Foreign Relations of the United States, 1950, National Security Affairs; Foreign Economic Policy, Volume I

720.5621/9–1250

The Secretary of State to the Secretary of Defense (Marshall)

confidential

Washington, October 19, 1950.

My Dear Mr. Secretary: Careful consideration has been given to the program of sale of excess United States naval vessels to certain Latin American governments which the Department of Defense proposed in its letter of September 12, 1950. The Department of State concurs in the proposed allocation.

In giving its concurrence, the Department is well aware of the great importance to the United States Government of the plans for the defense of this hemisphere which are now in progress, and of the necessity for taking appropriate steps to insure that the Latin American governments are in a position to fulfil effectively the roles in hemisphere defense which they will have to undertake. While ideally it might be well to postpone action until the Inter-American Defense Plan has been developed and accepted by the nations involved, I believe that the desirability of following this course is outweighed by the possibility that the nations involved may look elsewhere for the satisfaction of their minimum desires, and by the fact that acceptance of this program represents a deviation from such ideal procedure only in chronology and not in principle, I further believe that the desires, already expressed, of certain of the other American governments to purchase naval vessels constitute strong evidence of their intentions to collaborate in the achievement of an effective inter-American defense system or, at a very minimum, the defense of their respective countries.

In agreeing to this proposed allocation of ships, I assume that the program has been developed after taking account of priority requirements for grant-aid countries in Western Europe under the Medium Term Plan,¹ and the requirements of countries eligible for grant-aid in other parts of the world, and that, in this connection, proper weight has been given to the general desirability of discouraging production in Europe of equipment that could be provided from available stocks under grant-aid. I also assume that the proposals are consistent with plans of the Inter-American Defense Board as thus far formulated and that it has been determined that these are the types and numbers of naval units which will be needed by these Latin American governments in connection with any hemisphere defense scheme which is likely to evolve. If I am not accurate regarding any of these assumptions, I would appreciate your so advising me since, under such circumstances., I would wish to review the matter further.² Otherwise, the Department proposes to proceed as follows:

1. The Ambassador of each Government concerned will be called in individually by the Department of State and presented with a diplomatic note advising his Government of the proposed offer of sale. At the same time, the Ambassador will be advised of the statutory requirements for the payment of cash in advance of delivery, and of certain customary governmental assurances in connection with these transactions.

2. When the Ambassador indicates informally to the Department that the manner of payment in this transaction and the requisite assurances are understood and acceptable to his Government, he will be advised that the Department of Defense will proceed forthwith to negotiate the details of the transaction with the naval authorities of his Government, in accordance with the terms of the Mutual Defense Assistance Act of 1949 as amended.

I shall appreciate being advised if this proposed procedure meets with your approval.³

Sincerely yours,

Dean Acheson

1. For information on this Plan, see vol. iii, pp. 1 ff.
2. A memorandum of October 9, 1950, from Fletcher Warren, Director of the Office of South American Affairs, to Acting Secretary Webb, indicates that the sale of excess naval vessels to other American governments encountered its principal opposition within the Department from officials of the Mutual Defense Assistance Program. (720.5 MAP/10–950)

3. In a letter of October 26, 1950, Secretary Marshall acknowledged the Department’s concurrence with the Defense Department’s proposal of September 12 but stipulated that Navy Department officials should hold staff conversations with members of the purchasing navies before actual quantities of equipment were specified in diplomatic correspondence. (720.5621/10–2650)

   For the press release announcing the formal U.S. offer of January 4, 1951, to sell two cruisers apiece to Argentina, Brazil, and Chile, see Department of State Bulletin, January 15, 1951, p. 104. The U.S. offer was accepted on January 4 by Brazil and Chile and on January 8 by Argentina. For texts of these offers and acceptances, which constituted agreements entering in force on the date of acceptance, see, for Argentina, Brazil, and Chile, respectively, United States Treaties and Other International Agreements (UST), vol. 3 (pt. 2), p. 2735, p. 2738, and p. 2741.

   In telegram 94 from Santiago, August 29, 1950, Ambassador Bowers reported in part that Chile would not be interested in destroyer escorts. (725.5621/8–2950) Negotiations regarding other naval equipment specified in the Defense Department proposal of September 12 did not near completion in 1950.