whitewashing campaign. Hlasko and Brandstätter
could not write so intensely and realistically about the lives
of intellectual and freedom-loving people in Socialist states,
unless they had first-hand experience of the subject.

Nor could they write so despairingly and bitterly
if their own minds and bodies had not suffered from the hell
of life in a Socialist society.

H.

666/H/JC/høi.

["AN ENGLISH REPRINT FROM\nTHE NORWEGIAN WEEKLY", "PUBLISHER AND EDITOR", "TRYGVE J. B. HOFF. PH. D.", "OSLO · NORWAY", "\"THE FARING MAN\"", "This article appeared\nin \"Farmand\" Weekly, no. 50,\nDecember 5th, 1964.", "DISMAL AND DRAMATIC.", "mnmnmnmnmnmnmnmnmnmnm

- 2 -

The only military alternative still open to America would seem to be the bombing of the guerilla forces' supply lines up against Communist North Viet Nam; but there is every indication that it is too late now for any kind of military intervention.

In the first place this is because the problems of South-East Asia are at bottom political and not military. This is the paradoxical, but unmistakable lesson to be drawn from the defeat at Dien Bien Phu.

In the second place military action on any appreciable scale presupposes that America is in the last instance prepared to "engage" in a conflict with Red China. But America is not willing to become involved, and ought not to be, either. Despite the strength of her naval forces, she cannot defeat the land forces of a giant the size of China: a war between a whale and an elephant as it has been termed cannot settle anything.

*

In the Congo, too, the United States has done its best to avoid entanglement. Taking the short-term view this is understandable: in the course of the last few years the hackneyed phrase "Chaos in the Congo" has most certainly come to refer to a permanent state of affairs - but it affects primarily only the Congolese themselves.

The events of the last few weeks have revealed what this chaos really means. Europe is shocked at the killing of some fifty or so whites, whereas this figure is but a fraction of the number of blacks who have been massacred. What "chaos" means in terms of barbaric lawlessness is illustrated by the fate meted out to the mayor of Stanleyville. He was taken to the market-place, where the revolutionaries cut various organs from his living flesh - among them his kidneys and liver - which the commanding "officer" then proceeded to devour while the life of his victim slowly ebbed away.

"Chaos" does not mean simply a little "light-hearted" anarchy. For the individual man, woman and child it is an unbearable state of unrelieved terror and horror; that is the meaning of the word in terms of human suffering.

Despite their reluctance to become involved in the Congo the Americans have now been forced to take a hand - for purely humanitarian reasons, to rescue the "revolutionaries" hostages, to prevent their being murdered. But although the United States government has a clear conscience, it is not being allowed to escape political castigation. Not only the Communist countries, but also the United Nations, are now screaming at American "imperialism", "colonialism" and "aggression".

This is only to be expected, as politically "chaos" means that the crudest, the most brutal, and the most cynical are free to do as they please. Ideologically, there-

fore, chaos is the ideal soil for the growth of brutalitarian forces - such as communism.

But it is unavoidable that the United States, as leader of the free world, should become involved. As long as America wishes to defend herself and her freedom, she must also defend the law and order that are essential if freedom is to have any meaning.

*

Both Viet Nam and Congo pose grave problems for the policy of the United States and the Western world. For America the belief in a kind of "peaceful coexistence" has been one of the fundamentals of her relations with the Soviet Union. In her dealings with the underdeveloped countries of the world America has elected to act through the United Nations.

Viet Nam and the Congo prove that the United States has been backing a myth. "Peaceful coexistence" does not - and cannot - exempt the United States and the West from involvement in the unremitting struggle against communism, ideologically, politically, and militarily. And the United Nations is constitutionally unsuited for intervention even in the under-developed countries in the tense situation obtaining between East and West in order to prevent an explosion.

The United Nations' euphemistically labelled "peace-preserving actions" are a tragic illusion which probably originated because the Organisation's initial venture - in Egypt in 1956 - was crowned with success. But this success was due to the special circumstances of that particular crisis.

The fact is that all the United Nations' other "peace-preserving actions" - in the Congo, in the Jemen, and in Cypros - have been sad failures. And they have failed on every level, military, political, and moral.

The President of the United States is now faced with some tremendously difficult problems. He will find it hard to solve them without a fundamental reappraisal of the premises on which America's foreign policy is currently based.

Lyndon B. Johnson, like the rest of us, prefers "peace and prosperity", but "peace and prosperity" presuppose the preservation of freedom and justice in the world - a task which is the historical responsibility of America. Whether he likes it or not, during the next few months President Johnson will have to make decisions which will be of dramatic importance to the entire world.

OJH/JBC/mh/684

FARMAND
GRUNNIAET 1891 ss

PUBLISHER AND EDITOR
TRYGVET J. B. HOFF, PH. D.
OSLO · NORWAY

"THE FARING MAN"

This article appeared
in "Farmand" Weekly No. 4,
January 23rd, 1965.

AMERICA: DREAMING - AND LOSING?

Nowadays only a very courageous - or very
stupid - Vietnamese supports the Americans. The Americans
themselves have a saying that puts the reason very aptly:
**nobody backs a loser.** But few Americans seem to realise
that to many other people the U.S. appears to be the loser
concerned.

This then is the despair of the situation in
Viet-nam. But President Johnson's inaugural address and
his State of the Union message, with the vision of a Great
Society, is in strange contrast to the state of affairs in
Saigon. To the outside observer the president's message
has about it an air of nonwordliness. This is not because
the concept of a Great Society cannot be realised, provided
the Americans stick to their ideals and to their private
enterprise; it is because Johnson's vision seems so infi-
nitely remote from the reality of Viet-nam.

But Johnson, outstanding politician that he
is, may only be putting into words the feelings of most of
his fellow countrymen. They are fed up with a confusing
and frustrating war and, mentally at least, preparing to
withdraw. It is much pleasanter to isolate oneself in dreams
of a Great Society - as Johnson has realised.

Moreover, in many quarters in the US voices
have been heard to maintain that the situation in Viet-nam
is just about hopeless. In itself it is not. Many Viet-
namese know a great deal about communism. They have seen
it practised in North Viet-nam: about one million North
Vietnamese fled south when Ho Chi-Minh set up his socialist
dictatorship.

But for the Vietnamese it is no alternative
to communism to back a prospective "loser" - an ally who
in one, three, or five years' time will leave the battle-
field to the enemy. No money, weapons, equipment, or ad-
visers from Washington will help, unless the Vietnamese
themselves feel convinced that the USA has the **will** to stem
the tide of communism in Indo-China.

As matters stand at present, the Vietnamese
have little reason to believe that, taking the long view,
the Americans possess such a will; at all events there is
nothing about the policy of "peaceful coexistence" to in-
spire such a belief. **That** is what makes the situation in
Viet-nam hopeless.

- 2 -

Defeat in Viet-nam would involve loss of American influence throughout the whole of South-East Asia, and in time also in the Philippines. This would be an extremely serious blow not only to the Americans' political prestige - a fact which at the moment does not appear to arouse very strong feelings in America - but also to the USA's vital strategic interests. However, once the humiliating and perilous consequences of a possible defeat in Viet-nam are realised by the American people, a reaction of some kind will probably be inevitable.

One possible reaction is that the Americans would defend their current indifference by making a fundamental change of course in their foreign policy and re-treating into isolationism. In some quarters the process of justifying the defeat in Viet-nam has already been embarked upon, as witness the following quotation:

> "Into this vacuum of power (in Asia and Africa) we have allowed ourselves to be sucked. ... We have become grossly overextended in regions 'where we have no primary vital interest. ... We have not had sufficient time, money or energy left to take care of our true vital interests nearer home. ... Our security and well-being are not in-volved in Southeast Asia or in Korea. ..."

> "If it is said that this is isolationism, I would say yes. It is isolationism if the study of 'our own vital interests and a realization of the 'limitations of our own power is isolationism. It 'is isolationism as compared with the globalism which became fashionable after the Second World War."

This line of reasoning is in keeping with the traditional arguments adduced by isolationists in the USA. Moreover, these arguments are identical with those so avidly put forward by all America's various enemies during the course of this century - the communists, the Nazis, and fellow-travellers of both parties.

But they are not the words of any run-of-the-mill isolationist; they are from the pen of none other than Walter Lippmann. Lippmann is a man to be watched - not because he is a brilliant forecaster (he is not), but because he is very clever at giving coherent expression to the clishés at any given time moulding or about to mould American opinion. This is Lippmann's genious as well as the source of his influence.

What Lippmann is after is obviously that America should walk out on her commitments in Africa and Asia, and instead pin her faith to "coexistence" with the Soviet Union as external policy and "convergence" of capitalism and socialism internally. In the military sphere everything would probably be staked on what has come to be

known as Fortress America - possibly expanded to Fortress Atlantica, with America as the fortress with the guns and Europe as a bridgehead on the Asiatic, communist-dominated mainland.

For the remainder of the free world the possibility of such a policy is rather terrifying; but it goes without saying that the Americans are fully entitled - and theoretically, at least, also have the opportunity - to switch to isolationism. The question is, what purpose do they think such a policy would serve?

The Americans would be guilty of gigantic self-deception if they were to fall into the belief that isolationism would in the long run secure for them freedom, or well-being, or even peace - all of which are surely their "primary vital interests", as Mr. Lippmann puts it.

Perhaps many Americans feel that it is not quite the done thing to accuse the communists of ascribing a different meaning to "peaceful co-existence" than the Americans. But if the communists do not mean something altogether different, why are the Americans already engaged in wars in Viet-nam and the Congo? Communism is dynamic, and communists in no wise look upon "peaceful co-existence" as a static state of affairs.

Consequently America would not escape communist pressure and aggression by withdrawing to her Fortress America. All she would achieve would be to give the communists a free hand everywhere else in the world to prepare for their attack on the "stronghold of capitalism". The US is already at war; the question is whether the Americans intend to leave it to the enemy to decide *where* and *how* the battle is to be fought.

Isolationism simply means that America would back up against a wall, where the opportunities for action are notoriously limited. In fact, they are probably but two: open warfare - which in this case would mean nuclear war. Or surrender.

*

There is, however, another possible American reaction to a defeat in Viet-nam, and to the consequences such a defeat would entail.

It is that the Americans might be seized by the wrath of which they on certain occasions have shown themselves capable. But such a reaction always has violent effect on American politics, and the results are therefore hard to predict. But it would certainly be a strain on the somewhat synthetic "consensus" which President Johnson is now trying to evoke with his "Great Society".

Ole-Jacob Hoff

OJH/JBC/mh/684

FRIELE (RENT)

APR 25 1967

BRAZIL: RECENT PAST, PRESENT AND FUTURE

I am going to make a short resumé of events in recent years in order to clarify my own thoughts and to remind you of the background which is pertinent to any discussion of Brazil. I will, of course, welcome questions afterwards.

When we consider what our great sister republic Brazil has gone through in recent years, we come to believe that miracles do happen and that maybe the Brazilians are right when they say, "God is a Brazilian." There have been some tense moments, however. First, there was the suicide of Getulio Vargas in August 1954, and seven years later the sudden resignation of Janio Quadros, a popularly elected president. I was in Brazil on both occasions and witnessed the shock and confusion which followed. These were national tragedies, the last one resulting in the take-over by João Goulart, who would have brought real catastrophe to the nation if it had not been for the awakening of the people, especially the middle classes which today make up an important part of the urban population, and the timely intervention by the armed forces.

Goulart is not a communist, but he is weak and unscrupulous and wanted to rule with the support of the workers whose wages and welfare had been undermined by galloping inflation and corruption at all levels. On March 15, 1964, there was a mass meeting in front of the War Ministry in Rio, attended by leftist leaders, at which Goulart openly incited the people to revolt against the existing order.

This was the danger signal, and on March 31 the army made its swift
and efficient move which unquestionably saved Brazil from utter
chaos and possibly becoming another Cuba on a much larger and
more dangerous scale, threatening the security of the entire Western
Hemisphere. Brazil has been lucky, and so have we!

Three years have now gone by, and the country has enjoyed
the benefits from a stable and decent government, probably the
best it ever had. Marshal Humberto Castelo Branco will not go
down in history as the most popular president, as his task of
house cleaning involved stepping on nearly everybody's toes, but he
skillfully managed to preserve a degree of democracy by keeping
the legislative and judicial systems intact. He obtained the
passage by Congress of a new constitution which, while not perfect,
lays the foundation of a democratic form of government suitable
for a country of Brazil's vast and varied size, made up of both
developed and under-developed states, some rich and others poor.
As a matter of fact, under the new constitution Brazil will be
known as the Republic of Brazil and not the United States of Brazil.
More power is centralized in the federal government, especially
the collection of taxes, which will be divided and returned to
the states and municipalities in accordance with their needs.

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Among the brilliant men who served with diligence and devotion under President Castelo Branco, who himself set an example of austerity and selflessness, particular mention should be made of Planning Minister Roberto Campos and Finance Minister Octavio Bulhoes. Their accomplishments have been outstanding in the relatively short time of their terms of office. To cite a few: an almost balanced federal budget, a greatly improved balance of international payments, and a complete restoration of Brazil's credit abroad. There are complaints and criticisms that the public sector of the economy has benefited at the expense of private industry and that the fight against inflation, tight credit, and higher taxes has hurt business. This may be true, and no doubt mistakes have been made which Campos and Bulhoes would be the first to admit. The cruzeiro has been devalued several times and we now have a new cruzeiro which is certainly much more solid than the currency in circulation in 1964. However, the greatest enemy of the wage earner and the employer, inflation, in spite of all that has been done to control it, has not as yet been reduced to the expected level.

To return to the political scene: Elections of Governors were held in September of last year by the state assemblies, and in October Congress elected Marshal Arthur da Costa e Silva,

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formerly War Minister, to succeed on March 15, 1967 President Castelo Branco, who had ruled himself out for re-election. Popular elections of a new congress were held in November. Old political parties had been abolished, the political rights of individuals considered subversive had been cancelled for ten years, and a two party system had been installed at least temporarily. Under the new constitution, which went into effect March 15, additional parties can be formed provided a sufficient number of members of congress can be mustered in their favor. Carlos Lacerda, and former president Juscelino Kubitschek, are making efforts in that direction, although most people consider this to be an alliance which will not last. It is too early to tell what success they will have, as many of their followers have joined either the government party ARENA or the opposition MDB, which is the minority party in Congress. Much depends upon the success of President Costa e Silva in checking a further increase in the cost of living and stimulating economic development, which has been lagging with the exception of projects financed by the government or foreign capital.

Costa e Silva has taken over with a firm hand and selected for key positions civilian and military leaders of the highest caliber from different geographical areas without regard to past political affiliations, although all are known to have supported the revolution of March 31, 1964. It is significant that Costa e Silva

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has completely reshuffled the administration and not a single
appointee of importance by his predecessor has been kept in office.
The reason must be that Costa e Silva is seeking the backing of
the entire country and wants to govern with men of his own choosing.
He feels the need of changing the image of the government which
under Castelo Branco was a sort of benevolent dictatorship and now
is a constitutional democracy, in spite of the extraordinary powers
vested in the president under the National Security Act. Costa e Silva's
main task will be to consolidate the gains made by the revolutionary
government and to build a solid bridge between Brazil's political
past and future. The one thing which Castelo Branco and the military
have wanted to guard the country against is the danger of demagogues
being able to abuse the ignorance of the people to open again the
doors to the communists. Brazil has learned its lesson the hard way
and at great sacrifice, and now must come to grips with its basic
problems such as education, housing, food production and transportation.

There is no time to be lost. The population is increasing
at the rate of over 3% per year, doubling every twenty-five years, and
during the present administration it will reach the 100 million mark.
The Brazilians are the most tolerant and patient people in the world,
but for how long will they be willing to wait? Jaime Magrassi, on
taking over the presidency of the National Development Bank a few weeks ago,

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stated in an address listened to by the new planning minister Helio Beltrão, whom I know personally and for whom I have the highest regard, that the next ten years will be decisive for the destiny of Brazil as the nation will have to opt between development and the chaos which could result from the population growth and the slowness of technological progress. On the other hand, most of Brazil is sparsely populated. President Costa e Silva recently said that the small population density in the interior was one of the phenomena which impressed him the most during his travels. This means that the concept of population explosion must be revised insofar as Brazil is concerned. The country suffers from a regional lack of demographic equilibrium. Cities in the coastal areas are congested with people, while other regions, especially those of central and western Brazil, are virtually abandoned. In the Amazon and the central western zone, the population density is one inhabitant per square kilometer. In other words, Brazil is still a nation which has not effectively occupied its own territory.

One of the answers is more and better roads, such as the one linking Belem with Brasilia, which has opened up a whole new area for development. Juscelino Kubitschek has been criticized for his extravagance as president and for having started the inflationary

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spiral which has raised havoc with the economy. He lost his
political rights on that account and will have to accept some of
the blame for the financial predicament which the country has been in.
However, more and more people credit him with giving impetus to Brazil's
industrial boom, such as the formation of the automobile industry, for
his road building program, and even the construction of Brasilia,
which supposedly cost more than half a billion dollars. These
investments, out of proportion at the time they were made, may well
pay off in years to come. Costa e Silva, for instance, is determined
to make Brasilia the nation's capital and the seat of his government.
He visualizes the need of opening up the central plateau area (planalto)
for agricultural development and attracting settlers from the Northeast
and other overpopulated areas. The climate is ideal, with good rainfall
and many rivers which can be used for irrigation purposes. The soil
is spotty but most of it can be made productive with the use of
agricultural machinery, proper seeds and fertilizers. I have been
connected with a rural assistance organization known as AIA and an
agricultural research institute, IRI, both started by Nelson Rockefeller
and his brothers, which have been active in Brazil for the last twenty
years. We have worked closely with farmers, rural workers, universities,
state and federal agencies, and have some knowledge of the potential
that exists.

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I sincerely believe that President Costa e Silva and his government will meet the challenge of industrial and agricultural development, both of which require modernization and the benefits from technological progress. Private initiative and capital, Brazilian as well as foreign, will have to participate in such a program, which must succeed to provide food and create jobs for the growing population and to make Brazil competitive in foreign markets.

Costa e Silva is off to a good start. He has surrounded himself with men of talent, integrity and experience in the economic field. I mentioned Helio Beltrão, the Planning Minister, who is a successful business man and administrator. The Finance Minister, Antonio Delfim Neto, is a brilliant young economist from São Paulo who served for a brief period as State Secretary of Finance and is closely connected with the banking and business community. The Minister of Industry and Commerce, General Edmundo Macedo Soares e Silva, is well known to many of you. He was the first president of the National Steel Company and more recently headed up the Mercedes Benz organization in Brazil. He was also president of the Confederation of Brazilian Industries. The newly created post as Minister of Transport has been filled by Colonel Mario David Andreazza, a dynamic and gifted young army officer, a friend and associate of the President. This appointment is significant as it indicates the government's special emphasis on the basic problem of transportation.

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I also wish to mention the name of my good old friend, José Magalhães Pinto, Minister of Foreign Relations, formerly Governor of the state of Minas Gerais, who was elected a member of Congress last November. He is the founder, and his family is the principal stockholder, of Banco Nacional de Minas Gerais, which is one of the largest and most successful privately owned banks in Brazil.

It is therefore obvious that Costa e Silva is anxious to enlist the support and cooperation of private enterprise in carrying out his gigantic task of economic development. Foreign capital and know-how is welcome on terms which are more attractive than in most countries. However, it is important for foreign investors to realize that quick profits cannot be expected and that they are invited to participate along with Brazilians in shaping the future of a country larger than continental United States and maybe equal in natural and human resources, many of which are still unknown and undeveloped.

Remarks delivered by Berent Friele
at the Brazilian American Business Round Table
Thursday, April 20, 1967