Amendment to the Inter-American Development Bank Act of 1959

I. 1960 Republican Platform

In the 1960 platform, the Republican party took credit for, and promised
"to continue in support of", such institutions as "the Inter-American Bank".
The platform stressed: "We recognize that upon our support of well-conceived
programs of economic cooperation among nations rest the best hopes of
hundreds of millions of friendly people for a decent future for themselves
and their children."

II. ### Provisions of the Amendment (HR 7406) passed by the Senate January 14, 1964

a. The amendment authorized the United States to subscribe to an additional $411,750,000 in the capital stock of the Inter-American Development Bank (IADB) and to an additional $50 million in its fund for special operations.

b. Between the time when the amendment was first discussed in the Senate (December 16, 1963) and its final passage, the Foreign Aid Appropriations Act for fiscal 1964 was passed with the provision containing appropriations for $50 million for investment in the IADB, the effectiveness of which was conditioned upon the enactment into law of the authorizing legislation.

c. The only provision of the amendment that required a cash outlay by the US Treasury at the time of passage was the $50 million for the special fund. Other outlays would be required only in the event of a highly unlikely future contingency.

III. Vote for Passage -- supported by the majority of Republican senators

The Senate approved the measure by a vote of 45 to 24. Senate Republicans overwhelmingly endorsed the program by a vote of 15 to 8. Three of the four Senate leaders (Kuchel, Hickenlooper, and Saltonstall) voted for, or made known their support of, the measure. Goldwater opposed it.

IV. Reasons for Supporting the Amendment

1. The bank has been a central factor in providing loans and guidance for desperately needed economic and social development in Latin American countries. Such activities were the hemisphere's best defense against Castroism.

2. Now that the bank has gained experience of high repute, the fund itself is handicapped by dwindling resources for new lending activities, which are vitally needed, especially in connection with the Alliance for Progress.

3. The bank has kept the Latin American countries together. They contribute over 50% of the resources available to the bank.

4. The bank has played an important part in creating an efficient management with which to carry out the development of purposes set forth in its charter.

5. It has also been a catalyst in mobilizing other financial resources.

V. Objections to passage of the bill

V. Objections to passage of the bill -- supported by only 8 Republicans

1. The bank's projects are not protected against expropriation. Opponents wanted a provision similar to the Hickenlooper Amendment in the Foreign Aid Act.

NOTE: No bank-aided project has ever been expropriated and probably will not be since all the countries in which projects are situated are contributors to the bank and participate in its management.

2. An increased US contribution would have an adverse effect on our balance of payments.

NOTE: Secretary Dillon testified that the foreseeable adverse effect would probably be no more than about $15 to $20 million.

3. This is not the time to expand American involvement in international agencies. The whole foreign aid program should be reviewed.

[L.C.]

4. By and large those Republican senators who opposed the amendment are those who oppose most aspects of foreign aid.

## VI. Goldwater's Opposition to the Amendment

Goldwater's opposition to the amendment is in line with his past voting record on foreign aid legislation and in opposition to the pledge ennunciated in the Republican platform.

During his 10 years in the Senate, Goldwater has never been recorded as voting for a final foreign aid authorization or appropriations bill. He has consistently voted **against** amendments to increase, and **for** motions to cut, foreign aid economic spending. He has opposed all foreign aid in general and for years.

March 25, 1964

MEMORANDUM

TO: HAK

FROM: DLB

SUBJECT: Telephone Conversation with Peter F. Drucker (138 North Mountain Avenue, Montclair, New Jersey, 201-PI6-8123)

1. Drucker leaves on March 27th for two weeks in Europe and, therefore, declined to write anything for us, but did suggest that he would talk off the top of his head while I took notes. He will return from Europe on April 11th and suggested that he would be delighted to talk to you, or the Governor, or anyone else at that time. (I did not ask him to write anything then, but thought we might ask him to do so when he got back.)

2. Drucker feels that the Governor (as well as Adolf Berle) does not really understand Latin American problems because contemporary Latin American problems are not what they were thirty years ago. In particular, he suggests that NAR thinks of the Latin American middle class as similar to the U.S. middle class, which is not so because entrepreneurship, which is the dominant characteristic of the American middle class, is absent in the Latin American "counterpart."

3. Drucker's views on the current situation, which are expressed in economic terms, conclude that if Latin American can survive the next twelve months it will be "over the hump". He is referring here to the economic collapse brought about in almost every Latin American country as the result of severe commodity price fluctuations in recent years. He says that the tide has sharply turned against the economic crisis and the fundamental question now is whether the social and political underpinnings of the Latin societies can stand the strains of the "early recovery." (This is based on the analogy of the patient whose most perilous days are in the post-operative stage when his chances of contracting mortal disease are greatest.)

4. Drucker cites four areas where the strain (in the recovery period) may well be too great:

a. Drucker expects a collapse in Argentina, which he suggests has shown no capacity for building the social and economic institutions or underpinnings to match contemporary needs. He suggests that Argentina's problems are not so much in the need for social or economic reform as they are in the need to build a unified national will. The absence of Argentine patriotism (and the absence of uniting characteristics between the coast and inland populations) makes any comprehensive national approach to problems unlikely.

Roderick O'Connor at Georgia Tech); the establishment of credit and housing cooperatives in the Peruvian highlands; and the work of Joseph Cecchi, development consultant in Washington, D.C.

b. The promotion of an Inter-American treaty to guarantee Latin investment in other Latin American countries. Some kind of meaningful international guarantee is necessary to enable the Latin American investors to invest in a neighboring country without fear of punitive measures such as confiscation. The risks to Latin investors may be greater in this regard than to U.S. investors if for no other reason than, for example, nobody is less protected than a Peruvian investor in Colombia. Drucker assesses that a 2 or 3% reinsurance guarantee would probably be sufficient to enable a substantive capital flow between the Americas. (He cites Lawrence Rockefeller and Mr. Aldrich of the Rockefeller development firm as the experts in the field.)

8. In terms of expertise in this entire area, Drucker advises us to contact Leonard Kansky of the W.R. Grace Co., New York City, BI4-1200.

From the office of:

SENATOR JACOB K. JAVITS (R-N.Y.)

FOR RELEASE AFTER 5:30 P.M.

Monday, March 9, 1964

The following are the remarks of Senator Jacob K. Javits, prepared
for delivery before the New York Chapter of the Women's National
Book Association at the Sheraton-Atlantic Hotel, New York City,
7:30 P.M., March 9, 1964

THE NEGLECTED THIRD FRONT

The United States has built the most powerful military system in the world to deter attack and has attempted to deter communist expansion through economic aid and technical assistance. But we have neglected the Third Front, information, and have thereby jeopardized the realization of the full benefits of the other two and deprived ourselves of yet another offensive for freedom.

The Third Front is the telling of our story and the explanation of our goals to the world; it is the unmasking of the communist myth. Yet, the United States Information Agency, the governmental organization with the primary duty in this field, is the perennial wallflower of Washington.

What we need is a massive program of education, information and cultural exchange on behalf of freedom. This program should be based on a new, greatly expanded concept of the role of the USIA, as an agency equal in strategic importance in our foreign policy to our military and economic efforts.

The people need to be made sharply aware of the dangerous imbalance between our military and economic strength on one hand, and the lack of a vital propaganda offensive on the other. The people should demand from the President and from Congress a crash USIA program, a program which really gives the agency the tools and talent it needs to do a job worthy of this nation and its ideals.

My intention tonight is to call for this public demand. I believe the American people are tired of always being on the defensive in the world's ideological struggle, and rightly so. They are tired of seeing their country merely respond to criticism. What they want is to wage an aggressive war of ideas.

Yet, while most Americans and most citizens of the free world realize that the satisfactions of freedom, even when compared with its vexations and sacrifices, completely outclass communism, we often spend less to tell this story in a certain part of the world, than American manufacturers spend to sell their products.

This is a serious mistake at a time when we live under the precarious Pax Atomica of a nuclear stalemate, and actual hostilities are pretty well confined to guerrilla-type warfare. The critical battlegrounds now are economic, scientific, and technological, and above all, they are to be found in the realm of human understanding and motivation -- political, cultural, psychological. We can no longer say that a war is won only when the infantry occupies the enemy's homeland and thus destroys his ability to wage war. We know better now. Meaningful conquests are also those won by the legions of the mind and spirit --knowledge,

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[LC]

reason, imagination, insight and judgment, ideas and ideals, and the mainsprings of will and good will -- the capacity to act and the will to do what is right.
have

As a nation, we have much to contribute, and/many advantages, in the many-sided and highly competitive intellectual commerce of the world. Let us never forget that ours was a much earlier revolution than the communist revolution, that it preceded the French Revolution -- indeed, at the time of the French Revolution the U. S. Constitution had already taken effect.

Let us never forget that the declarations of our revolution inspired men seeking freedom throughout the 19th and 20th centuries, and remain to this day a harbinger of freedom to peoples everywhere -- including those immured in Central Europe behind the Iron Curtain -- and even, I hazard the guess, in the Soviet Union and in Communist China itself.

Yet, until now, we have been starving the USIA. Edward R. Murrow, who recently resigned as USIA director, asked Congress, upon assuming his post in 1961, to increase the USIA budget by 25 percent a year for several years. What he got were increases of about 10 percent -- barely enough to cover the cost-of-living increases of USIA personnel.

In the last two decades, the USIA has had five different names, 13 directors and an uphill fight to maintain even a minimum level of activity. Its budget in 1954 was $84 million and in 1963 it was about $120 million, an increase of $36 million or less than 43 percent over a decade when the cost of living alone rose 15 percent.

In the current fiscal year, the Agency's budget was $166 million to cover everything -- salaries, installations overseas, book programs, Voice of America, television, movies and worldwide press services. This figure is about $16 million more than the communist nations are estimated to be spending just to jam our Voice of America broadcasts.

Although it is impossible to get completely accurate estimates of what communist nations are spending to spread their propaganda throughout the world, our own government experts believe that they spend at least four times our total budget for their operations outside the communist bloc. This would exclude jamming operations, their schools of psychological warfare and the many house-keeping items which our budgets reflect.

Increases in the budget of the USIA, in its present framework, will not solve the problem. What I am talking about is a complete recasting of the role of the United States Information program. With Carl Rowan as the new director on the scene, it is an ideal time to begin.

I want to make it clear that USIA is doing a tremendous job with the resources it has. But it just does not have enough to compete adequately with the multi-billion dollar Soviet propaganda machine or with the Communist Chinese. Last year, for example, the communists published 40 million books in non-bloc languages, as compared to our publication of 9½ million books in translation.

USIA's initiative in helping organize the "Books, USA" program --- a private organization through which American publishers donate, or sell at cost, selected paperback books overseas --- is highly commendable. Another example of initiative is the International Media Guarantee program, through which American publishers are able to distribute a substantial quantity of books and periodicals in Poland,

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for example. But it is symptomatic of our lack of sensitivity to the need for
this kind of effort that this program is being phased out.

USIA, on its limited budget, covers a remarkably broad range of activities. It helps American organizations to create new international contacts and broaden existing overseas relationships through their own communications channels. Through its Office of Private Cooperation, it forwards informational materials on U. S. foreign policy statements to the head offices of American businesses for distribution to their representatives abroad.

All of these efforts -- and the special programs to tell the story of Castro's betrayal of his revolution, of our triumphs in space and of the stark tragedy of the death of our late President Kennedy -- are to be applauded. But they are not enough -- they are not even close to the order of magnitude needed to go on the propaganda offensive.

It is not necessary, in mounting this massive effort, to abandon the fundamental principle upon which our information programs have been conducted -- the principle of candor and truth in reporting about ourselves and the rest of the world. Certainly we have been hurt on occasion, as in the ill-fated U-2 and Bay of Pigs situations. On the whole, however, there has been such honesty in U. S. Government information programs as to bring on the criticism that we are unnecessarily hurting ourselves. Considering the public attitude in the world toward information programs -- or propaganda programs generally -- there seems little doubt that our foreign information programs stand very high in terms of the credibility with which they are received and accepted. But credibility is of little value if the information does not reach the people for which it is intended because of a lack of funds.

And neither information nor education will be fully effective unless it is aimed properly. I believe more attention must be given to young people of discernible leadership capabilities in both the information and student exchange programs. We cannot allow ourselves to be hampered in reaching such potential leaders, while they are still young and uncommitted ideologically, by stringent language requirements and other limitations. The Communists have most certainly not tied their own hands in this respect.

We have over 60,000 foreign students in our colleges and universities, only 8,500, or 14.3 percent, of whom are here with the help of either their own governments or the U. S. Government. Yet we know that in the Soviet Union and in Communist China there are entire universities devoted to the overseas students, and the goings and comings of professors and teachers are practically a flowing tide among the countries of the respective communist blocs.

In the cultural field, which the USSR --- with its brilliant musicians, ballet stars, and dance troupes --- has used to such great advantage, we are also still engaged in a makeshift program. It took years even to get a law on the book to authorize our foreign cultural exchange program. We still run it as an appendage of the State Department on a budget of about $3 million a year, which gives us very little latitude for real achievement.

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April 3, 1964

TO: DR. KISSINGER
ROD PERKINS

FROM: June Goldthwait

SUBJECT: Training of Doctors and Public Health Personnel
for Latin America: Proposals of Dr. Alex Gerber

In view of Rod's request to get an appraisal of Dr. Gerber's proposals for training of public health and medical personnel in Latin America, I discussed his proposals with Mr. Anthony Standen of the U. N. Trusteeship Department, specialist in public health in underdeveloped countries, and at present managing the U.N. scholarship program for students from underdeveloped areas.

1. **General:** Mrs. Standen's _general comment_ on the letter from Dr. Gerber was that his ideas were good but not original in the field, that he undoubtedly spoke from a deep concern and an awareness of the shortcomings of some of our present programs, but that there was more enthusiasm than careful thinking in the program he had to offer.

2. **Training in Latin America:** Dr. Gerber's proposal for training doctors and public health technicians in their own countries, instead of bringing them to the U.S. is basically very sound. However, it is not new. Mrs. Standen said that in the scholarship program she has been handling they have given up completely the idea of bringing students to the U.S. or other developed areas for training, unless absolutely necessary, for the very reason that Dr. Gerber cites: the fact that they either do not return to their countries, or, if they do, that they tend to collect around urban areas rather than going back into the rural areas where they are most needed.

3. **Need for hospitals, etc.:** Mrs. Standen felt that one basic flaw in Dr. Gerber's plan was that it lacked the very necessary complement to the program of training medical personnel: the building of hospitals or dispensaries in rural areas, without which it would be virtually impossible for the newly trained specialists to practice. She felt it of the utmost importance that such a buildup of facilities must either precede or at least accompany, a program of training of personnel.

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4. **Training of surgeons:** Mrs. Standen took particular exception to the proposal that the pilot project suggested by Dr. Gerber was to provide training in surgery. Of all the possible types of public health and medical training programs, she felt that the last area to be attacked would be surgery, in view of the far more elaborate facilities needed for the practice of surgery as opposed to medicine. It would be more worthwhile to train persons in public health aspects of medicine, or in internal medicine.

5. **Hoffman's support of Dr. Gerber's program:** I asked Mrs. Standen why, if Dr. Gerber's proposal had so many drawbacks, it had been received by Paul Hoffman with as much enthusiasm as Dr. Gerber indicates. Her conjecture was that, since Dr. Gerber's plan complemented that of Mr. Hoffman, Hoffman may have been particularly interested in supporting it. Hoffman's U.N. Special Fund is limited to providing the so-called infrastructure needed in the underdeveloped areas. In other words it would be able to provide hospitals and dispensaries, but not doctors and technicians. Hoffman would naturally be likely to view with favor any program to provide the necessary complement to the work of the Special Fund.

6. **Regional training centers:** Mrs. Standen felt that the development of regional training institutions, instead of each country trying to be self-sufficient, should be an important part of any medical training program. This would operate to the favor of the smaller countries.

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Alhambra Medical Clinic

1237 EAST MAIN STREET
ALHAMBRA, CALIFORNIA
ATLANTIC 9-5151

February 6, 1964

STAFF

Surgery
Alex Gerber, M.D., F.A.C.S.

Internal Medicine

Roy F. Perkins, M.D., F.A.C.P.
Norman Shrifter, M.D. F.A.C.P.
Frank L. Meyer, M.D.
Judith Graham, M.D.
Harry S. Yamahiro, M.D.

Obstetrics and Gynecology

Roy R. Shoaf, M.D.
Maurice H. Martin, M.D. F.A.C.O.O.

Pediatrics

Monte Schwartz, M.D., F.A.A.F.
Emmett M. Heiligman, M.D., F.A.A.F.
Marshall Spector, M.D. F.A.A.F.

Otolaryngology

James V. De Grazio, M.D.

Dermatology

Morton D. Scribner, M.D.

VISITING STAFF

Urology

John Getz, M.D., F.A.C.S.

Radiology

John M. Clark, M.D., F.A.C.R.

Thoracic Surgery

Richard Carter, M.D., F.A.C.S.

Administration

Loretta Yuhas

Governor Nelson A. Rockefeller
Albany, New York

Dear Governor Rockefeller:

I am writing to you at the suggestion of Mr. Edward S. Shattuck of Los Angeles. I had discussed with Mr. Shattuck some of my ideas for foreign aid in Latin America as it relates to the medical field, and of the frustrations I had encountered in getting our State Department to accept my thoughts. Mr. Shattuck indicated that you may be interested in what I have to say.

By way of introduction, I am Professor of Surgery at the Loma Linda University School of Medicine. As a visiting Professor of Surgery in Southeast Asia, and during my experience on the SS HOPE in Peru, I saw at first hand the poor health conditions in underdeveloped countries. I shall present the problem as I see it and the solution which I have to offer.

The Latin Americans who come to the United States for medical training largely remain here, so that we find ourselves in the paradoxical position of draining skilled technicians from poor nations at a time when we are pouring money into these countries to increase their technical capacity. Mr. David Bell touched on this problem in an address to the Third National Conference on World Health, September 26, 1963. Moreover, the trained men who return to South America conglomerate in the large cities where facilities are available, resulting in primitive health conditions in the rural areas. The lack of hospitals and facilities, coupled with the rugged living conditions, makes it extremely unlikely that trained personnel will voluntarily plan to work in the underdeveloped parts of underdeveloped countries.

This disparity between the socio-economic conditions in the urban and rural areas is chiefly responsible for the unrest among the poor that leads to the violent political upheavals in Latin America, of which you are well aware.

To break this vicious cycle in the health field will require a vigorous approach that is bold in design and whose successful outcome will depend upon careful planning.

Specialists from the United States would travel to South America to train the people in their own country. During this time, hospitals and ancillary services would be provided in the outlying areas where trained doctors will have the facilities to exercise their talents. An organization, such as the American College of Surgeons, must be created, membership in which will be necessary to obtain prestige and

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February 6, 1964

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choice positions. Following the training period, it would be mandatory for trainees to spend two years staffing the hospitals in the rural areas before they would be eligible to take the examination for certification in a specialty. I am not familiar with the compulsory military obligations in South America, but this two year period could possibly substitute for military service. In any event, such a service would not differ from the obligatory regular Army requirements of our West Point graduates, and would repay in only small measure the time, effort and money spent in training men for positions of high qualifications.

This broad plan would keep skilled Latin Americans in their own country, would provide health services in the rural areas, and would improve the lot of the underprivileged in these areas. Moreover, we would be sending men and materials to South America instead of money, and, from my observations, this is an important consideration.

The rural hospitals could perhaps be used as centers for family planning advice and instruction. I participated on an American Assembly panel dealing with the population problem in November, 1963, and the statistics are indeed frightening. The South American countries are beginning to realize that the population growth is nullifying all economic and social gain. Contrary to the belief of many in this country, the religious question is not an absolute deterrent, since family planning clinics have recently been started in South America with government and church approval.

I presented this plan to the Naffziger Surgical Society in October, 1963, as part of my presidential address, and it was enthusiastically received. Dr. William O. Reinhardt, Dean of the University of California Medical School, is also anxious to cooperate in this program.

I am proposing that we use the human resources of the Naffziger Surgical Society to inaugurate a pilot study to determine the feasibility of this project. If we can demonstrate the advantages of this type of training in the field of surgery, the program can be expanded to encompass the range of activity I have outlined.

I have in mind Ecuador, which is relatively small, has only three medical schools, and which is very poor. I believe it is important to concentrate our efforts in a small area for "show place" purposes, rather than to dissipate and dilute the demonstrative results.

This entire plan has been presented to the State Department in Washington, and to Mr. David Bell, the Director of the Agency for International Development, through the effort of Mr. Paul Hoffman of the United Nations. I met with Mr. Hoffman in Pasadena regarding this program, and he was sufficiently enthusiastic regarding its merits to personally bring the program to Mr. Bell's attention. Mr. Bell evidently submitted the plan to the same staff that I had met in Washington, and the entire project was turned down. Evidently they wish to continue with the same sterile, self-defeating service projects which have not stimulated any economic or social growth. The consultant in Washington, who did not think my project was worthwhile, was more interested in his own program of sending mobile hospitals into the jungles

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January 21, 1964

TO: HAK
FROM: DLB
SUBJECT: Summary of Latin American Research

1. The following projects are being undertaken by the research group in relation to our general discussion of Latin American relations with Julio Nunez:

a. a brief background memorandum on the September elections in Chile;

b. a brief background memorandum on the Venezuelan charge against Castro and the OAS; and the treatment of that complaint.

c. a compilation of U.S. policy (and less official) statements on the need for more leftist political participation in the economic and social revolution which is a prerequisite to the political security and stability of the Latin nations.

2. As I have suggested briefly, while it is clear that the Governor should not for international political reasons, as well as for domestic political reasons, raise the subject of a potential leftist take over in Brazil before such a take over or crisis arises, it does seem to me that other avenues are available here.

If we were to do substantial research here and detail with complete honesty, our fears of a potential crisis in Brazil and our suggestions as to policies which might be followed in case the crisis broke or in anticipation of the crisis, these might be put in a private and confidential letter to the President. In so doing the Governor would possibly be serving the important cause of attempting honestly to do what he can regardless of politics to avert an international disaster.

At the same time the letter from the Governor to the President could indicate that the Governor had no intention whatsoever of raising the issue as a political matter unless the crisis developed in Brazil. He could also say that he had no intention at any time of releasing the contents of the letter. Under these circumstances the Governor, it seems to me, would be free to say, if a crisis did break during the campaign, that he had written in great detail warning of this to Johnson and he had promised not to divulge the contents of the letter and that he would not do so -- that he would leave it up to President Johnson to determine whether this was proper or not. Then, of course, there would be considerable pressure on Johnson to release the Governor's letter which would be an ideal and favorable political position for the Governor to be in.

Under these circumstances it might be wise for you at some stage to jot down the many aspects of this question that interest you so that we can have the girls do some more detailed research on some of the particular questions.

July 19, 1961

Mr.
Gilbert J. Huber Jr.
Rua Desembargador Viriato 2
Rio de Janeiro, Brazil

Dear Luke:

Since I wrote to you last week on general political topics, I have read that a "spokesman" of the United States government has stated that it is erroneous to speak of a Marshall Plan for Latin America because the necessary structure for such a plan does not exist in this area. This seems to me to be a particularly important statement which confirms my fears concerning the proposed U.S. development program for Latin America. It also should indicate to all of us the urgency of our task in stimulating the established order to evolution.

As I see it, the purpose of all of our "groups" in these countries is not the negative task of fighting communism, but the positive task of developing a sound private enterprise economy within the framework of the Western Christian tradition. I reiterate my firm conviction that the only possible way of achieving that is to convince, cajole or force the established order to evolve. Again, when I speak of the established order or the forces of order I am not referring to café society, but to those elements in our society who today have at their disposal the forces of production and distribution and who represent the necessary link with the cultural and spiritual base of our Western society. I am convinced that today we do not have the time to sweep away this group, which in our generation has largely failed to live up to its responsibilities, and to develop a totally new group. If we had started years ago this could have succeeded, today we must first work with them and establish clearly a means whereby the stratification of society is not brittle, but fluid.

Translating all this theory into practice, where do we stand? In my judgment, it is essential for those elements in each of our "groups" who do represent a cross-section of the leadership cadre of their nation, to accept and immediately begin to practice in the economic sphere those principles which for example the group last November spelled out in New York. Many of these are applicable to the backward and medieval local corporate entities as well as to the U. S. corporation working abroad. This is essential in order to give to their government the necessary strength in dealing with the Kennedy's administration's views on aid to Latin America. These governments must be given the necessary support to insist that the private sector in their countries have indicated the vitality and sense of responsibility which our officials insist is lacking.

In the political area the different party elements represented must accept the absolutely urgent need of adopting unified programs and candidates for high political office based upon an acceptance of a common moral and spiritual heritage. Our society will be totally incapable of facing up to the communist threat if we cannot prove to those undecided that we too have moral discipline and a firm belief in unified action to develop a Western Christian ideal. We can no longer afford the luxury of dividing our forces in the struggle. We must resist the temptation of dissent and independent action which is afforded by our system and which is being used to their advantage by the communists.

We in Argentina are fortunate I think in that the present administration in Washington is willing to accept the fact that its generalizations are not applicable here. I am insisting however in the leading circles here that this should not cause Argentina to have false illusions about its possibility for dynamic growth in a continent rapidly deteriorating. It is my hope that from here there can come a basic stimulus for the ideas I am expounding and I am constantly meeting with those who can influence events here to try to obtain action.

Many times I have heard you say that we cannot have democracy when half the continent is starving. I agree, but please realize that this is only one part of the problem and that the solution is not that easy. Yes, I say easy in spite of the fantastic difficulties presented, for the basic issue is the development of a political theory that will permeate all the activities of society and which will satisfy that human longing to be at the same time free and without doubt. Humanity requires certainty in freedom and we must hammer this out in a practical way.

Best regards,

Sincerely,

JEN:mr

Julio E. Nunez

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July 24, 1961

Mr. Gilbert Huber Jr.
Rua Deambargador Viriato 2
Rio de Janeiro, Brazil

Dear Luke:

I hope you will not mind my repeated letters to you spelling out some
random political thoughts. As I know that later this year you will have
occasion to discuss Latin American political problems with groups who are
in a position to influence events, I have wanted to express some thoughts
that have been fermenting for quite a long time.

The basic ideological problem of the United States today is that we have insisted upon the theory that the Anglo-Saxon heritage is the only true expression of the Western Christian ideal and that it must be the model by which all political systems must be judged. In my judgment, there is grave doubt that this system, as we practice it, can satisfy that requirement of certainty in life for which humanity in the non-Anglo-Saxon world years. I do not mean by this phrase "certainty in life" what is commonly referred to today as "security" and indeed it is this very confusion of terms which is one of our principal failings. Humanity seeks to live in an environment of established customs, attitudes and institutions, one in which there is general agreement on basic values, one in which it is not necessary or required that the basic framework of society must be constantly re-examined. Whether we like it or not, the human animal has a basic urge to achieve this. I speak of course of the majority of humanity and particularly of Latin American man. Our Anglo-Saxon society has developed a certainty in doubt which is peculiarly satisfactory to our established mores but we make a tragic mistake in insisting that this is our message to the world and one which must be accepted everywhere.

So that there can be no confusion, let me say that I mean by certainty in
doubt that constant process of self examination and analysis of the basic fabric
of our society which takes place in the United States. It is essential in our
country to be constantly doubting, questioning and seeking. Very few of our
ideals or institutions are immune from this process and our entire judicial
system is designed to give legal validity to the process. Indeed the interpretative
function of our Supreme Court today is ever increasing the permissible area of
dissent which a citizen may have in the face of a collective legislative judgment
In American liberal society, it is a sign of backwardness or a reactionary flaw to
be certain of anything.

In Latin America we find a twentieth century society living side by side,
very often in the same country, with a eighteenth century society. The time has
come when those living in the latter are becoming increasingly aware that their
society is inadequate. They are not happy with what they have and yet they do
not understand and have difficulty in assimilating the new. They have lost their
sense of identity with their traditional ways and often resent them, but they are
not yet part of the new world, the world of the future. All of this is possibly more
true in Asia and Africa, but in my judgment is also valid in Latin America.

Primitive traditions are generally very demanding, both emotionally and psychologically and these demands have become an inseparable part of the very being of the people. It is over this mass that we are struggling with communism. Communism has, with frightening success, been able to convince many of these transitional societies, that it represents and is the future and has developed a doctrine that in many ways has become an acceptable substitute for the traditional ways. While representing the future it also represents discipline, a spelled-out doctrine constantly being interpreted by a party hierarchy. Communist society makes demands upon the people; they are constantly called upon by the state for one reason or another. To vast majorities this is desirable and necessary to a satisfactory life.

The Latin American masses have rigid, tough and demanding traditions. The Indian societies of our hemisphere were strong and each member was required to contribute a great deal in both effort and tribute to the established authority. The democratic tradition in these countries was basically a transplanting of a European concept to an alien land and the mechanics of this system were mastered and administered by the European settler and his descendants. Every country in this process has had a different experience and here it is impossible to generalize. For example, in Brazil, the Portuguese colonist integrated almost completely with the non-European element of the population so that the political-economic ideas of Europe permeated more easily.

Today these masses are breaking with their past. They do not sense themselves as playing a role in the present and see no hope in their future. This has resulted in a basic dissatisfaction with their traditional societies which has been accentuated by the increasing economic integration of these primitive groups into the modern economic system. Rural societies have weakened and when incorporated to the urban mass, are lost, both emotionally and traditionally. These masses are demanding and badly require a doctrine which will make them feel a part of the present and the future, but which at the same time will link them in a satisfactory way to their past. The strength, firmness and demanding quality of primitive societies must find its modern counterpart in the Western Christian ideal which in essence too is tough, hard and demanding.

We however are insisting on the Anglo-Saxon theory of certainty in doubt, of freedom for freedom's sake, and of our organization of society where the password is "live and let live". We at home find this eminently desirable, but I seriously doubt that it is the proper approach in Latin America. For the masses of Latin America think Anglo-Saxon liberalism is a very diluted substitute for the strength and singleness of purpose of communist society.

I come inevitably back to my main theme that our only hope is that the established order, which for centuries has given the mould for Western tradition in this area, will evolve and bring the masses from the past to the present and the future by proving that it still has vitality, imagination and strength. The masses must be made to realize that the future can be achieved by maintaining the traditional mould, that our traditional institutions which have been built up over generations do not belong to the past but to the future. The hierarchical Western society must demand loyalty, sacrifice and work and must give in turn devotion to duty, responsibility and a satisfaction for the material aspirations of the masses.

We are fortunate I think in that in most countries of Latin America we have created the means whereby those of value may rise to authority, for we could not pretend to perpetuate a system of heredity in any sense. Our democratic systems while faulty, do function and with a new burst of vitality will provide the necessary vehicle for the future.

Do not believe for one minute that the basic appeal of communism is "Something for nothing". It is the appeal of a doctrine that has proved itself to be "modern" and at the same time is tough, hard and demanding. It is also the appeal of a theory of History and trash which eliminates doubt and which has the flexibility provided by the interpretative function of the Communist Party. We cannot fight this by offering more of the good things of life to the masses. They want those, but they want much more and the issue of our times is whether we can give it to them.

It is interesting to quote here the Basuto proverb from which Mr. Robert Ruark got the title for his popular novel: "If a man does away with his traditional way of living and throws away his good customs, he had better first make certain that he has something of value to replace them".

Best regards.

Sincerely,

JEN:mr

Julio E. Nuñez

Conference given by Julio E. Nuñez at Meeting of the
Instituto Chihuahuense de Estudios Sociales, Chihuahua,
Mexico, June 29, 1963.

THE DYNAMIC SOCIETY

It is a great pleasure and honor to be here with you today to discuss with
you what I consider to be problems of fundamental importance to all of us. It is a
source of real hope for the future to see men of vision and action actively dedicated
in a practical way to showing that our traditional western system is capable of provi-
ding the leadership necessary to solve the problems of our day. The Instituto Chihua-
huense de Estudios Sociales, in its objectives as set forth in its Estatutos, spells out
a necessary equilibrium between thought and action which is essential to establish in
Latin America today. Latin America is not, and never has been, lacking in excellent
ideas, but it has been almost terrifyingly weak in executing them in a practical way.
The Instituto, in placing stress on concrete solutions and their practical application,
seems to me to be demonstrating an excellent appreciation of the urgency of the mo-
ment. If the Instituto is as direct and forceful in all of its activities as it has been
in bringing me here to this pleasant city, I can assure you that all of its efforts will
be crowned with success.

There can be no question in the minds of any of us that this hemisphere is
in the midst of a grave political, economic and social crisis and that the solution
found for this crisis will determine its history for many years to come, indeed, it could
determine the history of the world for generations. While there are many special
factors which affect and shape this crisis, factors of a local or regional nature, I

- 2 -

would venture to say that it is only a reflection of the grave crisis affecting the entire
western world. Unrest, discontent and violence seem to be the keynote of our modern
western society. As the months and years pass, it does not appear that any appreciable
progress is being made to ease or solve this situation. Rather it would seem that it
is being constantly aggravated.

From outside we are faced with an ever increasing and total onslaught by
the forces of atheistic communism upon the very essence of our societies. The aim
of this group is to destroy the fabric of our traditional ways and institutions and to
replace them with customs and systems totally in conflict with the basis of our we-
stern society, with freedom and the dignity of the individual, before the State and
before his God. Communism has developed a mystic and a doctrine which is hammered
into the minds of the faithful with a persistence that one must marvel at. Our enemies
have realized that in ideological unity there is strength and they have created a mono-
lithic doctrine which brooks no deviation in action or in thought.

Internally, our society has failed dismally in developing a coherent mystic
or doctrine in which all of western society can find ideological unity and strength.
This is a failure on the positive side resulting primarily, in my judgment, from a
lack of understand of the fundamentals of our society or, indeed, of any society. On
the negative side our efforts to combat the communist enemy are largely ineffectual
because we have failed to properly appraise the reasons for its success.

I have painted a rather dreary but, I believe, realistic picture. However,
it is a picture which can change. If we in the west in general, and particularly here
in Latin America, begin to understand the reasons for our failures and begin to react
with the vigor and imagination that propelled our western society to the greatest im-
pulse for progress known in the history of man, the picture will change dramatically.
In order to create and maintain this dynamic society, it is essential to understand the
essence of all societies.

- 3 -

It is palpably clear that no society of any sort functions without leadership. In all aspects of our lives this is apparent - in our business, in our club, in our government at all levels. Leadership is the spark that puts vitality into all human societies. It is the most unique of qualities. Those who have it by nature wish to exercise it. It is in the competition generated by those with leadership ability to achieve authority in whatever field of endeavor it might be, and at no matter what level, that the forward thrust of mankind has been realized. Only the society that offers its human raw material an opportunity to obtain the tools of leadership can expect to be both dynamic and stable. By definition, not all can be leaders, but if all are given an opportunity to display leadership, then the able in the society will tend to be the guides and moving forces of that society.

I am speaking here obviously of meritorous leadership, leadership based on ability, intelligence and courage. Leadership in a western society has too often been misinterpreted to mean hereditary leadership based on the intelligence of prior generations. The kind of leadership to which I refer must be proven not just by every generation but every day. The leadership to which I refer is found also at all levels of society and not only involves leading men or institutions, it is also leadership by example. A good carpenter, a good tailor, a good policeman are all displaying leadership in their own endeavor and while each activity must have its place in the hierarchy of every society, it is the leadership element at each level which will determine our future. It is they that inevitably move a society in all its broad aspects.

A society is stable to the degree that those within it who have a capability for leadership are given an opportunity to express it. This stable society becomes dynamic when the development of and renewal of the leadership group becomes a constant and positive endeavor of the established leadership element.

[lc]

- 4 -

One may wonder why such stress on just one segment of the society, what about the underfed or the generally underprivileged? It is essential that this aspect of the problem be put into proper perspective if we are to survive as a system based on a Christian and western appreciation of the essence of man. The problem must also be faced with a clear knowledge of the capabilities of our own society and a courageous understanding of the danger we face today.

Fundamentally, the tragedy of the underfed and underprivileged is that amongst them unquestionably there are large numbers of potential leaders. The world needs them and must have them. It is one of the mysteries of the quality of leadership that no amount of stifling seems to extinguish it. It is often found in the most humble and the most underprivileged. Our enemies have understood this only too well. The communist wastes no time on the mass as such, except to use it as a force to be led to achieve the movements objectives. The communist hammers away at our frustrated young people, who have intelligence, who have the spark, who do not see in our system an opportunity to achieve an appropriate place in the scale of hierarchy. The appeal of the enemy to this group is not that communism will give food to the hungry or clothes to the needy, but it is that when communism achieves power, they will be given adequate recognition in the hierarchy.

By the same token, the communist works on those elements amongst the mass who display the potential of leadership in a society so far incapable of giving them the tools to develop this potential. The communists speak of educational progress and intellectual opportunity for this group. In any case, the enemy is engaged in a constant effort to seek those with leadership ability who are frustrated and disillusioned and those who have the native imagination to feel the spark within them and to understand the need for it to be developed and matured.

- 5 -

In the meantime, what are we doing? All of our leaders both in the United
States and Latin America tell us that an assault on poverty and redistribution of wealth
must be the urgent and primary aim. Only in this way can we avoid communist disaster.
This is both absurd and suicidal. Certainly, our Christian objective must be that all
humanity be provided by society with the minimum of material goods consistent with
the mores of the society in which it lives. Also, every human being has an unquestion-
able moral obligation to develop his faculties to the maximum of his capabilities. In
order for him to do this, society has a moral obligation to give all an opportunity to
achieve this development without restrictions.

One must transfer these ideas and theories to the realities of the moment,
and it becomes obvious that priorities must be established and enforced. First of all
must come education. Without this too many excellent human values are left dormant
or inoperative and too many others become easy prey to the tantalizing offers of the
communist. The fundamental public services, power, light and sanitation are also
important and the State must determine the most efficient and effective way of providing
them. Beyond that, I suggest that our resources can provide nothing more than pro-
grams designed to assist and foment the elements in the society that show in their respec-
tive activities that they have capacity for leadership.

This developing leadership must be the cornerstone of our hopes for social
progress everywhere and the eventual establishment of standards of living consistent
with the minimum just expectations of our peoples. The society, however, which faces
its social, economic and political problems with a recognition of the validity of the
fundamental principle of hierarchy is a society with a dynamic potential and one in
which the human values which we cherish will have the best chance of survival.

- 6 -

Attempts from within or without to by-pass or avoid the established hierarchy
in the attempt to improve the standard of living or to solve social problems, are doomed
to failure and can only result in assisting the enemy in his task of supplanting the
existing leadership group with his own more rigid hierarchy. On this score we need
have no illusions, for the communist state is based on an extremely severe hierarchi-
cal principle which is much more inflexible than our own.

Obviously, we cannot be happy or satisfied with the present leadership ele-
ment in our societies. They have become brittle and often atrophied. They have thought
of the privileges of their position and not of their obligations and responsibilities.

The problem is to instill in this group a new sense of purpose and responsi-
bility and to rejuvenate it, broaden it, and to establish the kind of flexibility and fluidity
in the hierarchy which is an essential of our western, Christian system. My country,
the United States of America has reached its position of power, coupled with stability,
because its hierarchical concept has been based on the principle that every level in it
is open to those who prove merit. In addition, the system has provided the basic tools
with which the development of leadership becomes a practical reality for all segments
of the society. Unfortunately, however, in my judgment, my compatriots tend to forget
this when they try to assist others abroad in solving their problems.

The United States aid programs in general, and the Alliance for Progress
in particular, have not approached the problem of developing sound progressive socie-
ties from an appreciation of the necessity of working with and through the leadership
elements, particularly in Latin America. It is not necessary, indeed, it is not desirable,
to indicate that the United States is pleased with what the present leadership element
has done, but it is fundamental that our principal effort be designed to influence a
proper evolution of this leadership group.

[lc]

- 7 -

We are fortunate that in many countries, if not all, the leadership groups are recognizing the necessity for this evolution and that with help and encouragement we can hope for steady progress in this regard. This is not an appeal to maintain the established order, or to perpetuate any particular group in control, it is an appeal to give new thrust and vitality to the group which must guide progress and, by establishing it on a flexible and fluid basis, create the stimulae essential to a permanent dynamic evolution within our traditions and principles.

The Alliance has stressed that the fundamental problem in Latin America is that there are too few rich and too many poor. We insist in our statements that the "feudal" nature of many Latin American societies must be eliminated; we indicate that the fundamental problem of the area is the masses and our attempt is to communicate directly with them. This is contrary to our own interest and to the interest of the kind of society we should wish to help to establish in these countries. Rather than give the impression that we wish to by-pass the local leadership and thus indicate our disdain for it, we should aim our principal effort at working with them and through them. Groups such as the one sponsoring this meeting would seem to be a good example of the type of local leadership which should be stimulated.

We in the United States do not really understand Latin America or Latin Americans. There are very few of us who have had the training or the experience to know the local problems. We must rely on the local people there in order to get the job done. If we are to make progress in this generation and in a manner consistent with our objectives, our only hope is to deal with the present leadership and to try to convince it to do its duty.

In fairness to my country and compatriots it can certainly be said that they have not been helped too much in this process by the local leadership element. The lack of practical planning or imaginative programming by the local groups has been

- 8 -

a very important contribution to the failure of United States aid projects. It has not even been easy in some countries to effectively identify the leadership groups for they are well hidden by inefficiency and inefficacy. While we can be severe and harsh in our judgments on the Alliance, we must also realize that a good deal of the responsibility lies in the local societies themselves. I believe that the approach in Washington is more understanding today insofar as the necessity of working through the local leadership is concerned. However, if the local leadership does not indicate the way, does not organize itself so that it gives at least the impression of effectiveness, this change of climate in Washington will have no practical results.

If we are to have any chance of survival in the few years ahead, the leadership groups in Latin America must begin to prove to themselves and to their societies that they are capable of finding viable solutions for current problems. I say, chance for survival, because I believe deeply that any society not based on the principle of private, individual initiative with freedom cannot maintain for long the fabric of a western, Christian organization. We have reached the point in many countries where it is not only necessary to prove to society that private initiative can make possible a sound development, but it is necessary that the private sector recover its own self-confidence in its capacity to get the job done.

Let there be no illusions - Latin America will continue to be an important area of the world so long as there is life on this planet. If socialism and communism clamp their fist upon it, it will not disappear. We may disappear, but the nations will go on. The only issue to be decided is whether the development that must come will be within a framework fundamentally acceptable to western man and one properly reflecting the standards of our civilization.

We can be certain that unless our society proves that within its structure there will be a place for the young developing leaders at a level commensurate to their ability, this new leadership element will create or accept another type of society

- 9 -

which will provide this opportunity. Further, if this leadership cannot show itself to
have the vitality and imagination to provide society with the practical solutions to its
pressing problems, then it will be brushed aside by the pressure of events.

It seems clear to me that all United States aid programs should be designed
first and foremost to developing the necessary base from which leadership must rise.
Education must be first on the list and in that category, private education should be
the most important. The private sector in each of these countries should work to-
gether to prepare projects designed to provide the broadest possible coverage for
the private educative process. Obviously, private effort cannot supplant the state
effort, but certainly, there are large areas which could best be served by privately
organized institutions. I am thinking primarily of industrial education, from the level
of the industrial arts to industrial management and to agricultural science. In many
cases the private sector will not have the funds to accomplish the job alone, but their
planning and staffing can certainly be done by private enterprise. Sound plans for
industrial and agricultural education prepared by private industrial and agricultural
groups in each country should be actively supported by the United States and by the local
governments. This should be done in such a manner as to give the credit to the
group providing the inspiration and the practical organization.

The United States should encourage its institutions of learning to engage in
active programs to assist and collaborate with local Latin American educational in-
stitutions in developing more modern curriculums which will give eager youth the
proper test of its intellectual vigor. If necessary, financial assistance should be
given in order to accomplish the cooperation. We should encourage our friends in
Europe to do the same, for I am not suggesting here that the United States should
necessarily be used as the only model. Obviously, intelligent assistance must be
based on an adequate appreciation of peculiar local needs, but intelligent men of good
faith, helped by local groups, should have no trouble with this.

- 10 -

The local private sector should be the moving force in creating well run and truly independent educational foundations designed to send abroad for training and education some of the eager young brains now developing in all the countries of Latin America. Financial help should be channelled to these institutions by their like organizations in the United States and Europe and also by the governments themselves. These students should be given an adequate opportunity to find a just place in the society to which they belong. Participation in this program should be open to all on an equal basis. Many significant strides have been taken in several countries in this regard, but much more can be done and, particularly, in maintaining a solid link between the sponsoring group and the student while abroad. In the past, too many of these excellent young people have been lost to the society that needs them because of this lack of a solid bond.

In some instances it is possible to face many problems of a modern society in one project and to indicate solutions that will tend to invigorate the present leadership and create the basis for new leadership cadres. I am thinking especially of the agricultural area. Much of Latin America is agricultural and a very important part of its population earns its livelihood from the land. Thus the problems of the land are extremely important to any analysis of the societies we are discussing. Can the present leadership group provide solutions for the problems of agricultural development within the framework of our ideals ? I think it can, and I think with proper guidance that it will.

Everyone talks these days of agrarian reform. No politician in this hemisphere, north or south, refers to the general problem of Latin America without insisting on the necessity for it. The key question is exactly what is meant by the phrase. It is precisely in this area that I think the current local leadership has one of its greatest opportunities. Agrarian reform must be made a process for the creation of new leadership in a vital area and a process of providing incentive to those individuals and families who have the same pioneering spirit that developed the agricultural areas of

- 11 -

this hemisphere. When agrarian reform is used as a vehicle for the rewarding of the greedy and lazy who merely wish something that belongs to someone else, on the mistaken assumption that this creates human dignity in the recipient, it can result in destroying the base of our system instead of invigorating it.

I would propose that the private agricultural and farm associations in each country, with the cooperation of their government, study closely the productive potential of the vast state lands. After a careful analysis, pilot areas should be picked out which would involve the least investment. For the area chosen, competent technicians, either local or foreign, should prepare a complete project of colonization. This would include transport, power and light, housing, schools, health, farm machinery and equipment, and an appropriate objective screening process for applicants. The aim of the project would be to bring to the area, divided into reasonable economic units, intelligent, and courageous young families desirous of becoming owners of their own land, but willing to work to achieve it.

The project, once prepared at a technical level, should then be supported by the Alliance for Progress, local government, local credit institutions and the local leadership group in general. Long term, low interest loans should be given to those chosen as colonizers on terms and conditions which would cover farm management methods, housing care and maintenance, and compulsory education for the children. All this should be administered by the local agricultural associations and at their own expense in large measure.

The health aspect of these colonizing areas would also provide an opportunity for the development of private agricultural medical centers linked to a similar institution in a large urban center. Medical education in many countries is sadly deficient because of the absence of the resident doctor system developed in the United States about 80 years ago. The young Latin American doctor gets his degree and has

- 12 -

little, if any, of the necessary post-graduate educational opportunities. Residence at private agricultural medical centers under the guidance of experienced physicians on regular rounds would stimulate a much needed profession as well as give good medical care to the colonists.

This type of project would bring new, untapped areas into production and would broaden the landholding base in a manner calculated to put strength in the social fabric by rewarding energy and courage and not envy and greed. Obviously, this type of planning is not easy and it will require hard and imaginative work. However, the rewards will be enormous.

Instead of pious empty phrases, we in the United States would do well to encourage this type of practical planning in every way we can. The main burden, however, must be with the Latin Americans. The United States has money, in limited amounts, and good faith, but only Latin Americans can provide the appropriate vehicles so that money and good faith can be put productively to work. Unless it is done by the Latin Americans, it will not be done at all. That, all of you must realize and never forget in your thinking.

In the industrial sector, too, a great deal can be done by the private sector in each of the countries. A more orderly, sound and profitable industrial development for both labor and management can result from a thorough appraisal by the private sector of the industrial potential of each country. I have particularly in mind those countries, such as Mexico, Argentina, Brazil, Chile, Peru, Venezuela and Colombia, where there already exist large productive industrial sectors. In many of these countries the industrial development has been artificial and in some has occurred with little regard for the market potential. With the existing industrial plants, however, many new products necessary for the economy could be produced, by relatively small investments in new machines and buildings or often by merely shifting production to the new product. This type of industrial inventory made by the private sector could

- 13 -

serve as the base for an industrial expansion program largely channelled through private development banks owned by responsible financial institutions, primarily on a local basis.

This type of institution should be actively supported by United States and European aid projects and by the international lending agencies. Through this credit structure the private sector should begin to impose upon itself the high business standards necessary for the free enterprise system to function. I have in mind corporate accounting practices, control of acts of directors and officers, relations with stockholders, etc. These standards may also be imposed by governments, but certainly the private sector should self-impose them where possible.

We could discuss at length each of the proposals I have made and we could, I am sure, think of others. What I have attempted to do, is to indicate to you that there are many areas in which the leadership groups existing today can prove to the societies to which they owe great responsibilities that they can still function as leaders and that they have the self-confidence to make it possible for new leaders to take their place.

Life is a process of constant evolution. We all grow old and pass on, but we must realize and appreciate that the society we see around us and which has so repeatedly created greatness, is the product of men of courage and imagination. Can we doubt for one minute that this generation of leaders is capable of giving the quality of dynamism within freedom to the society we shall pass on to our children ? If we act in full appreciation of our responsibilities and of our opportunities, those who are led, with dignity, will give us their loyalty and, more importantly, will give us the new blood and new strength for the constantly changing and working leadership cadre. We will then have achieved the dynamic society in freedom within our western, Christian system.

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Latin-American *Elite* continued from page 70

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consistent with the customs and
way of life of the country in ques-
tion. Without leadership, how-
ever, even this minimal material
obligation will not be met.

The same is true of political problems. In the U.S. we all but take for granted the virtues of representative democracy. We tend to forget that our political institutions work because ours is a nation whose standards of education as well as living are high, giving the majority a sound basis for choosing the "best." We also tend to forget that U.S. political institutions have undergone considerable evolution wherein the suffrage has been constantly enlarged. This whole process of evolution, no less than the founding of the republic itself, has depended heavily on citizens who took their political responsibilities seriously. Without an elite there would have been no republic.

Room at the top

Fundamentally we should in-
sist that society be so organized
that those with ability in every
field can rise to the top and make
their contribution to the social
process. This is particularly neces-
sary in our policy toward Latin
America, where leadership groups
have often tended to forget re-
sponsibilities and look only to
perquisites. It should be clearly
recognized that the appeal of the
enemy is not the material benefit
he offers, for the results of his ef-
fort in this regard have not been
impressive. Communism does,
however, offer to a new elite the
reins of power, and it also pro-
vides for the masses a doctrine
that seems to offer opportuni-
ty. Communism finds strength in
youth in Latin America largely
because youth has despaired of
entering the existing hierarchy at
a level consistent with its ability.

The U.S. will never meet this
challenge simply by pouring out
economic aid for the masses.
Rather we should counter the
Communist doctrine of the class
struggle with an approach that
emphasizes the rejuvenation of an
elite within a hierarchical concept
of rights and duties consistent
with our Western traditions. The
opportunities are enormous if this
point of view is pressed. Take the
matter of agrarian or land re-
form. Too often today this is a
mere demagogic slogan covering
up the confiscation of already pro-
ductive land. But agrarian reform

should mean providing the tools,
know-how, and credit to those in
each nation who show the cour-
age and dynamism to act as colo-
nizers of new land. Many under-
developed nations are only start-
ing their great struggle to provide
the basic minimum for their peo-
les to tame the wilderness. They
need help and financial assistance
of the proper kind. Programs for
taming new land should be or-
ganized locally by private agricul-
tural societies with the coopera-
tion of local governments. These
efforts would in turn get financial
support from the international
lending agencies. Land reform
and development along these lines
tend to better the morale of the
private groups themselves, prov-
ing that men are capable of band-
ing together for a common pur-
pose with community meaning.

Measure of success

Much can be done through the
formation of private develop-
ment banks in the underdevel-
oped countries. Once more this
movement may get assistance
from abroad, but it should begin
as a grass-roots effort. In addi-
tion, private enterprise and local
unions might well join to create
urban housing projects on a real-
istic basis, with some government
financial assistance. This would
establish a constructive relation-
ship between these two vital sec-
tors of the private economy.

These examples serve only to
point out the direction U.S. aid
and policy should take. The main
point is not to bypass the elite of
the underdeveloped nations but
to enlist its support. It is neces-
sary to state clearly that this is
no apologia for backward, stunt-
ed, and irresponsible leadership
groups in Latin America or any-
where else they have appeared.
What we are suggesting is that
the measure of our success will be
the extent to which we can force
the existing hierarchy to broaden
its base and to instill in it a true
feeling of responsibility. In many
nations the trend is already in
this direction. This trend must be
stimulated and helped, and wher-
ever an elite clearly indicates its
will to evolve and rejuvenate, we
must come to its support openly
and with vigor. We must set the
goal and prod and convince oth-
ers to continue to seek it. Patience
is warranted where we have at-
tained agreement on the road we
must travel.
END

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210 FORTUNE January 1963

# The Importance of Latin America's Elite

by Julio E. Nuñez

The time has come to do some rethinking of our attitude toward the problem of underdeveloped nations and the real cause for the continued spread of the Communist doctrine, especially in Latin America. Our present approach to these problems, as manifested in the Alliance for Progress program, is not showing results because it is based on fundamental errors of analysis. The great rallying cry of many Western governments and of the social revolutionaries among us is that the main solution to Communist encroachment is to eliminate poverty from the world, particularly in the underdeveloped countries. In my judgment, this is the twelfth-century tinkle of the Pied Piper.

Despite magnificent turns of phrase about the "revolution of rising expectations," this economic approach does not go to the fundamental cause of our inability to develop societies capable of facing the Communist onslaught. The battle in the world is not the struggle of the proletariat of Marx to establish the rule of the masses, for that is simply Leninist pap developed to dupe the socially conscious elite throughout the world. The real battle is between two elites, one confident of victory and based on an theistic disregard for the dignity of man, and the other an old, confused, ever weakening elite with its roots in divine Christian soil, but today in fast decay.

In order to see what must be done to achieve victory, we must examine the status and condition of this Western elite. We are not talking here of hereditary classes, which rarely exist, as a practical matter, in the modern world. We refer to those persons in each of our societies who by their leadership tend to move that society in all its broad aspects. This group, of course, should be a constantly changing and ever expanding

one based on an appraisal of merit consistent with the mores of the particular society involved.

Unquestionably, the Communists have understood our society much better than we ourselves. They clearly see that all societies by their very nature are moved by a relatively small group compared to the total number in that society. The concept of hierarchy is not medieval or political reaction, it is merely an acceptance of the human condition. Communism's gains have all too often been assisted by the disintegration of the leadership group within the country concerned. If we are to reverse the tide we must help the elite, in Latin-American countries in particular, recover its sense of confidence and mission.

## The lesson of Cuba

Cuba offers a tragic example of what happens when this sense of confidence has been undermined. There a leadership group that had become aware of its own corruption reached a stage of deep frustration from its inability to unite effectively to oust the corruption and immorality of the Batista regime from public life. During the period of 1955-57, democratic victory was assured if that elite had united behind the leadership of one man or group of men from among many available whose record and background all knew and could have confidence in. It was the measure of the venality, selfishness, and lack of vision of this group that such a unity was not attained.

At this juncture appeared an unknown person who showed courage and perseverance and who said he intended to do all those things that the elite knew had to be done. What they could not find among themselves, they purportedly found in Castro. Castro and his Communists knew perfectly well that the Cuban masses were not discontented; indeed, the workers supported Batista until the end. They saw their opportunity in the disarray and disgust of the elite and used it to their advantage. When you can convince those who run a society of the need to support you and turn their leadership over to you, it makes little difference what the masses think or feel.

Far from being a revolution of the masses, the Cuban tragedy was a betrayal of the elite in a society that had generated material plenty but had decayed morally and spiritually. And the victory of Castro has merely served to establish a new elite, much smaller and thus better policed than the old one, which rules by terror and by the awakening in the normally docile masses of those base appetites that are benign in a civilized Chris-

tian society. Once installed, the Communist dictatorship imposes a strict hierarchical rule and seeks support from the masses in the human urge to keep the status achieved, whether merited or not. The spark that may oust this dictatorship will not be the physical deprivation of the Cuban people, but the indomitable love of liberty and decency that people possesses.

## The wrong turn

While the Cuban situation is in some ways unique, it also carries some broad lessons for both developed and underdeveloped nations. Why is Western society facing such a grave crisis of leadership today? In my judgment, primarily because the elite has all too often lost sight of its duties and obligations and has no doctrine by which it can claim legitimacy. The enemy is constantly stressing the differences in wealth between the classes, the poverty and hunger that still exist, the lack of public morals, which over a period of time has created serious inroads in the thinking of men of good faith everywhere. Indeed, even the teachings of the modern Roman Catholic Church, taken out of their context by many Catholics and misunderstood by others, have served to increase a sense of guilt on the part of the leadership of our Western societies that finds no redemption. Many people are becoming convinced that it is immoral and unjust to form a part of an elite and that they represent an outmoded and oppressing force.

This feeling of guilt and reticence is certainly increased by the pronouncements of the governments of the developed Western nations, particularly the U.S., when referring to the problem of fighting Communism in the underdeveloped countries. In May of 1961 President Kennedy, for instance, proclaimed what he called the "freedom doctrine" in a congressional address. In it he pledged U.S. support for the revolution of the "rising peoples" who seek "an end to injustice, tyranny, and exploitation," and stated that this support would be forthcoming "regardless of which political and economic route they chose to freedom." This is not apt to encourage those who are attempting to promote sound limited government and free economies in less developed areas. In the same way various statements by the President's special adviser, Chester Bowles, and Teodoro Moscoso, head of the Alliance for Progress, encourage the view that Latin America consists of starving masses subjected by a very few representing the privileged classes. It is then implied that if poverty can be cured all will be well. In Latin America at any rate U.S. policy is all too often interpreted as one that bypasses the function of the elite completely. What the U.S. seems to be saying is that political democracy and economic justice will follow whatever happens to the existing hierarchy.

Yet this view of society is wholly erroneous and policies based upon it will lead us to the edge of an abyss. Few will question today the obligation of society to provide a basic minimum of worldly goods to its members,

continued page 210

> In the continuing debate on Latin-American policy, Julio Nuñez articulates a view that can be heard in certain intellectual and professional quarters below the border. It is a view that deserves more recognition in the U.S. Born in Cuba, Nuñez became an American citizen and holds a law degree from Harvard University. Between 1949 and 1956 he practiced law in New York and has served as U.S. attorney for the Southern District of New York and special assistant to the attorney general of New York. He currently lives in Buenos Aires, and is an executive vice president and director of Deltec Panamerica S.A., an international investment-banking house specializing in Latin-American finances.

70 FORTUNE January 1963

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