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 You are in: Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Office of the Historian > Foreign Relations of the United States > Johnson Administration > Volume XXXI
Foreign Relations, 1964-1968, Volume XXXI, South and Central America; Mexico
Released by the Office of the Historian
Documents 459-469

Paraguay and Uruguay

 

459. Telegram From the Department of State to the Embassy in Uruguay/1/

 

Washington, June 12, 1964, 12:47 p.m.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23–9 UR. Confidential. Drafted and approved by Mann. Mann briefed President Johnson on the situation in Uruguay, June 11; see Document 16.

 

480. From Mann. We note that Embtel 829/2/ reports your belief that if a golpe was in fact seriously contemplated it has been frustrated or effectively deferred and we approve of your decision to have Embassy officers quietly pass word around that United States is opposed to the violent overthrow of constitutional government. Hoyt will carry message from me to Yriart to same effect.

 

/2/ In telegram 829 from Montevideo, June 11, the Embassy provided details of an "alleged golpe." (National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23–9 UR)

 

It seems to us here the real course of rumors about golpes stems from basic dissatisfaction on the part of the Uruguayan people with inept way in which Uruguayan government has managed its affairs. Even before we received your telegram we had commenced study of suggestions United States might make to Uruguay re their unsatisfactory economic situation, but we wonder whether political reform is not also an essential ingredient of political stability.

 

Do you agree that there is need for single executive and if so what are Colorado and Blanco groups prepared to do so that country can move in an orderly fashion in this direction? What other political reforms should be taken by the Uruguayans while there is perhaps still time?

 

I recall that in case of Cuba posture of U.S. Government was one of unqualified opposition to dictatorship even to the point of denying Batista arms. Cuba enjoyed a privileged position in trade. Communist takeover nevertheless followed due, in my opinion, partly to disenchantment of Cuban people with a series of inefficient, ineffective and corrupt governments which had failed to fairly distribute wealth and were oblivious to needs of poor.

 

Maybe the best service we can make towards preservation of democracy in Uruguay is to make it work. How can we do this?

 

Rusk

 

 

460. Letter From the Assistant Secretary of State for Inter-American Affairs (Mann) to the Ambassador to Uruguay (Coerr)/1/

 

Washington, June 23, 1964.

 

/1/ Source: National Archives and Records Administration, RG 59, ARA/APU/U Files: Lot 67 D 468, Letters (Official–Informal) from and to Embassy Montevideo. Secret; Official–Informal. Drafted by Mann.

 

Dear Wym:

 

As you will have gathered from our telegram 480 of June 12,/2/ I am concerned by the present lack of leadership and drift in Uruguay. All of the danger flags seem to me to be flying high and I wonder whether there is anything that we can do to help the Uruguayans get things back on the track before we are faced with the prospect of a coup. I take it we still have some time.

 

/2/ Document 459.

 

Specifically, I have been wondering whether it would be productive or counter-productive for you, quietly and on a personal rather than an official basis, to plant the idea with your close personal friends that maybe the democratic elements in Uruguay might like, on their own initiative, to begin thinking in terms of amending the constitution so as to do away with the plural executive and restore the single executive. I understand from Hank [Hoyt] that one way to do this would be to obtain a two-thirds majority in both houses of congress, followed by a majority plebiscite vote in favor, as was done in 1951.

 

This is, of course, all very delicate and your judgment will be better than mine. It depends to a large extent on your judgment as to whether we would stir up any hornets nests by making such a suggestion, that is to say, whether any great body of opinion in Uruguay is still wedded to the side of a plural executive and whether out of such discussions this could emerge as a Uruguayan rather than U.S. idea. All of this is, of course, none of our business, but it does seem to me that it is difficult to think in terms of meaningful reforms and dynamic leadership which will be needed to get things going again in Uruguay unless it is constitutionally possible to have leadership. This would be only a first step to be sure, but it might be an indispensable step to make democracy work in Uruguay.

 

This was really the question behind my telegram 480. I don’t know whether the idea is any good at all but would appreciate having your views on this or any other thing we can do to help. If you think it would be wise, given the propensity for all Embassy messages to leak through the Foreign Office in Montevideo, for me to talk with Juan Yriart, I could undertake to do so. Another problem is that I don’t know whether Yriart has any political influence in Uruguay.

 

Hank reminds me that we have four congressional leaders who are coming up to look at our electoral processes in the fall. I don’t know whether it would be wise for me to ask questions, for example, of a group of this kind who are relative strangers. In any case, I would not wish to do anything without your concurrence.

 

Meanwhile, we are going to do everything we can to keep the dike of democracy up in Uruguay. But if the general situation continues to deteriorate, I suspect we will find ourselves in the same position as the little Dutch boy who was looking at more holes than he had fingers.

 

With best wishes,

 

Sincerely,

 

Thomas C. Mann/3/

 

/3/ Printed from a copy that bears this typed signature.

 

 

461. Telegram From the Embassy in Uruguay to the Department of State/1/

 

Montevideo, July 8, 1964, 6 p.m.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 15 UR. Confidential.

 

21. For Mann. Deptel 480./2/ I heartily agree that last month’s golpe scare stemmed chiefly from dissatisfaction with GOU’s inability act constructively on increasingly obvious economic problems, and that we must continue our intense and difficult efforts to help Uruguayan democracy to work in order our basic objective of maintaining Uruguayan independence. I also agree that Uruguay’s greatest weakness is political. We therefore tend naturally to think of political reform and specifically of the possible advantages, from viewpoint of USG objectives, of having Uruguayan reform their constitution to replace present collegiate executive with single executive. Our analysis must consider (1) constitutional basis of reform, (2) its political chances, (3) its theoretical comparative advantages, (4) its practical comparative advantages, (5) conclusion, (6) recommended U.S. action.

 

/2/ Document 459.

 

(1) Uruguayan constitution, section XIX chapter III, provides for amendment on initiative (a) of 10 percent of citizens inscribed in National Civic Register, (b) by proposal approved by two-fifths full membership General Assembly; either (a) or (b) then requiring approval by "absolute majority of citizens participating next national elections" and "this majority must represent at least 35 percent of all persons inscribed in National Civic Register", (c) approval of proposed amendment by absolute majority general assembly, subsequent approval by national constituent constitution called for purpose, and approved by electoral majority as above in special election.

 

(2) (A) Given comparative strength of Blanco and Colorado parties in relation to each other, and their internal fractionalization, it is very unlikely that either party could put through constitutional amendment against opposition of the other.

 

(B) Substantial elements of Blancos and Colorado would have to combine to achieve constitutional amendment, but this unlikely. At present Blancos expect to lose and Colorados to win 1966 elections. Blancos would expect to have greater power in collegiate than single executive system and in past have favored collegiate executive when they expected to lose. Although many Blancos now favor single executive in principle it appears at present they would refuse cooperation in seeking constitutional reform. Colorados traditionally have favored collegiate system and at present appear reluctant move toward single executive because they fear such move would increase their internal divisions. Probable Blanco opposition and Colorado reluctance gives reform little political chance.

 

(3) (A) Theoretical comparative advantages of collegiate versus single executive from U.S. viewpoint difficult to estimate. Weakness of collegiate system in which majority party is now fractionalized and lacks leadership are obvious. Question is whether single executive under conditions we assume will prevail after next general elections would be more advantageous to U.S. First and basic of these conditions would be continuation of law of "lemas." This system permits many different factions within each of two major parties participate in national elections and gives these elections character of simultaneous primaries and general elections. Within each party this system has effect of institutionalizing political cohabitation without agreement and gains electoral cooperation without promoting subsequent unity. (See A–356, December 14, 1963.)/3/ Post-election fractionalization in both parties is reflected not only in NCG but parliament.

 

/3/ In airgram A–356 from Montevideo, the Embassy analyzed the "Political Structure of Uruguay’s Traditional Parties." (National Archives and Records Administration, RG 59, Central Files 1964–66, POL 12 UR)

 

(B) Law of "lemas" is Uruguayan device (a) to preserve two major parties against otherwise probable danger they would split formally into multiplicity of minor parties as in other parliamentary systems, and (b) to avert civil strife between two major parties. It has served at least these two purposes with moderate success for many years. However, presumably it will also continue to facilitate fractionalization within parties regardless of whether executive is collegiate or single. Theoretically, single executive might be able to supply more leadership than collegiate, but on other hand it could also stimulate more opposition. Collegiate system worked with comparative efficiency when majority united under party boss in 1954–1958. (This boss was Luis Batlle whose policies left much to be desired from U.S. viewpoint.) Theoretical advantages and disadvantages about even or possibly shaded on side of single executive.

 

(4) So our immediate practical question must be to estimate nature of likely winner should there be single executive in 1966. Blancos at present appear unlikely to win. Among Colorados, most likely candidates would be:

 

Luis Batlle (age 67), long-time leader of list 15; General Oscar Gestido (age 62), present member NCG and acknowledged leader list 14; Zelmar Michelini (age 40) leader list 99. Among these three, Batlle and Gestido almost hopeless beyond repair as economic thinkers. Michelini intellectually able to think in economic terms, and politically promising, but reliability from U.S. point of view untried, and his competence as political boss dubious. Doubtful that present selection of candidates would produce single executive through whom we could pursue U.S. objectives as effectively as through collegiate system. Comparative practical advantage lies with collegiate system.

 

(5) Since theoretical comparative advantage of single executive at present appears slight and unsure, and immediate practical comparative advantage lies with continuative collegiate system, we do not recommend USG attempt work in favor of constitutional reform.

 

(6) (A) One set of conditions could change above estimate and recommendation. Although highly improbable, it is conceivable that the growing economic and political pressures may lead major factions within both Colorados and Blancos to agree on constitutional reform in 1966 elections. Should we see this process developing well among both parties we might discreetly attempt to help it along. However, for us to speak in favor of constitutional reform before such development would probably incur the heavy liabilities of U.S. involvement in a prime domestic political dispute and would be counterproductive in that it would enable the opponents of constitutional reform to attack it as U.S.-inspired.

 

(B) Under these conditions our basic courses of action must be to continue attempt identify and strengthen economically and politically constructive elements in Uruguay along lines LAPC. We are submitting specific course of action with revised LAPC, airpouching 10th./4/

 

/4/ The Embassy forwarded its proposed revisions to the LAPC paper in airgram A–14 from Montevideo, July 12. (Ibid., POL 1 UR–US)

 

Coerr

 

 

462. Memorandum From Robert M. Sayre of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)/1/

 

Washington, August 7, 1964.

 

/1/ Source: Johnson Library, National Security File, Country File, Paraguay, Vol. I, 1/64–8/68. Confidential.

 

The LAPC discussed Paraguay on August 6./2/

 

/2/ The minutes of the meeting have not been found.

 

Ambassador Snow reported a noticeable political liberalization in Paraguay. Public criticism of the regime is permitted in the press and otherwise, but it is cautious and not extensive. The general public is reasonably content with the political situation, and there is no serious agitation against Stroessner. Ambassador Snow said he had devoted considerable effort to determining the number of political prisoners, and found them highly exaggerated. He has concluded that there are no more than a dozen, give or take a few. He considers figures alleging that there are thousands of political exiles as fiction. He would put the figure at 600–700 at most, and of these he has been told by the Paraguayan Foreign Minister,/3/ that all but about 25 would be permitted to return to Paraguay unmolested. He reports police brutality as minimal, probably no more than in Mexico, or other Latin American countries in which he has served. He is concentrating his efforts on emphasizing respect for human rights, etc. None of this changes the fact that Stroessner is a dictator of the Odria or Somoza type. He is definitely not of the Trujillo, or Duvalier stripe, however.

 

/3/ Raúl Sapena Pastor.

 

There was general agreement on the line that we should treat the Paraguayan Government and its officials with respect, but that we should carefully avoid becoming identified with Stroessner, or lay ourselves open to the assertion that we "support" the Stroessner Government. Our line should be to the Government, and to opposition leaders, that our interests is in working with the Paraguayan people, and helping to improve their well-being.

 

On the economic side, Paraguay is doing reasonably well, and the economic situation is improving. We have a modest technical assistance program. We have made one small loan. The discussion was about expanding it. There was general agreement that we had an obligation to improve the Asuncion airport. An American firm did the engineering, the Eximbank loaned the money to build it, and an American firm did the construction. The airport is breaking up because of poor drainage. There was also general agreement that we might consider one or two other projects.

 

As a side light, Mr. Mann reported on his conversations with Senators Morse and Gruening on Haiti. He said he had laid out the possibility to them of being pushed out of Haiti by Duvalier unless we were a little more forthcoming. He inquired as to their attitude on approval of investment guarantees. Senator Morse thought we should go further and approve project loans. Senator Gruening agreed on investment guarantees, but asked that we keep it quiet. In sum, up against the hard realities, they come out about where we do.

 

As a result of the LAPC discussion, Ambassador Snow will submit a new paper on Paraguay, which as he put it, would "open the throttle a little" on AID assistance./4/

 

/4/ Not further identified.

 

RMS

 

 

463. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Mann) to Secretary of State Rusk/1/

 

Washington, December 1, 1964.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23–9 UR. Secret. Drafted by Hoyt on November 30. A notation on the memorandum indicates that Rusk saw it.

 

SUBJECT
Uruguayan Situation Report

 

Last June we called Ambassador Coerr on consultation because we were becoming increasingly concerned as to what might be done to make the Uruguayan economy and Uruguayan democracy work. Since then we have become even more concerned because the situation has deteriorated further and there have been for the first time in many years rumors of serious unrest in the Uruguayan military and the possible threat of a military coup. We hear that both Argentina and Brazil are also concerned over the situation in Uruguay and in fact that certain of the Brazilian military might be in favor of a coup should Uruguay fail to restrict the activities of Brazilian exiles (including former President Goulart and his brother-in-law, ex-Governor Brizola) now in Uruguay.

 

Factors leading to this serious situation are: the growth rate in recent years has been almost zero; the inflation rate has reached between 40 and 50% and the budget deficit is large and growing; Uruguay’s foreign exchange position is becoming precarious and wool exporters are pricing themselves out of the market. At the same time the nine-man collegium Executive is having great difficulty in reaching decisions and implementing them and the parties which elected them to power are fragmented and virtually leaderless after the death or absence from the scene of four of the leading politicians. Although the Uruguayan Development Council has come up with an excellent diagnosis of the country’s problems and what should be done about them, the government has not as yet taken the corrective action. Both our Ambassador and the Uruguayan Ambassador here believe that the measures necessary to improve the situation can only be taken by the Uruguayans themselves.

 

As a result of our concern, we telegraphed to Ambassador Coerr on November 25/2/ and his reply is contained in Tab A./3/ In effect he confirms the deteriorating situation and points out that there seemed to be two alternatives: (1) either a change by a coup or (2) a constitutional change on a basis which would provide an opportunity for the two traditional political parties to work more closely together on the country’s problems.

 

/2/ Telegram 278 to Uruguay. (Ibid.)

 

/3/ Telegram 519 from Uruguay, November 29; attached but not printed.

 

We agree with the Ambassador that a constitutional solution is the one which we should hope for and support. The military who have been mentioned as possible leaders of a coup are not qualified and probably would not have any significant civilian support. They would be opposed strongly by the well-organized Communists and a takeover by incompetent military could degenerate into further chaos and advantages for the Communists. On the other hand, constitutional reform will be slow and the situation may become so bad that those favoring constitutional reforms will not have time to bring them about. The Embassy points out, however, that the increasing political and economic pressures on the government and the increased rumors of a coup are bringing the politicians closer together on the need for constitutional reform, and that a solution along these lines is now more probable than heretofore.

 

The Embassy estimates that a coup is not imminent despite rumors and increased military preoccupation with the country’s problems. The military apparently have decided to meet with the nine-man Executive to impress on that body the need of getting on with the business of government. But, apparently most military do not favor a coup. Unfortunately, we have not seen much to indicate that the government is prepared to take the necessary action and an IMF representative who visited Uruguay last week states that there seems to be no competence nor understanding of economic problems within the upper echelons of government.

 

A series of strikes, inflation, and the worsening economic situation are increasing disillusionment within all sectors of Uruguay. Despite Uruguay’s reputation as a model democracy, and the general antipathy to a coup within the country, a spark from any of these incidents might touch off a wave of more popular support for a coup.

 

Our Ambassador has recommended that we start to give more attention to the movements for constitutional reform and judiciously support such movements without identifying ourselves with any particular plan. He also has recommended that he take this line with the new Brazilian Ambassador, and we concur, believing this might be the best channel to get word of our views back to the Brazilian Government and help forestall any move which the Brazilian military might be inclined to make towards supporting a Uruguayan military coup.

 

I wish you to be informed of this situation because while it might drag on for a long while (and the Uruguayans do have remarkable recuperative power), it also might degenerate fast and we might find a coup taking place. A coup in "model" Uruguay would have many repercussions throughout the hemisphere. Our main problem is that we can do little to help the Uruguayans. They are failing to make democracy work and the remedies lie almost exclusively in their own hands.

 

I attach as Tab B my reply to Embassy Montevideo’s telegram no. 519./4/

 

/4/ Telegram 284 to Uruguay, November 30; attached but not printed.

 

 

464. Special National Intelligence Estimate/1/

 

SNIE 98–65

 

Washington, June 17, 1965.

 

/1/ Source: Central Intelligence Agency, Job 79–R01012A, O/DDI Registry. Secret; Controlled Dissem. According to a note on the cover sheet this estimate was prepared in the Central Intelligence Agency with the participation of the intelligence organizations of the Departments of State and Defense, the National Security Agency, and the Federal Bureau of Investigation. The United States Intelligence Board concurred in this estimate on June 17.

 

THE SITUATION IN URUGUAY

 

The Problem

 

To assess the economic and political situation in Uruguay, the potentialities for extremist subversion, and the involvement of Brazil and Argentina, over the next year or so.

 

Conclusions

 

A. There is growing dissatisfaction with Uruguay’s present governmental system, particularly with its nine-man executive, the National Council of Government (NCG). This device, designed to prevent one-man or one-party rule, has also prevented effective governmental action to halt a steady economic deterioration marked by growing budgetary deficits, an accelerating inflation, a decline in real wages, and a banking crisis. (Paras. 3–9)

 

B. Within the period of this estimate, the NCG may be reformed by constitutional amendment, or there may be a credible prospect of the adoption of such an amendment in the general election to be held in November 1966. However, the political and legal obstacles to such a reform are great. Moreover, reform of the NCG would not, in itself, end the factionalism which characterizes Uruguayan politics or ensure effective action to cope with the economic situation. (Paras. 17–18)

 

C. In Uruguay there is already some apprehension of a military coup to alter the political system. We consider it almost certain that no such move is now imminent. If, however, the situation continues to deteriorate without effective remedial action by the NCG or a credible prospect of constitutional amendment, the odds in favor of a coup attempt will mount. If there should be a coup, it would almost certainly be initiated by non-Communists. If initiated by a President who had full military support, the actual takeover would almost certainly be quick and effective. Any other coup attempt would almost certainly encounter both military and popular resistance and might result in prolonged and widespread violence and disorder. (Paras. 19–21)

 

D. The Communists have no illusion that they could seize power in Uruguay in present circumstances. They are apprehensive of a rightist coup, however, and are preparing to stimulate popular resistance to one. In a confused and disorderly situation, their labor leadership and paramilitary capabilities could be an important factor. It is unlikely that they could gain a dominant influence, but, if they were to make a substantial contribution to the defeat of a coup attempt or to a democratic counter-coup, they would gain respectability and further political opportunities. (Paras. 10–14, 22)

 

E. Brazil is seriously concerned about the subversive threat which would result if Communists or extreme leftists were to gain power or important influence in Montevideo. Brazil would be reluctant to intervene militarily in Uruguay without US and Argentine concurrence and OAS approval, but would almost certainly do so if convinced that the situation there required it. (Paras. 22–25)

 

F. If Brazil were to intervene in Uruguay, the Argentine military would wish to intervene also. An incidental consequence might be the overthrow of the constitutional government in Argentina, if it did not sanction Argentine military intervention. If Argentina did intervene, it would almost certainly be in collaboration (rather than conflict) with Brazil. (Paras. 26–28)

 

[Omitted here is the 10-page Discussion section of the estimate.]

 

 

465. Memorandum of Conversation/1/

 

Sec/MC/12

 

Asunción, November 24, 1965, 10:25 a.m.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL PAR–US. Secret. Drafted by Snow and approved in S on December 16. Rusk stopped in Paraguay after attending the Second Special Inter-American Conference in Rio de Janeiro November 16–24.

 

SUBJECT
U.S.-Paraguayan Relations and Hemisphere Problems

 

PARTICIPANTS

U.S.
The Secretary
Ambassador Snow

 

Paraguay
President Stroessner
Foreign Minister Sapena Pastor
Acting Foreign Minister Gonzalez Torres

 

During the Secretary’s visit to Paraguay he was received by President Stroessner at the National Palace. At the beginning there were photographers and reporters in the President’s office as well as certain members of his staff, but as soon as the initial amenities had been exchanged, all present departed except the President, Secretary Rusk, the Foreign Minister (Raúl Sapena Pastor), the Acting Foreign Minister (Dionisio Gonzalez Torres) and Ambassador Snow.

 

Recalling his daughter Graciela’s visit to Washington in President Kennedy’s time, the President observed that she had told him of meeting the Secretary and of finding him to be a warm, gracious and unpretentious person. The Secretary was most welcome here, the President’s only regret being that the visit was of such short duration.

 

Secretary Rusk said that President Johnson would undoubtedly wish him first of all to convey to President Stroessner his appreciation for the sending of Paraguayan troops to the Dominican Republic. President Stroessner said that the Paraguayan people were true friends of the United States. Paraguay’s foreign policy, which had been consistent and unequivocal, was based on the same broad objectives as that of the United States. President Stroessner had from the outset favored the entry of U.S. troops into the Dominican Republic and his intention throughout had been to cooperate with the United States. Referring to Cuba as an example, he said that the Paraguayans realized the need of timely intervention on the part of other free countries against communist takeovers in the hemisphere.

 

Secretary Rusk said that at times we found it necessary, as in the Dominican case, to act without being able publicly to explain in full the reasons for our action. This was because of the sensitivity of intelligence information. The communists, in their insistent campaign to dominate the world, were constantly engaged in subversive plotting. In the Dominican Republic, Vietnam and the Congo they had had concrete plans of that nature.

 

President Stroessner, with further reference to the troops in the Dominican Republic, reported having received a special message from General Palmer, the American commander, to the effect that the Paraguayan troops were superb and that the President and the Paraguayan nation had every reason to be proud of them. The President said he understood and applauded the U.S. action in Vietnam, which was worthy of a great people like the Americans. Secretary Rusk informed him that since 1945 the U.S. had sustained 160,000 casualties worldwide in the cause of peace and freedom. As for Vietnam, we were faced with two essential alternatives: either we could withdraw and in so doing leave all of Southeast Asia open to conquest by the Red Chinese, or we could stand firm. The President could rest assured that we would stand firm.

 

The Secretary then commented on the encouraging degree of economic and social developments he understood had occurred in Paraguay and asked the President if he wished to comment on the subject. The President instead spoke for several minutes on political issues including certain leaders in the hemisphere whom he distrusted. The Brazilian general commanding the OAS forces in the DR had sent him word that the situation there was chaotic, that the provisional President was a communist and that the Minister of Justice was likewise. As for Juan Bosch, the President continued, he was a thoroughly contradictory man. Instead of thanking the U.S. and other OAS countries for having sent troops to preserve his country from communism, Bosch was actually advocating the seeking of an indemnity from the United States, Brazil and Paraguay. The President also believed it was a mistake to have caused the removal of General Wessin y Wessin from his command and political position in the DR. Wessin was a staunch anti-communist. It was likewise erroneous, the President continued, to assert as some did that Fidel Castro had "betrayed" the Cuban revolution. Castro had always been a communist and the Cuban revolution was strictly a communist affair from the start. People like Betancourt, who had given much aid and comfort to Castro in the early days, were the kind who now supported Bosch and misrepresented the Cuban revolution. The President also criticized "Pepe" Figueres on similar grounds, suggesting that he and these other Caribbean political figures were and had been unduly influential in Washington, and that in consequence the U.S. was being misled with regard to the Dominican Republic. Secretary Rusk doubted that the Figueres–Betancourt–Muñoz Marín group were currently asserting unusual influence. When they had offered their services earlier this year to the OAS as a sort of interim commission to administer the DR, the offer had not been accepted./2/

 

/2/ The final version of the memorandum eliminated the following sentence at this point: "Moreover, a Texas President in the White House was not likely to sit idly by while the communists took over the DR."

 

The President returned to the subject of the Paraguayan people. He described them as a homogeneous race, instinctively and thoroughly anti-communist. A while ago a delegation of Uruguayan leftists had come to Asunción to petition for the release of several communist prisoners being held by the Paraguayan Government. A group of Paraguayan citizens spontaneously staged an anti-communist demonstration in front of the hotel where the delegation was staying. Demonstrations in other Latin American countries were almost invariably pro-communist and anti-U.S., he reminded those present. According to FAO statistics, the people of Argentina, Uruguay and Paraguay were among the best fed in the world. Considering all children of primary school age, Paraguay had the highest percentage attending school of any country in Latin America. A hundred years ago, according to the Almanach de Gotha, Paraguay was the most developed country in South America. It was a great country then, a great country now and he felt deeply honored to be a Paraguayan. When the time came for dispatching troops to the DR, the only problem was of restricting the number because the troops all wanted to participate. One amusing incident had resulted in his allowing a young soldier to go with the contingent extra-complement.

 

The President next took up the question of the sugar quota, setting forth the Paraguayan position, pointing out that Bolivia for some reason had not only received a quota but had been given the prospect of an increase in the initial figure, whereas Paraguay had been entirely deprived of its previous quota. The Secretary frankly explained that the sugar quotas were worked out by the legislative branch of the U.S. Government/3/ in a complicated manner. By the time State Department officials and others had learned of what was happening to the Paraguayan quota, it was too late to influence the result because Congress was at that moment hastening to adjourn. President Stroessner requested that the U.S. examine the possibility of restoring a quota to Paraguay a year from now, the Secretary assured him that his request would receive careful attention.

 

/3/ The final version of the memorandum eliminated the following clause at this point: "—in what could be described as a confused atmosphere and—."

 

The President’s next topic was the need for more agricultural credit. This was not a rich country, he said, but it could be if its agricultural and human resources were developed properly. Such could only be done with an adequate volume of foreign credit. More money was needed now for the small Paraguayan farmer. By contrast, a rich country like Venezuela shouldn’t need outside help, although it appeared to be getting it. The Paraguayans did much with little; there was no misery here, even if there were many with very few material possessions. One should contrast conditions here with the slums in Caracas and elsewhere.

 

The Secretary stated that he had discussed the level of aid with Foreign Minister Sapena and Ambassador Snow. The U.S. would always be interested in knowing the President’s view of priorities in aid matters. President Johnson also was convinced, he said, that rural development was indeed of the utmost importance. If the combined efforts of all in this regard should prove inadequate, the world might possibly be facing a food crisis one of these days. The tendency in the developing countries had been to neglect the rural people in favor of industrial development.

 

Stressing the theme that inadequate attention had hitherto been paid to his views and his requests for U.S. aid, both military and economic, the President informed the Secretary that he had spoken many times about these matters to Ambassador Snow, but he was not certain that whatever the Ambassador had reported was reaching the top of the U.S. Government. He believed we were far more attentive to the pleas of such countries as Chile and Bolivia for example, both of which countries possessed very unstable political structures. The late President Kennedy, however, had seen fit to state publicly that the Government of Paz Estenssoro was a "model for the hemisphere". He (President Stroessner) had been told by Paz Estenssoro himself that Paraguay had the model government. President De Gaulle, President Castello Branco, General Ongania, an ex-Foreign Minister of Uruguay and others had assured him that he was a great president presiding over an exemplary government.

 

The Secretary assured the President that the U.S. Government intended always to give thoughtful attention to its relations with Paraguay.

 

The President took up the topic of arms assistance. "We Paraguayans," he said, "do not play our anti-communism for U.S. dollars. We will be anti-communist with the United States, anti-communist without the United States, or even anti-communist against the United States, if that ever should be necessary." The President then gave details regarding U.S. arms he had heard were being supplied to Uruguay and Bolivia, two countries which were receiving considerable military aid, whereas Paraguay was receiving very little indeed. All of the American military officers of the Southern Command in the Canal Zone assured him that the one and only obstacle was the State Department. The military officers referred to were in favor of much more generous treatment for Paraguay, but it was always the State Department which blocked their way. He could not understand this because Paraguay was just about the only country in the hemisphere which had remained consistently in support of U.S. policies, had not wavered from its anti-communist stand, had maintained a period of internal peace and growing prosperity for eleven years, had held its currency stable and had aroused the admiration of various other countries. In view of how things really were in Paraguay and of such testimony as he had previously quoted, he was curious to know just how the mind of the State Department really worked. He realized that people like President Johnson and Secretary Rusk were extremely busy people, but he thought that Paraguay should receive more attention at the top and more favorable treatment in general.

 

The Secretary said that if President Johnson were sitting where he was in President Stroessner’s office, the latter would quickly discover that President Johnson knew a good deal about Paraguay and the two chiefs of state would be talking like neighboring ranchers within a few minutes.

 

Before departing, the Secretary took occasion to express to the President his admiration for Foreign Minister Sapena Pastor as a highly competent colleague with whom it had always been a pleasure to work./4/

 

/4/ The final version of the memorandum eliminated the following sentence at this point: "The interview lasted approximately an hour and five minutes."

 

W.P.S.

 

 

466. Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, June 28, 1967.

 

/1/ Source: Johnson Library, National Security File, Country File, Uruguay, Vol. I, 1/64–12/68. Confidential.

 

Mr. President:

 

In the attached memoranda/2/ Bill Gaud requests your approval to negotiate a $15 million agriculture sector loan with Uruguay.

 

/2/ Attached but not printed are memoranda to the President from Schultze, June 24, and Gaud, June 15.

 

Our ability to negotiate such a loan now comes at a critically important time:

 

—President Gestido under the new constitutional system has the authority and purpose to resolve Uruguay’s serious economic problems./3/

 

/3/ On November 27, 1966, the Uruguayan electorate voted to replace the National Council of Government with a one-man presidential system. President Gestido assumed office on March 1, 1967.

 

—These problems were brought on by a decade of drift and unwise policies by weak collegiate governments which built up the income of the urban sector at the expense of the rural sector.

 

—Uruguay’s productive capacity is in agriculture and the solution to the problems must begin with modernization of policies and practices in this sector.

 

The conditions accompanying the loan require specific actions by the Uruguayan Government to remove the major disincentives to investment and production in agriculture. President Gestido has indicated willingness to take hard self-help measures. We have every reason to think that our conditions will be acceptable to his economic team and to him. In addition to the conditions, our negotiating position calls for release of loan funds in four tranches, each based on a prior review of performance.

 

Covey Oliver, Joe Fowler and Charlie Schultze have reviewed the loan package and recommend approval. I concur.

 

Walt

 

Approve/4/
Disapprove
See me

 

/4/ The President checked this option.

 

 

467. Information Memorandum From the Assistant Secretary of State for Inter-American Affairs (Oliver) to Secretary of State Rusk/1/

 

Washington, August 18, 1967.

 

/1/ Source: National Archives and Records Administration, RG 59, ARA Files, 1967–1969: Lot 72 D 33, Uruguay. Confidential. Drafted by Sayre and Sanders. A notation on the memorandum indicates Rusk saw it.

 

SUBJECT
Uruguayan Situation Report

 

The economic-political crisis in Uruguay is deepening. The situation might be described as a "crisis of confidence" which has affected members of the government, the two main political parties and the people. The crisis arises principally from the inability of the government to grapple effectively with the serious economic-financial situation confronting the country; spiraling inflation, budget imbalance, balance of payments problems, and the added burden of repairing the serious damage to the economy caused by inclement weather of the last six months. These problems in turn have given rise to social problems; i.e., strikes, work slowdowns, and communist agitation.

 

The ineffectiveness of the government is due to the indecisive nature of President Gestido’s leadership. Despite the hopes of Uruguayans and the USG, Gestido has been unable to rise above "politics as usual", and not being very clever politically, he has managed to alienate the largest part of his own Colorado Party. The political crisis of June 1967 illustrates this situation: Gestido’s reaction to an attack on his managing of the economic situation by the leader of the largest faction of the Colorado Party was to exclude that faction from his government, form a new government representing only a minority (one-third) of the Party and completely reverse his administration’s economic policy from one seeking an IMF-type solution to one of rigid controls.

 

We, however, share the Country Team’s doubts that a coup will be attempted in the short term. Gestido still has several options open to him both on political and economic fronts. Politically, he could broaden the base of his administration by coming to agreement with the leaders of other factions of the Colorado Party or alternatively he could form a coalition government with selected factions of the opposition Blanco Party. The Embassy continues to urge the administration to adopt a sound stabilization and economic growth as a basis for US and IMF support. If Gestido could bring himself to heed this advice, which he receives not only from us but from the majority of the members of his own political party, he could perhaps restore confidence in himself and his government.

 

Foreign Minister Luisi, Ambassador Yriart, other high Uruguayan officials, and we expected the present crisis when Gestido decided against a sound economic program and opted for controls and other economic measures that have previously been so ineffective. At the moment we see no other course open to us but to await sound Uruguayan policies which we can support. We have rejected the alternative of supplying US dollars to support an unrealistic exchange rate and inadequate economic policies.

 

 

468. Action Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, December 12, 1967.

 

/1/ Source: Johnson Library, National Security File, Country File, Uruguay, Vol. I, 1/64–12/68. No classification marking.

 

SUBJECT
PL 480 Agreement with Uruguay

 

Herewith a unanimous recommendation that you authorize negotiating a $19.3 million PL 480 agreement with Uruguay./2/

 

/2/ Attached but not printed are memoranda to the President from Schultze, December 7, and Gaud and Acting Secretary of Agriculture Schnittker, December 1.

 

Uruguay needs this assistance. The loan has been carefully coordinated with the Agricultural Sector Loan you authorized last June. The new Uruguayan President/3/ has pledged to support the economic recovery program launched by President Gestido which the PL 480 and Sector loans are designed to support.

 

/3/ President Gestido died on December 6; he was succeeded by Vice President Jorge Pacheco Areco.

 

I recommend approval.

 

Walt

 

Approve/4/
Disapprove
See me

 

/4/ The President checked this option.

 

 

469. Action Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, March 19, 1968.

 

/1/ Source: Johnson Library, National Security File, Country File, Paraguay, Visit of President Stroessner, 3/20–21, 1968. Confidential.

 

SUBJECT
Visit of Paraguayan President Stroessner

 

Tomorrow President Stroessner comes to Washington for a two-day official visit. Your participation is limited to:

 

11:30 a.m.—Welcoming Ceremony at the South Lawn.
12:00 noon—Office meeting with President Stroessner.
8:00 p.m.—State dinner.

 

A reception is being offered by the Paraguayan Ambassador at the Pan American Union on Thursday evening, but I advise against your attending.

 

President Stroessner is coming armed with a "shopping list" as he did at Punta del Este. Nick Katzenbach’s briefing memorandum (Tab A)/2/ describes what the items are. Most of them are for economic assistance, but there also may be a request for artillery. He may support the requests by possibly offering a Paraguayan army unit for Vietnam.

 

/2/ Tab A was a March 18 memorandum from Katzenbach to the President; attached but not printed. President Johnson met Stroessner at Punta del Este on April 13. In addition to presenting his "shopping list," Stroessner received an invitation to visit Washington after complaining that he was "developing a complex about it." Memoranda of conversation are in the National Archives and Records Administration, RG 59, Conference Files, 1966–1972: Lot 67 D 586, CF 151. A CIA assessment on "Stroessner’s Paraguay," March 1, is in the Johnson Library, National Security File, Country File, Paraguay, Vol. I, 1/64–8/68.

 

Nick counsels that you be non-committal on the offer of troops and handle the request for aid and military equipment by saying your advisers will study the requests and be in touch with him later. This is how his Punta del Este shopping list was handled—with good results.

 

The principal problem with this visit is President Stroessner’s image in certain circles as an old-style Latin American dictator and criticism of you for inviting him./3/ So far, we have had only one newspaper article striking this theme—in the Washington Post. The characterization is unfair to him and your purpose in having him up here.

 

/3/ In a memorandum to Rostow, March 18, Harry C. McPherson, Jr., Special Counsel to the President, anticipated the criticism: "I wish we weren’t entertaining Stroessner so soon after Bobby’s announcement. For better or worse, he has the militarist-oligarchist image that liberal Democrats have complained about for years; I imagine Bobby will attack his presence here as symbolic of what’s wrong with the Alianza, etc. ‘If Jack were in office, the White House would be entertaining Eduardo Frei.’ " (Ibid., Visit of President Stroessner, 3/20–21, 1968) On March 16 Senator Robert F. Kennedy announced his candidacy for President of the United States.

 

Stroessner has granted considerable political liberalization in recent years and is making steady headway with economic and social reform and development. The charts at Tab B illustrate this./4/ We want to encourage this trend. The suggested welcoming statement and toast (Tab C) are designed to put the visit in this context./5/ The press backgrounder will do likewise.

 

/4/ Attached but not printed.

 

/5/ Attached but not printed. For Johnson’s welcoming remarks and toast to Stroessner, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968–69, Book I, pp. 419–424.

 

The points we would have you stress in your talks with the Paraguayan President are:

 

1. that he continue political liberalization so that the principal opposition can function freely;

 

2. that he press forward with reform of budget and tax structures which CIAP has recommended as being of primary importance;

 

3. that we appreciate Paraguay’s help in the OAS and UN, where Paraguay is now a member of the Security Council./6/

 

/6/ According to the President’s Daily Diary Johnson met Stroessner in the Cabinet Room on March 20, 12:14–12:50 p.m. (Johnson Library) When Stroessner mentioned several requests for economic assistance, Johnson "expressed sympathetic interest and suggested that these be taken up with Secretary Rusk." (Memorandum of conversation, March 20; National Archives and Records Administration, RG 59, Central Files 1967–69, POL 7 PAR) Memoranda of his conversation with Rusk, March 21, are ibid.

 

W. W. Rostow/7/

 

/7/ Printed from a copy that bears this typed signature.

 


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