Memorandum by Mr. John W. Black of the Office of British Commonwealth and Northern European Affairs to the Officer in Charge, United Kingdom and Ireland Affairs ( Jackson )
Subject: Sale of British Destroyers to Venezuela.
In a note dated October 6, 19491 Venezuela made inquiries regarding the possible purchase of U.S. destroyers for their Navy. In reply we stated that the matter would be given consideration but apparently no immediate action was taken. In December word was received from Caracas that the British were negotiating with the Venezuelans for the sale of three destroyers and that these negotiations were well advanced. Both the Embassy and our military people in Caracas expressed concern over this development but suggested that the deal might be blocked if the U.S. acted quickly by making one destroyer available immediately on a cash or loan basis and by beginning negotiations for the construction of three more. We replied by saying that there was no objection to constructing three destroyers and subsequently announced our willingness to send a special commission to Caracas to discuss the matter. No action was taken with regard to the immediate transfer of one destroyer. Although it appeared for a time that these moves might be enough to stall the British negotiations, such was not the case. The proposed commission was never invited by Venezuela and during the latter part of June a contract for the purchase of two destroyers from British Vickers was signed.
The problem of sales of military equipment to Latin America by European countries has been of continuing concern to the Department of Defense. In March of this year Defense officials expressed to the Department their irritation regarding the sale of British jet planes to Venezuela. At a meeting attended by interested officers in ARA and [Page 642] Mr. Satterthwaite2 of BNA it was decided that no objections to these sales should be voiced to the British.
After reviewing the facts of the present case, it would appear that both the slowness of the U.S. to respond to Venezuela’s interest in procuring ships and the probability that the British offer was more attractive than any that this country might be expected to make, goes far to explain why the British were successful in making this sale. Lacking any evidence of unfair business practices on the part of the British and in the absence of any understanding or agreement with the British not to sell military items to Venezuela, there does not seem to be any grounds for a complaint by the U.S. in this matter.
BNA has taken the position that there should be no approach to the British regarding such sales until a definite agreement is reached between the Department and the Defense Establishment regarding the amount and types of military supplies which should be furnished to Latin American countries in the light of individual and hemisphere security requirements. Once such an agreement is reached it would be advisable to consult with the British in order to obtain their cooperation in carrying out any balanced military program for that area.