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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

(This is not an official statement of policy by the Department of State; it is intended only as a guide to the contents of this volume.)

Since 1861, the Department of State’s documentary series Foreign Relations of the United States has constituted the official record of the foreign policy and diplomacy of the United States. Historians in the Office of the Historian collect, arrange, and annotate the principal documents comprising the record of American foreign policy. The standards for the preparation of the series and the general deadlines for its publication are established by the Foreign Relations of the United States statute of October 28, 1991 (22 USC 4351, et seq.). Volumes in the Foreign Relations series are published when all the necessary editing, declassification, and printing steps have been completed.

The documents in this volume are drawn from the centralized indexed files of the Department of State and the decentralized Bureau, Office, and other lot files of the relevant Departmental units. The editors also make extensive use of Presidential and other papers at the Lyndon B. Johnson Library in Austin, Texas, as well as recordings of President Johnson’s telephone conversations. In addition, the volume includes records of the Central Intelligence Agency.

Almost all of the documents printed here were originally classified. The Information Response Branch of the Office of Information Programs and Services, Bureau of Administration, Department of State, in concert with the appropriate offices in other agencies or governments, carried out the declassification of the selected documents.

The following is a summary of the most important issues covered in each chapter. Parenthetical citations are to numbered documents in the text.

 

Summary

Regional

On November 26, 1963, President Johnson announced that relations within the Western Hemisphere would be "among the highest concerns of my Government." Three weeks later, Johnson delivered on this promise, giving Thomas C. Mann full authority to coordinate and direct U.S. policy in Latin America as Assistant Secretary of State for Inter-American Affairs, U.S. Coordinator of the Alliance for Progress, and Special Assistant to the President. (1) Mann’s appointment set the tone for U.S.-Latin American relations during the Johnson administration. The previous emphasis on the lofty ideals of the Alliance for Progress soon gave way to more mundane concerns, the prosecution of Cuban subversion and the promotion of U.S. business. (2) This change, however, did not go unnoticed. In March 1964, after a major presidential address on the U.S. commitment to the Alliance, The New York Times reported that Mann advocated a new policy, the "Mann doctrine," under which a dictator, for instance, would be judged principally on what he did to further American interests rather than on what he did in his own country. (10) The press also published reports that the President had "abandoned" the Alliance, a charge that Johnson actively countered by citing the public works record of the program. (13) Throughout his administration, President Johnson sought in vain for ways to "revitalize" the Alliance for Progress. (30, 43) In fact, while the Alliance may have initially "lost its way" under President Kennedy, it never recovered from his assassination.

Meanwhile, the Johnson administration was concerned by the threat of Cuban subversion in the Hemisphere, particularly as a result of an arms cache discovered on the Venezuelan coast in November 1963. (3, 4) After determining that the arms were of Cuban origin, the United States decided to seek sanctions against Cuba within the Organization of American States. (9) With the Venezuelan Government assuming the lead, the 9th Meeting of Foreign Ministers (OAS) approved a resolution in July 1964 requiring member states to suspend commercial relations with Cuba and recommending a corresponding break in diplomatic relations. By September, only Mexico continued to maintain diplomatic relations with Cuba. The resolution also established the legal basis for the use of military force against any future instance of Cuban intervention. (23) The threat of subversion, Cuban or otherwise, did not abate with the approval of formal declarations. In April 1965, the Special Group approved a plan to support a counter-insurgency group in Peru as a pilot project to meet the threat of Communist "wars of liberation." (28) Similar programs were subsequently established with U.S. assistance in Ecuador, Venezuela, Colombia, and Bolivia. In May 1967, a small Cuban guerrilla force was captured trying to infiltrate Venezuela, evidently justifying retaliation under the OAS resolution. (53) The OAS passed a new resolution condemning Cuba at the 12th Meeting of Foreign Ministers in September, but refused to take any military action. (64) The threat of Cuban subversion dramatically subsided, however, with the capture and death of Che Guevara in October. By March 1968, the Central Intelligence Agency concluded that Cuban insurgency was active in only three countries¾Colombia, Guatemala, and Venezuela¾and that in each case the movement, although troublesome, did not pose a serious threat to the government. (70)

The high-point of President Johnson’s involvement in Latin American regional affairs came in April 1967 with the Punta del Este conference. In October 1966, as political circumstances favored holding the conference, the Johnson administration began to debate the details of its summit program. (41) After encountering opposition primarily due to balance of payments concerns, the President approved a reduced economic assistance package designed to promote economic integration and other reforms throughout the Hemisphere. (48) One week before the conference, however, the Senate Foreign Relations Committee rejected a joint resolution indicating congressional support for the package, thereby casting a shadow over the administration’s entire Latin American policy. (49) The summit itself was somewhat anticlimactic; the only real drama came when Ecuadorean President Otto Arosemena Gomez publicly criticized the Alliance for Progress, a stance that was poorly received¾not least by President Johnson. (51) Although unable to turn Arosemena, Johnson was more successful in one-on-one meetings with other heads of state. (52) In fact, the strength of Johnson’s Latin American policy was also its weakness: he tended to see political affairs in terms of personal relationships. This tendency is more pronounced in the bilateral compilations of this volume.

Central America

The compilation on Central America deals primarily with bilateral relations between the United States and four countries: Costa Rica, Guatemala, Honduras, and Nicaragua. The documentation presented is not comprehensive but episodic, focusing on such matters as presidential elections and counterinsurgency efforts to illustrate the nature and extent of U.S. involvement with those countries. The United States has traditionally supported Costa Rican democracy, avoiding involvement in domestic politics including Presidential elections. The election of February 1966, however, proved an exception. The leading contender that year was Daniel Oduber, candidate of the Partido Liberacion Nacional. Although the PLN usually enjoyed an electoral advantage, Oduber faced a strong challenge from José Trejos Fernández, candidate of the National Unification Party. Oduber was concerned enough about the outcome that he sought support from an unusual source: Vice President Hubert Humphrey. In a meeting with Humphrey, September 15, 1965, Oduber said he needed outside assistance "for his campaign to be really successful." Humphrey evidently agreed to enlist "some labor friends of his." (79) Whether Humphrey actually delivered on this promise is unclear; Oduber, on the other hand, clearly believed that he would receive financial support from the U.S. Government. In early December, Oduber asked when the money would be forthcoming. As a result, the Johnson administration was suddenly forced to decide whether to intervene in the Costa Rican Presidential election. (81) In assessing the situation, the Embassy reluctantly concluded that "prospects for smooth transition to a new administration and the effective functioning of that administration would be best in the event of an Oduber victory." Trejos narrowly defeated Oduber in the February Presidential election.

Soon after becoming involved in the Costa Rican election, the Johnson administration faced the possibility of intervention in a more traditional place: Guatemala. In December 1965, the United States received reports that a right-wing military group might stage a coup d’etat against Colonel Enrique Peralta Azurdia. The coup leader, Colonel Miguel Angel Ponciano, was concerned that Peralta might block his candidacy in the Presidential election scheduled for March 1966. The coup was evidently defused when the Embassy told Ponciano that the United States supported free elections in Guatemala and opposed any attempt to overthrow the government by force. (84, 85, 87) On March 6, 1966, Julio Méndez Montenegro, candidate of the Partido Revolucionario, was elected President. Méndez reacted to the growing guerrilla threat in Guatemala by increasing the counter-insurgency campaign, a policy that the United States initially encouraged. By October 1967, however, U.S. policymakers began to debate whether Méndez had gone too far. The CIA concluded that Méndez was "in the hands of extreme rightists;" the Department of State believed that "the situation is not out of hand." (98) The debate became more urgent in January 1968, when terrorists assassinated two American military officers in Guatemala City. (99) On January 31, the Interdepartmental Regional Group for Inter-American Affairs decided that Méndez should be induced to suspend the counter-insurgency campaign. Ambassador Gordon Mein opposed the decision, arguing that Méndez had no alternative but to continue the effort. (100) At a meeting of the Senior Interdepartmental Group, May 16, Mein also argued that Méndez "with all his shortcomings, was preferable to any alternative now in sight." Assistant Secretary Covey Oliver recommended that the United States pressure Méndez to institute necessary reforms, using assistance as a lever to reward progress or punish retrogression. (109) The debate ended tragically on August 28 when Guatemalan terrorists assassinated Mein himself. (114, 115) In briefing the President on Mein’s death, Secretary of State Rusk concluded: "Despite the danger to some of our people, we’re not basically disturbed about the possibility the Communists could take over Guatemala." (116)

The course of U.S.-Honduran relations under President Johnson was set on October 3, 1963, when Colonel Oswaldo López Arellano overthrew President Ramón Villeda Morales. The Kennedy administration initially responded by suspending diplomatic relations. On December 14, the Johnson administration agreed to recognize the new government, but only after López promised to hold elections for a constituent assembly in February 1965. Unfortunately, U.S. policymakers soon discovered an obstacle to this plan: Ricardo Zúñiga Augustinius, Colonel Lopez’ right-hand man. In January 1964, the United States received reports that Zúñiga had already alienated not only the opposition Liberal Party but also key elements of the army, some of which were threatening to stage a counter-coup if he remained. In February, the Latin American Policy Committee approved a proposal to "seek ways to reduce the influence of Ricardo Zúñiga A." (72) Zúñiga, however, proved difficult to displace. In December, when the CIA offered to "undercut" Zúñiga, the Department of State doubted that the proposed action was "worthwhile at this late date." On February 16, 1965, Zúñiga and the Nationalist Party won a majority in the constituent assembly. (74) Three years later, little had changed: Zúñiga was still in power; the United States wanted to reduce his influence. On April 2, 1968, Ambassador John Jova reported that Zúñiga had used "repressive gangster tactics" in the key municipal elections, producing a lopsided result that was an embarrassment to everyone involved, including the United States. (104) When Jova returned for consultation in June, the Interdepartmental Regional Group for Inter-American Affairs decided that the United States "should not become involved in pressing for Zuniga’s ouster, but if internal pressures for his removal build up in Honduras, the USG may be able to use its influence discreetly to help nudge him out." (108) Zúñiga, meanwhile, decided to return the favor. In a meeting with Secretary of State Rusk, October 3, Zúñiga accused the Embassy of improper interference in Honduran affairs, implying that the Ambassador should be recalled. Rusk agreed to investigate the matter, but refused to recall Jova without a formal declaration that he was persona non grata. (117) In a subsequent meeting with Jova, Zúñiga denied any intention of recall and pleaded that "we work together closely for the development of Honduras and good relations between our countries." (118)

In 1967, the United States reached a turning point in its long history of involvement in Nicaraguan affairs: the election of General Anastasio Somoza Debayle. Following a policy of strict neutrality, the Johnson administration neither supported Somoza’s candidacy nor blocked his succession. In early January, when a Nicaraguan lawyer informed the Embassy of plans to prevent Somoza’s election, he was "given a healthy slug of our hands-off treatment." (90) The coup attempt, nevertheless, proceeded as scheduled. At a rally in Managua, January 22, Fernando Agüero Rocha, the opposition candidate, called on the National Guard to overthrow Somoza, thereby ending 30 years of authoritarian rule. The plan miscarried as the National Guard clashed with anti-Somoza demonstrators in a bloody street fight, forcing Agüero to take refuge¾and hostages¾in a large hotel. (91) The ensuing siege was resolved on January 23 as the Embassy mediated a settlement between Agüero and the government. (93) Two weeks later, General Somoza won the general election, the third and final Somoza to become President of Nicaragua. Shortly thereafter, Ambassador Aaron Brown recommended cooperating with the new administration by continuing to provide economic assistance, even though the press might charge that the United States was "embracing militarist dictators." (95)

Argentina

Under President Johnson, U.S.-Argentine relations got off on the wrong foot. In October 1963, President Arturo Illia annulled the contracts of U.S. oil companies operating in Argentina. The Kennedy administration initially responded by slowing economic assistance to Argentina, a tactic eventually adopted by Assistant Secretary Tom Mann as the official, yet unspoken, policy of the Johnson administration. Mann justified the "slow-down" policy by citing the sanctions of the Hickenlooper amendment, which stipulated that the President suspend assistance to any country that expropriated property of U.S. citizens or corporations without proper compensation. (121, 122, 123) In spite of efforts to negotiate a settlement, the status of the oil companies remained unresolved by June 28, 1966, when the Embassy reported that military plotters had forced Illia’s resignation and were forming a junta under Lieutenant General Juan Carlos Onganía. The Department of State instructed the Embassy to do nothing that might imply recognition of the junta while maintaining "discreet informal contact" for informational purposes. (132) On June 29, the Interdepartmental Regional Group for Inter-American Affairs recommended that the United States withhold recognition until the Onganía regime stated its intention to honor international obligations, restore civil liberties, and return to constitutional government. The IRG/ARA also suggested that the Embassy suspend any bilateral programs that required official contact. The President approved the proposal. (135) Although reporting "feelings of repugnance," the Embassy recommended on June 30 that the United States recognize the new government following a "decent interval" for consultation. The Department replied that diplomatic relations would be restored if the junta issued a public statement of its commitment to democracy and civil liberties. (137) On July 7, Acting Secretary George Ball received the President’s approval for standby authorization: if Onganía issued a public statement of his democratic intentions, the United States would extend recognition by July 9; otherwise, the United States would postpone recognition until several days thereafter. (139) On July 9, Rostow informed the President that the regime had refused to issue the statement, forcing the United States to delay plans to restore diplomatic relations. (140) The United States recognized the military government on July 15, 1966. (141)

Bolivia

The compilation on Bolivia concentrates on two issues: covert subsidies to the MNR party and the hunt for Ernesto "Che" Guevara. In August 1963 and January 1964, the Special Group approved two requests for financial support to the party of President Victor Paz Estenssoro. The purpose of the program was to "overcome the emergency situation which existed in Bolivia at that time and, once the situation normalized, to enable Paz to consolidate his control." (147) On November 4, 1964, Paz was ousted in a military coup d’etat by his Vice President, General Rene Barrientos Ortuno. (151) Three months later, the 303 Committee authorized a financial subsidy to the MNR under Barrientos to help establish an organizational base for the Presidential election scheduled for September. (153) After the regime postponed the election in May 1965, the 303 Committee agreed in July to provide additional financial support, in spite of criticism from the Department of State. The Committee’s Executive Secretary admitted that there was "no magic formula," but recommended "working along with Barrientos as the only semi-competent available." Additional funds were authorized in March 1966 for MNR propaganda and political action in support of the ruling Junta’s plans to pacify the country and hold elections to establish a civilian, constitutional government. (158, 160) Barrientos won easily when the election was held in July, and officials concerned with the covert operation concluded that the objectives of the program had been accomplished. (161)

In March 1967, Barrientos requested U.S. assistance in the search for Cuban-led guerrilla forces operating in Bolivia. The United States agreed to help train and equip a Bolivian ranger battalion for this purpose. In May, the CIA reported that the guerrillas were led by Che Guevara, and Walt Rostow, the President’s Special Assistant, forwarded the information to President Johnson who maintained a strong interest in subsequent reports on Guevara and the Bolivian effort to defeat the guerrilla movement. (163, 164) The following month, the Department of Defense sent a Special Forces team to Bolivia to train a second Bolivian ranger battalion in anti-guerrilla tactics. Defense also provided ammunition, rations, and equipment, including helicopters. In addition, CIA contract personnel provided training in intelligence collection and accompanied the Bolivian ranger battalion in the field. (166) On October 8, the Second Ranger Battalion captured Guevara; the next day he was executed on direct orders from the Bolivian Army, despite the advisers’ attempt to prevent the execution. These advisers provided on-scene reports of the execution to Washington. (171)

Brazil

In November 1963, U.S.-Brazilian relations were at a critical juncture. The Kennedy administration had been troubled by the leftist leanings of President João Goulart; the Johnson administration shared this concern. According to a contingency plan prepared in December 1963, if the Brazilian military overthrew Goulart, the United States would assume a "constructive friendly attitude" while pressing for a "quick return to constitutional democratic processes." The Department of State doubted, however, that the military had "any really substantial capability or will to mount a coup to overthrow Goulart." (181) The key figure on the American side¾both in assessing Goulart’s intentions and in developing a strategy to deal with his actions¾was Ambassador Lincoln Gordon. At a meeting with Assistant Secretary Tom Mann in January 1964, Gordon called Goulart "childish and erratic" and foresaw the "possibility of a Goulart coup followed by an eventual commie takeover." (182) On February 20, Gordon warned Goulart himself of "growing Washington concern at increasing open and favored Communist influence in Brazil." Goulart remained unconcerned, leading Gordon to fear for "domestic tranquillity here in coming months." (183) At the chiefs of mission conference in mid-March, Gordon expressed hope that the "ship of state" would stay afloat until the election in October 1965, but was prepared for the worst. In this regard, he noted the importance of maintaining good relations with the Brazilian military. (185)

In an important telegram, March 27, Gordon concluded that Goulart was engaged on a campaign to seize dictatorial powers with Communist support. Gordon also reported the "most significant development" of the crisis: General Humberto Castello Branco, the Army Chief of Staff, had agreed to lead the military resistance to Goulart. In order to avoid a dictatorship on the left, Gordon urged that the United States throw its support to the right by: a) supplying the Castello Branco group with arms and petroleum (POL); and b) sending a naval task force to the South Atlantic for psychological effect or, if necessary, overt intervention. The decisive moment, he estimated, could come "tomorrow or any other day." (187) At a meeting to discuss the telegram on March 28, U.S. officials approved the POL delivery but delayed any decision on other measures pending further justification from Gordon. (188, 189, 190) On March 29, Gordon explained that the situation had become even more critical, heightening the need for arms and the naval task force. (191) To make matters worse, Army Attaché Vernon Walters reported on March 30 that the coup appeared imminent. (192) Later that evening, Secretary of State Dean Rusk agreed to send the task force, including a barge for a possible "semi-clandestine arms drop." Rusk briefed the President on developments, reading the text of a draft telegram to Gordon. Johnson indicated his approval with the comment: "don’t let it [Brazil] go communist." (193) After stressing the importance of legitimacy for the coup, the telegram asked Gordon to assess whether the crisis presented "an opportunity which might not be repeated." (194)

Before Gordon could respond, the Embassy reported on the morning of March 31st that the "balloon" had gone up. (195) As the Brazilian military moved against Goulart, U.S. policymakers tried to keep pace, approving Gordon’s recommendations, including the assembly of 110 tons of ammunition to be shipped by plane. (196, 198) Meanwhile, Gordon sent his assessment: "this might not be last opportunity, but well might be last good opportunity to support action by anti-Goulart group." (197) To facilitate the decision-making process, the Department established a teletype link with the Embassy in Rio de Janeiro. Later that afternoon, Under Secretary George Ball briefed the President on the latest intelligence, in particular, information received in a recent teletype conversation with Gordon. After the briefing, Johnson said: "I think we ought to take every step that we can, be prepared to do everything that we need to do, just as we were in Panama, if that is at all feasible." (199)

At a meeting the next morning (April 1), the President heard a different story: the situation was improving; key elements of the army had joined the revolt; Gordon did not recommend any immediate U.S. support. (202) By mid-afternoon, Gordon reported that the "democratic rebellion" was already 95 percent successful. Although Goulart remained at large, the only issue appeared to be when to recognize the new government. (203) In the early morning of April 2nd, the Brazilian Congress declared that Goulart had fled the country, that the presidency was vacant, and that the President of the Chamber of Deputies, Ranieri Mazzilli, was now acting President of Brazil. According to his own account, acting Secretary Ball responded quickly to this news by sending a telegram which, in effect, recognized the new government. (204) At a noon meeting of the National Security Council, the participants were reduced to debating whether the Mazzili Presidency was legitimate since, contrary to previous reports, Goulart had yet to flee the country. (206) Later that afternoon, however, Gordon reported that "democratic forces" had eliminated the last pocket of military resistance and that Goulart had finally arrived in exile at Montevideo. Johnson, therefore, approved a congratulatory message to Mazzilli, formally acknowledging the legitimacy of the new regime. (207)

As the new regime established its authority, the United States was faced with a government that was, and would continue to become, authoritarian. On April 10, Gordon expressed "considerable dismay" at the promulgation of the so-called Institutional Act, which allowed the military to suspend the political rights of any individual for 10 years. At first, Gordon allayed his fears by reasoning that the "greatest hope for avoidance of undemocratic excesses rests in character and convictions of Castello Branco," who was elected President by Congress on April 15. (211) Gordon then turned his attention to providing financial assistance to boost the Brazilian economy: in June, the Agency for International Development approved a $50 million loan to Brazil for balance of payments assistance; six months later, AID authorized an additional $250 million in project and program loans. (214, 215, 216) When Castello Branco issued a second institutional act in October 1965, however, Gordon described the decision as a "severe setback" to hopes that Brazil was on the road back to "full constitutional normalcy." (220) Rusk applauded Gordon’s stance, but refused to issue a public statement of regret, preferring to exercise U.S. influence in private. In this vein, Rusk asked Gordon how the United States might persuade Castello Branco to reverse this "apparent commitment to increased authoritarianism." (222) Although he undoubtedly considered this request, Gordon soon reported that the situation had markedly improved as a result of a public relations campaign to "expound positive aspects and purposes of revolution." (223) On December 11, President Johnson approved a $150 million program loan for Brazil. (224)

By December 1968, when the military government issued a fifth institutional act, much had changed: Gordon, after briefly serving as Assistant Secretary, returned to private life in July 1967; the same month, Castello Branco was killed in an airplane crash, shortly after leaving the Presidency to General Arturo da Costa e Silva. But in many respects, the course of U.S.-Brazilian relations remained the same. When the Embassy recommended issuing a statement "deploring the setback in development of Brazilian democracy," the Department declined, citing several factors which "lead us to avoid expressing excessive unhappiness officially and publicly." (236, 237) In a memorandum to the President, January 13, Walt Rostow explained that the United States was temporarily withholding any new commitment of economic assistance "until the struggle between the moderates and radicals in the army is resolved." Meanwhile, Rusk recommended leaving "this important decision for the next Administration." (244)

Chile

Throughout the 1960’s, the U.S. Government had one primary objective in Chile: to block the Presidential ambitions of Senator Salvador Allende Gossens, perennial candidate of the leftist Popular Action Front (FRAP). U.S. policymakers soon realized, however, that opposing Allende was not enough, that the United States would have to support a candidate with the political base to win the pivotal election of September 1964. For its part, the Kennedy administration preferred Senator Eduardo Frei Montalva, candidate of the Christian Democratic party; in April and August 1962, the Special Group approved a $230,000 program of assistance to the Christian Democrats. The Johnson administration, on the other hand, initially favored Senator Julio Durán Neumann, the Democratic Front candidate, agreeing in December 1963 to provide $20,000 for Durán’s campaign. (245) Assistant Secretary Mann planned to increase financial support for Durán¾and cut the subsidy to Frei¾reasoning that Durán was "more pliable" on economic matters, particularly with respect to the American copper companies in Chile. (247) By mid-March, Mann was forced to reconsider when Durán temporarily dropped out of the race following a poor showing by the Front in the congressional by-election at Curicó. Although anxious to avoid "panicking as a result of Curico," the Johnson administration quickly switched allegiance to Frei. (248) On April 2, the Special Group approved a $750,000 proposal to defeat Allende, primarily through covert assistance to the Christian Democratic Party. (250) By the end of the summer, the Special Group/303 Committee had agreed to provide an additional $2,250,000. (258, 262, 267) Covert assistance to Frei was only part of a "Government-wide program of action" to defeat Allende, a program which also included $55 million in program loans from the Agency for International Development; $42 million in assistance under the Food for Peace (PL-480) program; and a propaganda campaign, pursued overtly by the United States Information Agency and covertly by the Central Intelligence Agency. (253) While employing every means at its disposal, the Johnson administration decided to discourage intervention from American business interests, fearing that such action, if publicized, would be a "kiss of death" for Frei. (257) When Frei finally defeated Allende on September 4, U.S. policymakers privately claimed credit for the outcome. The CIA, for instance, doubted that Frei’s campaign "would have progressed as well as it did without this covert U.S. Government support." (269)

After the election, the Johnson administration debated whether¾and by what means¾to continue its anti-Allende campaign. When the CIA first recommended covertly assisting the Christian Democrats in the 1965 congressional elections, Mann objected, arguing that the proposal would be "intervention." (273) Nevertheless, in February 1965, the 303 Committee approved a proposal to provide funds to selected candidates. The following month, the primary beneficiary of the program, the Christian Democratic Party, won a decisive victory in the election. (277) Three years later, the same party and its leader, President Frei, were struggling to regain lost ground. In fact, the political situation in Chile had become so polarized that there were few moderates left for the United States to support by covert or other means. In July 1968, the 303 Committee approved a plan to provide financial support to individual "moderate candidates" in the 1969 congressional election. Although supporting the proposal, the Department of State acknowledged "a real possibility" that the new Congress would be dominated by leftist parties, a development which might well lead to the election of a pro-Communist President in 1970, i.e. Salvador Allende. (304, 306)

Meanwhile, the United States faced another fundamental question in its Chilean policy: was it possible to be pro-Frei rather than merely anti-Allende? At first, the answer appeared to be "yes." In November 1964, the United States agreed to give Chile $80 million of program loan assistance for 1965 (274, 275, 276) The Frei administration, however, actively opposed U.S. intervention in the Dominican Republic in May 1965, leading President Johnson to suggest a "siesta" for economic assistance to Chile. (278) The following month, U.S.-Chilean relations were further strained by revelations regarding "Camelot," a U.S. Army research project of internal security in Chile that quickly made an unfavorable impression throughout Latin America. (279, 280) In November 1965, the situation reached a breaking point as Frei increased the export price of copper produced in Chile, undermining U.S. efforts to contain inflation in the wake of the Vietnam war. When the White House recommended forcing Frei to rollback the price increase, Ambassador Ralph Dungan warned that the plan would be "political suicide for the U.S. in the developing world and particularly Latin America." (282, 283) In spite of the warning, President Johnson sent Ambassador at Large Averell Harriman to negotiate a settlement with Frei in Santiago. (284, 285) After several days of tense negotiations, Frei agreed to a rollback in the U.S. market price in exchange for a $10 million increase to the $80 million program loan already under consideration. (286, 287, 288) The Johnson administration, however, never granted another program loan of such magnitude to Chile. (289, 295, 307)

Colombia and Ecuador

The compilations on Colombia and Ecuador present two sides of the Alliance for Progress, the carrot (Colombia) and the stick (Ecuador). After Brazil and Chile, the Johnson administration provided more economic assistance to Colombia than any other country in Latin America. This support, of course, came with strings: the Colombian Government had to enact a series of "self-help" measures, including fiscal and currency reforms. (310, 311) When President Guillermo Leon Valencia hesitated to cooperate, Assistant Secretary Tom Mann complained that he, Valencia, did not "know anything about running a country." (312) By November 1965, Valencia evidently knew enough to take appropriate action, including a currency devaluation, thereby allowing the United States to extend a $65 million program loan. President Johnson, however, only reluctantly agreed to the loan. (317) One year later, Colombia had a new President, Carlos Lleras Restropo, who, according to Special Assistant Walt Rostow, was "a sophisticated economist and more able political leader than his predecessor." This time, Johnson approved a $100 million program but first asked "if we really want to blow that much on Colombia." (322) In fact, the United States "blew" another $58 million on the program loan to Colombia in 1968. (325)

The story in Ecuador reveals the effect that personality can have on foreign policy. In April 1967, President Otto Arosemena Gómez publicly criticized the Alliance for Progress at the Punta del Este Conference, refusing to sign the joint declaration of the assembled Presidents. Although his performance was considered "off-base," the Department of State initially adopted a policy of patience for Arosemena. (330, 51) This patience was not shared by President Johnson. When several agencies recommended providing PL-480 assistance to Ecuador in September, Johnson balked, noting: "I haven’t forgotten Punta del Este." (332) Assistant Secretary Covey Oliver eventually managed to overcome the President’s objections by promising to tell the Ambassador that the United States was tired of "Ecuadorean griping." (333, 334) Arosemena, however, continued to complain, leading Oliver to conclude that he, Arosemena, had "flunked his course." (335) In addition to temporarily suspending loan negotiations with Ecuador, Oliver agreed that Ambassador Wymberley Coerr should defend the Alliance for Progress in a speech on October 6. (336) On October 7, the Ecuadorean Government reacted to the speech by requesting that Coerr be immediately recalled. (337) After acceding to this request, the Johnson administration decided to retaliate quietly, freezing economic assistance and refusing to replace Coerr until Arosemena left office in September 1968. (338, 339)

Mexico

No country in Latin America was closer to Lyndon Johnson’s heart than Mexico: he often reminded visitors from Mexico that he not only taught in the Mexican school in Cotulla, Texas, but also spent his honeymoon in Mexico City. Johnson’s interest south of the border is perhaps best revealed in his visits with Presidents Alfonso López Mateos and his successor, Gustavo Díaz Ordaz. López Mateos was the first Latin American head of state that Johnson met; Díaz Ordaz was the last. (346, 366) Not counting the Punta del Este Conference, Johnson met the President of Mexico eight times¾i.e., more than all the Presidents of South America combined. At the first meeting, in February 1964, President Johnson told López Mateos that "relations between the United States and Mexico had never been better." (346) Johnson was undoubtedly right. After the recent agreement to transfer Chamizal to Mexico, the only outstanding issue in relations between the two countries was the salinity problem¾and in January 1965, the United States and Mexico signed an agreement for a practical solution to the salinity of the Colorado River. (353)

Panama

Panama was the site of the Johnson administration’s first major international crisis. On January 9, 1964, Panamanian students protested after their American counterparts flew the U.S. flag at a high school in the Canal Zone, a clear violation of an agreement to avoid such provocation. Before the end of the day, rioting broke out in Panama City as Zone police and U.S. military forces faced an angry Panamanian mob, encountering heavy sniper fire. (367) At a White House meeting the following morning, President Johnson decided to send a high-level delegation to Panama headed by Assistant Secretary Tom Mann to seek a temporary resolution to the crisis. In addition to the safety of Americans in the Canal Zone, Johnson and his advisers were concerned by intelligence reports of Communist involvement in the riots, possibly backed by Cuban leader Fidel Castro. (368, 369) After the meeting, Johnson telephoned the Panamanian President, Roberto Chiari, to discuss the situation. Although sympathetic to the need to avoid more violence, Chiari demanded that the United States agree to revise its claims to the Panama Canal, particularly under the Hay-Bunau-Varilla Treaty of 1903. (370) During several meetings with Chiari in Panama City, Mann explained that the United States would not negotiate "structural revisions" to the relevant treaties under duress¾and would ignore such Panamanian threats as the "suspension" of diplomatic relations. Mann offered, however, to discuss areas of mutual concern, including the Canal, once Panamanian authorities managed to quell the riots. Chiari agreed to restore order but, without a firm agreement to negotiate a new treaty, formally broke diplomatic relations after Mann’s departure. (372, 375)

Meanwhile, the United States and Panama appealed to the Organization of American States to mediate a settlement through its Inter-American Peace Committee (IAPC). On January 15, the IAPC announced that an agreement had been reached to resume relations and discuss "all existing matters of any nature which may affect the relations between the United States and Panama." Soon after this announcement, Chiari claimed that the United States, by indicating a general willingness for discussion, had actually agreed to negotiate a new Canal treaty¾a claim that the Johnson administration quickly and categorically denied. (379, 380) For several months, officials on both sides continued to argue whether they would negotiate specifics or discuss generalities, an argument that was closely monitored with little success by the OAS. On April 3, the OAS finally announced that the United States and Panama would: a) reestablish diplomatic relations; and b) designate Special Ambassadors to "seek the prompt elimination of the causes of conflict between the two countries without limitations or preconditions of any kind." (409, 410) After 8 months of "discussion," Johnson publicly stated on December 18 that the United States was prepared to negotiate a new Panama Canal treaty, but would also seriously consider a sea-level canal through Nicaragua, Colombia or Costa Rica as an alternative. (420, 421)

Although the United States studied the feasibility of a sea-level canal, its primary value lay in pressuring Panama to conclude a reasonable agreement on the existing canal. By June 1965, the U.S.-Panamanian negotiators concluded that the issues involved would require separate treaties for the existing canal, the proposed sea-level canal, and U.S. military base and related defense rights. The Johnson administration was also prepared to: a) recognize Panamanian sovereignty over the canal; b) establish joint management for its operation; and c) set a fixed expiration date, thereby revoking the controversial perpetuity clause of the original treaty. (423, 425, 426) On September 24, after extensive Congressional consultation, President Johnson announced that the two sides had reached a general agreement along these lines. (429) The details, however, were not resolved until June 1967 as the Panamanian Government repeatedly postponed ratification of the treaties for various political reasons. As a result, the Panama Canal treaties of 1967 were initialed but never signed. (442)

The primary cause for the delay was the Panamanian election of May 1968. The opposition candidate, Arnulfo Arias of the Panameñista Party, had been elected President twice before¾and both times was ousted before finishing his term. Although undoubtedly a popular figure in Panama, Arias was not popular where it mattered most: the National Guard. In fact, the leadership of the National Guard openly supported the official candidate, David Samudio, fearing that Arias would actively interfere in their affairs. (443, 444, 445) Before the votes were officially counted, the Johnson administration sent an informal emissary to emphasize the importance of democratic elections to the Guard Commandant, Colonel Bolívar Vallarino. (447) On May 30, Arias was confirmed as the next President of Panama. (446) On October 9¾8 days after Arias’ inauguration¾the United States received reports that the National Guard was seriously considering a coup d’etat before Arias could remove several of its key leaders, including Lieutenant Colonel Omar Torrijos. The Department of State instructed the Embassy to warn the conspirators that the United States fully supported the constitutional government in Panama, and that a coup would endanger current levels of military assistance. (448) In spite of the warning, the National Guard, led by Torrijos, overthrew Arias on October 12. (449) One month later, after encouraging Arias to leave Panama, the Johnson administration recognized the military government. (453, 455)

Paraguay/Uruguay

This compilation documents U.S. relations with two governments at opposite ends of the political spectrum: a stable dictatorship (Paraguay) and an unstable democracy (Uruguay). The Johnson administration supported General Alfredo Stroessner, the long-time President of Paraguay, but did so with some reservation. In August 1964, U.S. policymakers stressed the importance of working with the Paraguayan people while avoiding undue identification with Stroessner himself. (462) Stroessner, on the other hand, was careful to support U.S. policy in the Hemisphere. In 1965, he backed U.S. intervention in the Dominican Republic by sending troops; Secretary of State Rusk subsequently visited Asuncion to express President Johnson’s appreciation. (465) At the Punta del Este Conference in April 1967, Stroessner requested a more tangible form of gratitude as he presented Johnson with a "shopping list." Stroessner eventually received not only items from his list but also an invitation to visit Washington. Before the visit in March 1968, Special Assistant Walt Rostow decried the public image of Stroessner as "an old-style Latin American dictator," citing his recent record on political liberalization as well as social and economic reform. (469)

Uruguay presented the United States with a different set of problems. Although long considered the most stable democracy in Latin America, Uruguay had been ruled since 1951 by a political experiment, the so-called National Council of Government (NCG). Arguing that the NCG had failed to provide effective leadership, Assistant Secretary Mann suggested in June 1964 that the United States encourage Uruguay to return political authority to a single executive. (459, 460) Ambassador Wymberley Coerr initially advised against the proposal, contending that U.S. involvement would incur such "heavy liabilities" as to be counterproductive. (461) By December, as the political situation in Uruguay continued to deteriorate, Coerr agreed that the United States should advocate a constitutional solution, especially since the only alternative appeared to be a coup d’etat. (463) In November 1966, the Uruguayan electorate voted to replace the NCG with a one-man Presidential system. This constitutional change, however, did not lead to a corresponding change in the political situation. U.S. policymakers now complained that President Oscar Gestido was too indecisive to take the steps necessary to warrant an increase of economic assistance. (467)

Peru

When President Johnson took office, U.S.-Peruvian relations were complicated by one issue: the status of the International Petroleum company, a subsidiary of Standard Oil of New Jersey. In October 1963, President Fernando Belaúnde suspended negotiations with the company regarding the oil field at La Brea y Pariñas, suggesting some form of confiscation, or outright nationalization, of the property. The Kennedy administration initially responded by linking the level of economic assistance to progress in the IPC case, a tactic eventually adopted by Assistant Secretary Mann as the official, yet unspoken, policy of the Johnson administration. Mann justified this "policy of restraint" by citing the sanctions of the Hickenlooper amendment, which stipulated that the President suspend assistance to any country that expropriated property of U.S. citizens or corporations without proper compensation. (470, 478) As a result, aid to Peru under the Alliance for Progress lagged far behind such neighboring countries as Brazil, Chile, and Colombia, which received massive assistance to promote stable government. In February 1966, the Johnson administration sent Walt Rostow, then Counselor and Chairman of the Policy Planning Council, to Peru in an attempt to resolve the impasse. In the resultant quid pro quo, Belaúnde agreed that IPC operations would not be impaired during his administration, while Rostow agreed that the United States would resume "normal aid relations." (475, 476, 477)

Although both sides generally adhered to this agreement, the assistance program was further imperiled in the summer of 1967 as Belaúnde seriously considered a proposal to purchase supersonic jet aircraft from France. The Johnson administration demanded that Peru drop the proposal as contrary to the Alliance for Progress¾and likely to encounter opposition in the U.S. Congress. If Belaúnde conceded the issue, Peru could purchase F-5 fighter aircraft from the United States at a later date; if not, Peru would have to do without the pending $40 million program loan. (485, 490) To make matters worse, at the same time Belaúnde faced legislation in the Peruvian Congress to expropriate IPC holdings. (486, 487) On July 25, Ambassador J. Wesley Jones told Belaúnde that the program loan depended on a favorable outcome in both the IPC and aircraft cases. Rather than submit to these conditions, Belaúnde decided to forgo the loan altogether. (491) By October, reports suggested that Belaúnde was in serious political trouble, including the imminent possibility of a military takeover. The Johnson administration concluded that Belaúnde needed the program loan more than ever but that the U.S. Congress would oppose such assistance if Belaúnde insisted on acquiring supersonic aircraft. (497) For several months, the Department of State vainly tried to convince Belaúnde to cancel or otherwise circumvent the French contract. (500, 501, 502)

In August 1968, the situation initially improved as Belaúnde announced a settlement in the IPC case, thereby removing "this dangerous matter from U.S.-Peruvian relations once and for all." (504) The IPC settlement, however, soon became a destabilizing element in Peruvian internal affairs, threatening both the President and the constitutional process. (506) In light of these developments, Belaúnde urgently requested U.S. assistance on September 18, including swift approval of several project loans. (505) Before the Johnson administration could respond, Belaúnde was overthrown on October 3 by a military junta led by General Juan Velasco Alvarado. (508, 509) As the Department of State debated recognition of the new regime, Velasco issued a decree expropriating IPC property in Peru, including the oil field at La Brea y Pariñas. (513) On October 18, the Embassy warned the revolutionary government that expropriation without proper compensation would invoke the economic sanctions of the Hickenlooper amendment. (517) In spite of the complications resulting from the IPC case, the Johnson administration recognized the new government on October 25. (518, 520)

Venezuela

U.S.-Venezuelan relations during the Johnson administration revolved around two issues: Cuban subversion and Venezuelan oil. Several important instances of Cuban intervention in Venezuelan affairs are documented in the regional compilation, including the discovery in November 1963 of a Cuban arms cache and the capture of a small Cuban guerrilla force in May 1967. President Raúl Leoni also raised the Cuban issue at the Punta del Este conference in April 1967, asking President Johnson to provide military equipment for 10 new anti-guerrilla battalions. Johnson indicated a willingness to help, and, after some bureaucratic infighting, an agreement was signed the following month. (50, 541) The American reaction was not as positive, however, in November 1968, when¾less than 2 weeks before its Presidential election¾Venezuela seized a Cuban fishing boat in international waters for alleged subversive activity. In lieu of any evidence of subversion, the Department of State advised Leoni to "cool it," especially since a conflict with Cuba could have "international repercussions." Although disappointed by the absence of U.S. support, the Venezuelan Government maintained its stance until after the election when it admitted that no proof of subversion had been found. (545, 546, 547)

Throughout the 1960’s, Venezuela sought to improve the position of its oil in the American market, particularly in response to the restrictive measures of the Mandatory Oil Import Program (MOIP) of 1959. Negotiators attempted to resolve the issue in 1965, but in December the United States revised the MOIP without addressing Venezuelan concerns. The Leoni administration responded by instituting new regulations on residual fuel oil, a measure designed to increase revenue by raising the price of exports to the United States. (526, 527, 530) Fearing the inflationary effect of the increase on the U.S. balance of payments, the Department of State sought to reverse the decision without success. (533) President Johnson had a more personal reaction: "I want somebody that’s smarter than Venezuela." (534) The Venezuelans were smart enough, however, to know when they had the Americans over a barrel. The Americans returned the favor during the Six-Day War in June 1967, when the Arab oil embargo threatened to disrupt supplies to Western Europe. Although Venezuela hoped the crisis would lead to better treatment of its exports under the MOIP, President Johnson wrote Leoni that "the crisis in the Middle East has made it even more difficult to envisage changes in our oil import program." (541, 542)


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