ISAC Files, Lot 53 D 443

Minutes of the Third Meeting of the International Security Affairs Committee, Held in the Department of State, 10:30 a.m., February 13, 1951

top secret

[Here follows a list of those present (22).]

Discussion by General Bolte1 of Grant Aid to Latin American Countries

1. General Bolte explained in general terms why, from the military point of view, it is considered desirable to extend grant military assistance to Latin American countries. He said that the Department [Page 992] of Defense is interested essentially in getting approval of the principle of extending this grant aid, and that the proposed figure of $100 million which was arbitrarily fixed and is already being revised downward, underscores the fact that it is mainly the principle rather than the amount of such assistance which the Department of Defense is looking at. He mentioned that the Inter-American Defense Board has recently taken positive steps in developing a sound hemispheric defense plan and that the other American Republics are evidencing a cooperative spirit. In addition the other American states are taking a positive stand against world Communism. He said it would help the United States to exert real influence and take positive leadership in the forthcoming conference of the Foreign Ministers of the American Republics in Washington beginning March 26 if the U.S. Delegation had at least agreement in principle on the matter of grant aid to the other American Republics. General Bolte said he realized a firm figure based on detailed justification would have to be developed for the FY 1952 presentation and that this job would not be extremely difficult because we already have a good idea of what the Latin Americans need.

2. General Bolte said that we are quite clear on what we expect to achieve through the extension of this grant aid. For one thing we would seek to strengthen the forces of those countries which could assist in the protection of the Panama Canal, especially at a time when our armed forces are committed elsewhere in the world. We also expect to develop plans with the Latin Americans for submarine patrol of shipping lanes in the event of total war. A further direct gain we would expect to accrue from the extension of grant aid is in the realm of base rights and communications facilities through certain of these countries. He added that although commitment by these countries of forces to Korea would not be treated as a quid pro quo for grant aid, the extension of grant aid would undoubtedly have an effect in causing these countries to be more cooperative in contributions to UK forces in Korea.

3. General Bolte said that the U.S. is disappointed in the kind of support these Latin American countries have given to the UN action in Korea, but he admitted that part of the blame is ours in the way we handled requests for contributions and in the conditions which we attached to the acceptance of offers of help. He stated that he recognized that there might be adverse Congressional reaction to extending grant aid to Latin America in the light of their poor showing with respect to Korea but that this opposition could probably be overcome through other considerations.

4. Mr. Gordon2 asked whether we are pressing the Latin Americans to make contributions in the Korean war and Whether there is any [Page 993] likelihood of further developments on this score before April 2 (target date for Congressional presentation of FY 1952 aid program). General Bolte said that we are pressing on various fronts for further Latin American contributions in Korea but that he doubted whether there would be anything substantial before April 2. Mr. White3 added that we are increasing our pressures, that Mr. Mann4 is in Mexico City at the present time discussing the possibility of a Mexican contribution and that Mr. Miller,5 on his forthcoming trip,6 will also press this matter in various capitals he visits. Mr. Gordon asked whether General Bolte expected that firm programs similar to those on which arms aid for Europe and the Far East will be based can be developed for Latin America in time for the Congressional presentation. General Bolte said that it can be done inasmuch as we already have a good estimate of what those countries require in the way of arms assistance. He mentioned that at the present the Latin Americans can only obtain assistance on a cash basis under Section 408 (e)7 and that because those countries have lowest priority they have not been able to get equipment even for cash. This, he mentioned, has caused an adverse reaction on the part of the Latin Americans.

5. Mr. Gordon asked why we should give arms to the Latin Americans in view of the fact that they have dollar reserves and are in general enjoying a good foreign exchange position. Mr. White pointed out that we are admittedly aiming at the political problem in Latin America since our proposed program is so small. Grant military aid would at least be a kind of acknowledgement of the fact that the Latin Americans are paying off their lend-lease obligations, that they were not included in the Marshall Plan,8 and that to date other countries have been getting free arms while the Latin Americans have not been able even to purchase arms from the United States. These, he said, are important political factors which must be taken into account in assessing this question. He also pointed out that it is not expected that in the coming year the Latin American countries generally will enjoy the [Page 994] same foreign exchange situation they enjoy today. Mr. Hebbard9 stated that the Treasury Department as a matter of principle opposes extending aid to build up the dollar positions of other countries. However, Treasury recognizes that there are quite a number of considerations which have a bearing on this problem of grant aid to Latin America and considers the foreign exchange and dollar positions of these countries merely as aspects of the larger problem.

6. Mr. Halaby10 asked whether in the extension of this proposed grant aid substantial increases in forces in the recipient countries are contemplated, increases which might have an adverse effect upon the economic stability of those countries. General Bolte stated that this program would not have any substantial effect on the size of the military establishments in the recipient countries.

7. Mr. Cabot stated that the discussion this morning was by way of informal consideration of the problem in expectation of formal consideration at the next meeting of ISAC. He pointed out that a decision on the question of whether to extend grant military aid to Latin America in FY 1952 is required at an early date and that he expected ISAC could come to à decision at the next meeting.

[Here follows discussion of matters unrelated to the question of military grant aid to Latin America.]

  1. Lt. Gen. Charles L. Boité, Deputy Chief of Staff for Plans, U.S. Army, and Chairman, Inter-American Defense Board (IADB).
  2. Lincoln Gordon, of the Office of the Special Assistant to the President.
  3. Ivan B. White, Office of Regional American Affairs; he became Director of the Office on February 19, 1951.
  4. Thomas C. Mann, Deputy Assistant Secretary of State for Inter-American Affairs.
  5. Edward G. Miller, Jr., Assistant Secretary of State for Inter-American Affairs.
  6. Mr. Miller visited five Latin American countries between mid-February and early March 1951: Argentina, Brazil, Chile, Peru, and Uruguay. The main purpose of his trip was to discuss with the appropriate officials of these governments matters relating to the forthcoming Fourth Meeting of Consultation of Ministers of Foreign Affairs. Documents pertaining to his trip are in Department of State decimal file 110.15–Mi and Lot 53 D 26.
  7. Reference is to a section of the Mutual Defense Assistance Act (Public Law 329), approved October 6, 1949; for text, see 63 Stat. 714.
  8. For documentation on the European Recovery Program, popularly known as the Marshall Plan after Secretary of State George C. Marshall (1947–1949), see Foreign Relations, 1947, vol. iii, pp. 197 ff.
  9. William L. Hebbard, Assistant Director, Office of International Trade, Department of the Treasury.
  10. Najeeb E. Halaby, Jr., Assistant for International Security Affairs, Economic Cooperation Administration.