Office of the Historian

10. Telegram From the Department of State to the Embassy in the Dominican Republic1

Washington, July 23, 1964, 7:10 p.m.

69. Joint State/AID. For Ambassador from Mann. Your 62.2

I very much appreciate having your thorough and well-balanced assessment of the current Dominican picture and future prospects there. My staff and I have given a great deal of thought to the complexities of the situation and to the proposal you have made. We are in general agreement that our interests will be served to the extent that we can reinforce the Dominican governmentʼs determination to put the countryʼs financial house in order. We agree that a meaningful statement in support of the upcoming effort to accomplish this would be [Page 30] productive and that the statement should: (1) detail what we are doing now to be helpful and (2) outline in specifics the program being evolved for the near and mid-term future to complement the effort of the Dominican government as it is carried out.

A statement aimed at accomplishing this is being transmitted separately.3 It has been designed to overcome problems we see in minor aspects of the proposal you have made. I want to discuss these problems in this message.

We feel that any statement made should originate with the Embassy. It could be released here simultaneously as an Embassy statement. Reidʼs desire to have the President associated with his effort is understandable but we are not prepared to recommend that the President commit himself. GODR has not yet demonstrated through performance that we would be justified in tying ourselves to a figure.

We cannot at this time justify approval of a $25 million program loan to the DR. Even though disbursements under such a loan would be tied to sound performance as you suggest, it has been our experience that once an announcement of this kind is made, it is all but impossible to stick with the terms as time passes. Unexpected elements enter the picture and pressures mount for release of funds “committed” to cope with “unanticipated crisis situations”. Additional major element of uncertainty is impact of stand-by implementation on future balance of payments deficit. Knowledge that funds are available for disbursement very often weakens the resolve of prospective recipients to implement the measures to which they have committed themselves. These and other reservations seem particularly pertinent in the Dominican context. It is therefore our feeling that it would be prudent to avoid associating a dollar figure with a statement of our conditional, future intentions. When the Dominicans have pressed us here for an overall dollar figure, we have responded that there are no specific limitations on future US assistance. We are prepared to look with sympathy and serious intent at any proposal which contributes to the attainment by the Dominican people of the goals of the Alliance for Progress and which will not be counterproductive to the Dominican austerity program. A similar response could be used by the Embassy when this question is raised by Reid and others, including the press.

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As our proposed statement reflects, we hope shortly to add $4 million in AID funds to the Treasuryʼs $6.25 million for immediate use of the GODR in dealing with its balance of payments problem. Although no counterpart pesos for the AID program will be generated by the $6.25 million from Treasury, the $4 million in AID funds will generate pesos which can be so applied, while future projects are developed and processed.

We believe this method of approaching the overall problem has several distinct advantages. (1) We are substantially forthcoming now for impact purposes. (2) Our future intentions are stated in specific terms but without tying us to a fixed dollar figure. (3) We maintain maximum leverage for the future in dealing with an individual and a government not notably resolute or effective.

I believe this response to your recommendations represents the most workable and realistic course of action under the circumstances and hope that it meets with your approval. Please let me know.4

Rusk
  1. Source: Johnson Library, National Security File, Country File, Dominican Republic, Vol. I, 6/64–4/65. Secret; Priority; Limdis. Drafted by Crockett; cleared by William D. Rogers (AA/LA), Anthony Solomon (ARA), and Robert W. Adams (ARA); and approved by Mann.↩
  2. Document 9.↩
  3. Telegram 68 to Santo Domingo, a joint State/AID message, July 23, authorized the Embassy to announce at the conclusion of negotiations that the Governments of the United States and the Dominican Republic had concluded agreements for loans totaling $10.25 million in support of the stabilization program. The Embassy should also announce that the two governments were reviewing various short–and long-term projects to further improve the economic and social development of the Dominican Republic. (National Archives and Records Administration, RG 59, Central Files 1964–66, FN 1–1 DOM REP)↩
  4. The Embassyʼs response has not been found.↩