Foreign Relations of the United States, 1955–1957, American Republics: Multilateral; Mexico; Caribbean, Volume VI

195. Memorandum of Discussion at the 240th Meeting of the National Security Council, Washington, March 10, 1955¹

Washington, March 10, 1955

Present at the 240th meeting of the Council were the President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; Brig. Gen. R. W. Porter, Jr., for the Director, Foreign Operations Administration; and the Director, Office of Defense Mobilization. Also present were Mr. H. Chapman Rose for the Secretary of the Treasury; the Director, Bureau of the Budget; the Chairman, Atomic Energy Commission (for Item 3); the Director, U.S. Information Agency; the Secretary of the Army, the Secretary of the Navy, and the Acting Secretary of the Air Force (for Items 5 and 6); Assistant Secretary of State Holland (for Item 5); the Chairman, Joint Chiefs of Staff; the Chief of Staff, U.S. Army, the Chief of Naval Operations, the Chief of Staff, U.S. Air Force, and the Commandant, U.S. Marine Corps (for Items 5 and 6); the Director of Central Intelligence; the Assistant to the President; Robert Cutler, Joseph M. Dodge, and Nelson A. Rockefeller, Special Assistants to the President; the Deputy Assistant to the President; Dillon Anderson, NSC Consultant; Robert R. Bowie, Department of State; the White House Staff Secretary; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a summary of the discussion at the meeting and the main points taken.

[Here follows discussion of items 1–4, “Coordination of Economic, Psychological and Political Warfare and Foreign Information Activities,” “Significant World Developments Affecting U.S. Security,” “Peaceful Uses of Atomic Energy,” and “U.S. Objectives and Courses of Action in Korea.”]

5. Report by the Vice President on Latin American Trip

The Vice President opened his remarks by commenting that while Latin American affairs might seem to the Council to be “small potatoes” as compared to the weighty subjects thus far discussed, the Council must never make the mistake of taking Latin America for granted. It was, after all, our own back yard, and it offered enormous potentials to the United States for good or for ill, depending on whether the right or the wrong people were in control of the other American republics. To illustrate his point, the Vice President reminded the members of the Council that the Communist Party of Cuba contained more members than the Communist Party USA. The headquarters of the whole Communist movement in the Americas was located in Mexico, and the experience of Guatemala was still fresh in our memories. What had happened in Guatemala would have been much worse for the United States if it had occurred in Mexico or in Cuba. Finally, we should never forget that once one of these countries succumbs to Communist control, it would prove very difficult indeed to remove that control. It was better to anticipate than to regret, and an ounce of prevention is worth a pound of cure.

The significance of Latin America, continued the Vice President, had been well put to him by Ambassador Cabot Lodge just prior to the Vice President’s departure. While he cautioned that of course this was not for publication, the Ambassador had stated that if we did not have the Latins with us in the voting processes in the UN, the United States would simply have to get out of the United Nations.

From an economic point of view, the Vice President pointed out, the Latin American republics were our best customers in the whole world. From the point of view of population their significance to us was often overlooked because we are not accustomed to thinking of them as a great military force. Nevertheless, the rate of population growth in Latin America was highly significant. It amounted in fact to approximately twice the rate of the world growth of population. Potentially this factor was a great force for good or for ill from the point of view of the United States.

Generally speaking, the Vice President said, the first concern of the United States with the Central American republics related to the maintenance of their political stability and to the continuation of peace among these nations. The outlook for the first of these objectives was on the whole pretty fair. Honduras, for example, was now appearing as a rather bright spot in the picture. The new chief of state of Honduras² impressed the Vice President as an exceptionally good man who was running a very good show.

While, said the Vice President, he did not have time to mention all the various countries, he did wish to say a word about Panama at this point. The assassination of President Remon was one of the most genuinely unfortunate things that could have occurred in that country, since Remon was one of the best Presidents that Panama had ever had. Fortunately, his successor, Arias, seemed also a pretty decent sort. He was strongly oriented toward the United States, and seemed to be reasonably able. Accordingly, Panama might well succeed in pulling out of its economic depression and manage to remain on a fairly stable course.

The Vice President said that he could hardly fail to make some mention of the affair between Nicaragua and Costa Rica, which was essentially a rather ridiculous business. What was involved in this dispute was no clash between the interests of the populations of the two countries, but essentially a personal feud between two men, neither of whom was quite big enough to run his own country and both of whom were ambitious to run all the other countries in the Caribbean area. The Vice President illustrated this generalization with anecdotes concerning Figueres and Somoza.

The Vice President then went on to describe briefly his efforts to get these two gentlemen together to patch up their quarrels. This had not worked out completely, since Figueres had said that under no circumstance and at no time would he agree to meet with Somoza and bury the hatchet. After two literally night-long sessions with Somoza and Figueres, he had finally induced them to issue public statements to the effect that neither would try to overthrow the other, and that both would work for peace in Central America.³ The Vice President earnestly hoped that this would be realized. In any event, he was inclined to rely a little more on Somoza than on Figueres, for the good and sufficient reason that Somoza really desires to do what the United States wants him to do. Figueres, on the other hand, merely wants to do what he thinks most advantageous for himself.

Summing up the first point—namely, the political outlook for the area—the Vice President described it as relatively calm, with no external wars and no internal revolutions on the horizon.

The Vice President then said he would turn briefly to the problem of the economic stability of the area, on which, of course, its political stability was based in so large a degree. The Vice President confessed to having been somewhat confused in his ideas on this subject in advance of his actual trip, but that in the course of his journey he had succeeded in sorting out his views with much greater clarity.

In the first place, by all odds the most important consideration in developing greater economic stability in the area was to increase trade. Fortunately many of the major products of the Central American republics were items not produced by the United States—coffee, for example. Other products, unfortunately, were produced in the United States and were, accordingly, competitive. However, the necessity for providing markets in the United States for the Latin American republics was crystal clear, and the United States must try to reduce trade barriers to assure the continuation of such U.S. markets. If these markets were assured, economic progress would almost certainly follow. On the other hand, if the markets in the United States for Latin American products were restricted, the effects in Latin America could well prove devastating. The Vice President illustrated this general point by a specific reference to Cuban sugar, pointing out that historical statistics showed that Cuba was able to purchase American manufactured goods in direct proportion to Cuba’s ability to sell sugar in the U.S. market. It was a good thing even for politicians, as all of those around this table were compelled to be, to realize that trade was a two-way street.

The second main contribution to increasing economic stability in Latin America was the provision of adequate capital. The Vice President said he wished particularly to stress the provision of private capital, and he said he was glad indeed that our current Latin American policy put such heavy emphasis on private capital and private enterprise, both with respect to capital from the United States and indigenous private capital in the other American republics. He indicated that he would subsequently offer specific recommendations on this subject in his written report on his tour.

The other major source of the necessary capital was, of course, government capital in the form of grants and gifts. On this point the Vice President was emphatic in his insistence that the policies enunciated by the representatives of the United States at the Rio Conference were the correct policies. Even Trujillo, who in many respects left much to be desired as the head of a state, had remarked to the Vice President that grants and gifts simply made beggars and loafers.

The Vice President went on to point out that our policy respecting loans to Latin American countries was to direct the Export-Import Bank, one of the two chief lending agencies, to intensify its lending program within the safeguards specified in our policy. The Export-Import Bank, however, has not done this, and it is vitally important for the Bank to follow the directives set forth in the policy and make as many sound loans as possible. We had promised precisely this at the Rio Conference, and we must deliver on our promises. This is the only way to avoid recourse to grants and gifts. The Vice President indicated that he would likewise have recommendations subsequently on this subject.

[Here follows discussion of the Mexican petroleum industry and the Inter-American Highway.]

The Vice President indicated that his report would not be complete without some reference to the situation in Guatemala. The tragic situation in which this small country found itself was a conspicuous monument to Communist failure, and it was too bad that this fact had not as yet been effectively exploited by the United States. Guatemala had endured ten years of virtual Communist government. That government had made every sort of promise to its unfortunate subjects. It had redeemed none of them, and had proved itself completely inefficient and wholly corrupt. It had even destroyed the moral and spiritual liberties of the people of Guatemala, not to mention the committing of numerous atrocities. Relief that this government had now disappeared was widespread in Guatemala. Accordingly, the Vice President said, it seemed plain to him that the United States was now provided with an opportunity to accomplish in two years in Guatemala what the Communists had completely failed to accomplish in ten years. There was plenty of land available on which to settle a population which was vigorous and able. Indeed, 60% of the land of Guatemala was government-owned.

The President of Guatemala⁴ had impressed the Vice President as a good man with good intentions. Perhaps the best evidence of this fact was that his enemies were almost invariably to be found either on the extreme right or the extreme left wing. He had said to the Vice President, in effect, “Tell me what you want me to do and I will do it.” For this if for no other reason we must not allow the new government in Guatemala to fail. We had good possibilities of succeeding in Guatemala and of holding up to the world the picture of our success. The thing to do, therefore, was to intensify our loan policy in Guatemala, and to step up our exchange and technical assistance program.

[Here follows discussion of United States personnel in Central America and the Caribbean and communism in Cuba and Mexico.]

The National Security Council:

Noted and discussed an oral report by the Vice President on his recent trip to Latin America.⁵

[Here follows discussion of item 6, “Report by the Secretary of State on the Formosan Situation,” printed in volume II, page 345.]

S. Everett Gleason

1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted by Gleason on March 11.
2. President Julio Lozano Diaz.
3. An account of Nixon’s talks with Figueres and Somoza is in despatch 480 from San José, March 3. (Department of State, Central Files, 033.1100–NI/3–355)
4. Carlos Castillo Armas.
5. On March 11 Nixon reported to the Cabinet on his tour of Central America and the Caribbean. The minutes of this meeting, drafted by Minnich, are in Eisenhower Library, Whitman File, Cabinet Meetings.