Foreign Relations of the United States, 1948, The Western Hemisphere, Volume IX

810.24/7–3048

The Secretary of State to Diplomatic Representatives in the American Republics

confidential

Washington, July 30, 1948.

Sirs: This Government has received numerous requests from Latin American governments for United States military and naval equipment additional to the equipment already supplied them under the “interim program”. To the end of standardizing armaments by providing Latin American governments with reasonable and necessary amounts of military equipment, the State and Service Departments have made every effort to comply with these requests. Following adjournment of Congress, which took no action last session on the Inter-American Military Cooperation Bill, the situation was reviewed by the State and Service Departments. It has become clear that because both adequate legislative authority and further surplus supplies are lacking, the transfer of any more armaments from government sources to the other American republics will be virtually impossible, until Congress passes necessary legislation.

The so-called “interim program” of arms transfers, first offered to other American republics in the early part of 1946,¹ will be completed for all countries. Certain actual deliveries under this program are still to be made, but all commitments therefor have been entered into. Practically all of the transfers in the “interim program” were made under authority of the Surplus Property Act of 1944.² During the last days of its recent session, however, Congress incorporated in the Supplemental Independent Offices Appropriation Act of 1949 a provision³ which prevents the further disposal as surplus of any property located in the United States which was not declared surplus prior to the approval of that Act (June 30, 1948). Thus no further transfers of arms can be made from United States stocks under the Surplus Property Act of 1944.

The situation for each of the Service Departments is described below:

Department of the Army

In the absence of new legislation, and in view of the virtual termination of the surplus property program as described above, the Department of the Army has no adequate authority to transfer military equipment to Latin American countries. In a few instances, the Department of the Army has made equipment available to Latin American countries under Public Resolution 83, of 1940.⁴ However, equipment sold under this legislation is limited to coastal defense and anti-aircraft items and must be sold at cost.

Even if adequate legislation were presently available, the Department of the Army would not have equipment excess to its own needs available in balanced units for transfer to Latin American countries. This shortage is attributable to: (a) the current requirements of the United States Army, which is being expanded in accordance with the wishes of Congress; (b) the dissipation of surplus equipment in overseas areas; and (c) the requirements of countries for which programs have been specifically authorized by Congress, such as Greece and Turkey.

Department of the Navy

The Department of the Navy has retained in its custody certain excess naval vessels (cruisers, destroyer escorts) earmarked for Latin American countries, but is without legislative authority permitting their sale. With regard to other naval equipment, the Department of the Navy is able to provide armament for ships which American governments may contract to have built in private shipyards in the United States, and is able to provide ammunition and maintenance material which cannot be readily procured from commercial sources, for United States vessels obtained under the “interim program”. This equipment must be sold under Public Resolution 83, of 1940, at no cost to the United States.

Department of the Air Force

No adequate legislative authority is available to the Department of the Air Force to transfer equipment to Latin American countries. In any event, only a limited number of aircraft would be available for Latin American countries at this time. Practically none of these planes are in flying condition and they are without spare parts. Inasmuch as the Department of the Air Force can neither recondition the planes nor provide spare parts, it is questionable whether they should be sold to Latin American countries for any purpose other than cannibalization. The Air Force does have available some excess ground equipment for air fields.

In summary, there is virtually no prospect of additional sales of military equipment by this Government in the near future. Although the State Department and the Service Departments will continue to press the matter, it is difficult to venture a prediction as to when Congress will enact legislation authorizing arms transfers to Latin American countries. The only important source of United States military equipment open to Latin American governments, until such time as Congress may enact legislation enabling further sales by this Government, is the commercial market in the United States. In this regard, the Departments of the Army, Navy, and Air Force, in coordination with their own procurement, will use their good offices to facilitate the negotiation and execution of contracts between the other American government and United States commercial sources.

The foregoing is transmitted for your background, in order that you may make clear to the government to which you are accredited, should requests for military equipment be made, the unlikelihood of any such material being obtained from United States Government stocks. You may, in your discretion, inform the government that should it wish to acquire military or naval equipment from commercial sources in the United States, the Department will, in exercising its responsibility for the control of munitions traffic, give sympathetic consideration to requests for licenses to export reasonable amounts of material needed for the national self-defense. You should bear in mind, however, that the Department cannot give blanket authorization in advance for the export of any and all armaments which foreign countries may desire.

The Department is aware of the unfavorable effect which the situation outlined above may have on the continuation of United States military, naval, and air missions in other American republics. Should officials of the government to which you are accredited intimate that the continuation of any such missions was no longer considered desirable in view of the difficulty in obtaining further equipment, you are requested to express the view that such missions constitute a valuable form of international cooperation which this Government has every desire to continue, that this Government has done all in its power to make definite amounts of military equipment available at extremely attractive prices (through the interim program), and that normal commercial channels in the United States for the acquisition of such equipment remain open to the government to which you are accredited on the same terms as to any other government.

You are requested to bring this instruction to the attention of your military, naval, and air attaches, and of the chiefs of any United States military, naval, or air force missions assigned to the government to which you are accredited. The situation described above is under continued study by the Department and you will be informed of any further developments.

Very truly yours,

For the Secretary of State:

Charles E. Saltzman

STATUS OF AMERICAN REPUBLIC LEND-LEASE ACCOUNTS, AUGUST 31, 1948¹

Country	Statement of account		Charges			Balance Due U.S.
	LL Number	Date	Gross		Net
Boliva	16	6– 2–48	$5,036,546.81		$915,644.22	$652,130.71
Brazil	13	12–19–47	Settlement	4–15–48		30,000,000.00
Chile	17	6– 4–48	20,221,916.71		6,066,575.02	15,575.02
Colombia	16	6– 2–48	7,858,701.33		3,492,406.85	1,092,406.85
Costa Rica	16	6– 2–48	155,595.32		84,877.25	84,877.25
Cuba	16	6– 2–48	4,630,151.27		2,700,767.23	300,767.23
Dom. Republic	16	6– 2–48	950,562.11		534,691.19	92,691.19
Ecuador	17	7–14–48	6,085,970.42		214,834.75	2,834.75
El Salvador	14	11–24–47	877,319.13		481,472.73	181,472.73
Guatemala	13	12– 1–47	Offset Arrangement			0
Haiti	15	3–19–48	Settlement	3–30–48		0
Honduras	15	3–15–48	368,249.77		34,089.44	989.45
Mexico	17	6– 4–48	36,583,907.06		12,072,689.33	12,079,854.41
Nicaragua	16	6– 4–48	883,663.39		611,760.16	511,760.16
Paraguay	15	3–19–48	1,789,799.30		48,860.97	15,860.97
Peru	17	6– 8–48	16,633,423.50		6,882,910.64	2,882,910.64
Uruguay	16	6– 2–48	5,481,328.11		2,514,833.35	3,786,049.16 CR.
Venezuela	16	6– 2–48	3,902,763.09		1,756,243.40	411,243.40
				Total:		$44,539,423.60

1. For documentation on this subject, see Foreign Relations, 1946, vol. xi, pp. 86 ff.
2. 58 Stat. 765.
3. Public Law 862, June 30, 1948, 62 Stat. 1202.
4. Approved June 15, 1940; 54 Stat. 396. For documentation on this subject, see Foreign Relations, 1940, vol. v, pp. 1 ff.
1. Copy transmitted to the Department in letter of September 10, 1948 by the Commissioner of Accounts, Treasury Department (Maxwell), not printed (810.24/9–1048).