16. Memorandum From Robert M. Sayre of the National Security Council Staff to the President's Special Assistant (Dungan) ¹1. Source: Johnson Library, National Security File, Country File, Dominican Republic, Vol. II, 1/64–4/65. Secret. A copy and the attachment were sent to Bundy.

Washington, October 15, 1964.

• SUBJECT
• Dominican Republic

I have been following the Dominican situation closely, but in view of your memorandum of October 10 to Desmond FitzGerald,²2. In this attached October 10 memorandum to Desmond FitzGerald of the CIA, Dungan recalled his earlier request for the latest information on “Communist infiltration to the D.R.” Dungan wrote that he now “understood that the Agency had verified the presence of a significant number of Communist activists who were not in the D.R. several months ago … [and that he] would be very interested to know what, if anything, the U.S., through your Agency or otherwise, was doing to: (1) monitor this activity, (2) control it, and (3) perhaps eliminate it.” Dungan concluded: “As you know, this is part of my deeper concern with what I believe is a drift in U.S. policy in the D.R. I do hope that you and your colleagues will continue to push for clarification of U.S. policy and short term objectives in the D.R.” I thought I ought to do some more specific checking.

I find a little more optimism on the Dominican situation than there has been for some time. This apparently stems from two factors:

a. Donny Reid recently had a confrontation with the Trujillista element in the armed forces (San Cristobal group) and bested them. He thereby strengthened himself within the government and with the Dominican people. Since the San Cristobal group was supporting Balaguer, this confrontation also hurt Balaguer's position. Balaguer feels it, and is toying with the idea of returning to the DR. He has also talked about going via Haiti. His reasoning on Haiti is hard to see, but it would create tension between the DR and Haiti and probably blowup any chance of an improvement in relations, which the OAS is trying to work out. The end result would probably be to strengthen Reid even more.

b. Reid is carrying out an economic stabilization program with vigor. AID, State and the IMF were all pessimistic about the chances of pulling this one off. IMF doubted the wisdom of even starting, and leaned toward devaluation instead. There is some hope now that the program may work.

I do not find anyone really confident about the Dominican situation. There are only a few Dominicans qualified to help run the government. When you are that thin, it does not take much to upset everything.

AID is working on a program which will probably cost $15 million in 1965. Its main thrust is in agriculture—the idea is to put more money in the farmer's pocket; cut imports of foodstuffs and save foreign exchange; and possibly improve exports and earn some foreign exchange.

The question of Communist strength is a mixed up one, and not as urgent as either of the two factors above. When the Government broke up the guerrilla movement and killed a number of its leaders, it dealt a severe blow to Communist strength. It also deported a number of activists—in fact got rid of two more last week. At the same time, some are coming back. The only explanation at the moment seems to be that they are from “good” families in the Dominican Republic and the Government has not resisted the pressure from these families. Nevertheless, Ambassador Bennett raised the issue with the Dominican Government last week. His [less than 1 line of source text not declassified] has put together a list of those that have filtered back, and both the Ambassador and State plan to urge the Government to take necessary precautions.

Robert M. Sayre ³3. Printed from a copy that bears this typed signature.