S/ISA Files, Lot 52–262

Memorandum by Mr. H. F. Arthur Schoenfeld of the Office of the Director of International Security Affairs 3 to Mr. William H. Bray, Jr., of That Office

top secret

[Subject:] TF II D–12, January 31, 19514—Justification of Point IV Program in the Other American Republics.

You have asked that the FY 52 Point Four Program for Latin America proposed in TF II D–12, dated January 31, 1951, be reviewed in the light of United States security interests.

The proposed program is limited for the present to technical assistance under the Act for International Development.5 It contemplates [Page 1039] an increase in expenditures over those of FY 51 which are around $11 million. It recommends at present that approximately $44 million be employed for bilateral technical cooperation projects in the other American Republics in FY 52 and $2 million as the U.S. contribution to the technical assistance program being undertaken by the Organization of American States.

The composition of the proposed bilateral technical assistance program in Latin America is as follows:

Cost to US (thousands of dollars)
1. Joint Commissions and Economic Surveys 703
2. Agriculture 26,812
3. Education 5,157
4. Health 7,445
5. Industry and Labor 528
6. Transportation and Communications 1,314
7. Mineral Resources 631
8. Water Resources 547
9. Government Administration and Technical Services 360
10. Other 130
Total $43,627

The justification for this Program stems from the fundamental assumption that “… this [western]6 hemisphere, backed up by The Rio Treaty,7 represents the inner citadel of our defenses”. The corollaries of this assumption, as stated in the document under consideration, involve the closest political, economic and military support by Latin America for the world policy of the United States.8 Within these assumptions, the proposed technical assistance program for Latin America has the double objective to: (1) increase production for defense purposes by expanding, on an emergency basis, technical aid programs so that they can effectively assist the Latin American Governments in solving problems, especially in health and supply, that will result from our expanding raw materials requirements, and (2) assist in overcoming the basic Latin American weaknesses which contribute to insecurity.

The justification points out that the proposed program takes into account the “reluctance of Latin American Governments to go in for defense production programs except in the concept of an economic [Page 1040] program which gives consideration to their essential requirements as well as the adverse effect on their economies of the eventual termination of specific productive programs”.

As you have indicated, a statement of the relative strategic importance of any country, or area, to the United States rests upon certain hypotheses regarding the nature and direction of U.S. actions in relation to those of the potential enemy. These hypotheses, against which the fundamental assumption and the corollaries of the foregoing Program Justification must be compared are contained in NSC 56/2,9 and in the Hemisphere Defense Scheme (approved by the U.S. Government) of the IADB, dated October 27, 1950.10

The fundamental assumption, cited above, in the justification for the Point Four Program for Latin America may be considered to be implicit in the first conclusion of NSC 56/2, which states that “In global war, the security of the western hemisphere and U.S. access to its resources and manpower would be essential to the transoceanic projection of major U.S. offensive powder”.

The corollaries which the justification under consideration draws from this assumption are consistent with the basic U.S. military objectives in Latin America. These objectives, as stated in NSC 56/2, are to see to it that the Latin American countries can maintain their internal security; defend themselves against isolated attacks or raids; protect their sources of strategic materials; maintain lines of communication and military bases; and that certain countries, beyond the foregoing roles, should be capable of performing additional tasks as appropriate.

Section V A 1 of the Estimate of the Situation of the Hemisphere Defense Scheme cited above, states that the political, social and economic methods to counteract the probable aggressor are:

  • a. Demonstration of the effectiveness and of the virtues of our democratic system through the development of their [The American Republics]11 basic institutions.
  • b. Development of adequate educational systems to maintain democratic faiths among our peoples.
  • c. Efforts to raise the economic and social level of the American peoples to a point consistent with principles proclaimed in the Atlantic Charter.”

[Page 1041]

Section V B of the Estimate states, inter alia, as the requirements for the defense of the continent:

  • a. a standard of living to assure true well being for all citizens.
  • b. coordinated industrial development.
  • c. adequate public information systems.”

In the light of the foregoing analysis, S/ISA should express the belief that the basic assumption and the argument in TF II D–12 are consistent with the major policy statements on United States security interests in Latin America, and accordingly, that it is in the interests of United States security to seek legislative authorization and appropriation to furnish Point Four assistance to Latin America in FY 52 as proposed in TF II D–12.

[Annex A]

Paper Prepared in the Department of State

secret
TF II D–12

Justification for the Point Four Program in the Other American RepublicsFY 1952

A. Rationale of the Point IV Program.

Whether or not the U.S. will be able to hold outer defenses along far distant fronts in other parts of the world, the security of the U.S. depends ultimately on the collective security of the Western Hemisphere. U.S. security is inseparable from hemisphere security. Behind the present outer defenses of the United Nations and the North Atlantic Treaty12 this hemisphere, backed up by the Rio treaty, represents the inner citadel of our defenses.

The continued support of Latin America for the policy of the United States in the world is one of the elements on which our national security depends. The Latin Americans represent over half of the votes that support us in the United Nations. In case of another world war we would depend on them for the local defense of the hemisphere and for such protection of vital installations and communications as would release United States manpower for other activities. Moreover, it is becoming evident that in another world war much may depend on the degree to which we have on our side actual military manpower recruited from the 150,000,000 people of Latin America. Finally, the economic effort to build the strength of the free world today depends on [Page 1042] the contribution of raw materials from Latin America; in the event of a deepening of the present emergency and the accompanying mobilization, and especially in the event of total war, our dependence on the economic contributions of Latin America would be vital.

Today we can and do count on the support of Latin America. There are, however, historic forces at work which make it evident that we cannot take that support for granted. We must actively develop our Latin American policy in order to counter these adverse forces and to maintain the cooperation on which we depend.

Nationalism that regards international cooperation as contrary to the national interests is a force working against us today. An example of this is in Argentina, where the domestic strength of nationalism is such that the Government must appease it by advocating the “Third Position”.13

Latin American governments today must, to an extent never hitherto known, reflect in their foreign policy the drifts and prejudices of public opinion at home. Unless the people themselves support inter-American cooperation positively, the governments will be increasingly unable to do so.

Although our cooperation with Latin America has a historic background that is lacking in our more recent cooperation with countries in Europe and Asia, our cooperation in Europe and Asia has involved programs of grant assistance far beyond anything we have given to Latin America, where our assistance has been confined essentially to loans, for which the Latin Americans pay full value, and to jointly financed technical cooperation. Aside from economic assistance, the fact is that today our legislation authorizes us to give grant military assistance to almost all of the free world except Latin America, which must pay for our military equipment at high rates. While there are reasons bearing on the present emergency for this situation, the psychological effect on the Latin Americans has been bitter and constitutes a major problem of present United States policy in Latin America.

Because of the insignificant part played in our Latin American relations by the kinds of grant assistance that loom so large in our cooperation with many countries of Europe and Asia, the role of Point IV technical assistance is relatively much more important in Latin America. Not only does the Point IV program occupy an essential and dominant position, in the developing picture of our Latin American relations, it also is the one type of program that goes directly to the problem of enlisting the good will of the masses of people in Latin America, persuading them that we are on the side of their aspirations. The people in Latin America today are rebelling in their own minds against the misery that has been their lot for ages past. They are no longer willing to accept it. They have everywhere been subjected to [Page 1043] a barrage of communist propaganda that offers communism as the only means of their redemption. They have been told that to the capitalist United States they are only a source to be exploited as long as they serve the selfish purposes of the United States, and they have had past history interpreted to them in this sense. The stark fact is that “revolution” is a respectable word today among most of the peoples of Latin America. An intelligent effort is being made to insure that “communism” itself is associated by many of them with a vision of salvation.

It must be recognized in evaluating the potential of hemisphere security that there are basic weaknesses in Latin America today which make for political instability. These lie in economic and social insecurity, the weaknesses effectively exploited by communists and other agitators. The population of Latin America is equivalent to our own, but the lot of the masses is on the whole one of poverty, ignorance and sickness. Nevertheless, the ability of the Latin Americans to maintain good order within their jurisdictions, to exclude enemy elements, and to support themselves in essential respects are vital for our own survival. And should political and economic instability result in the outbreak of conflicts between Latin American states such as occurred up to a dozen years ago, this might render the inter-American system unworkable, thus constituting a dangerous threat to hemisphere security. The role of Latin America in the present “war for men’s minds” is critical. The success of Latin American states in making freedom work effectively will have a significant moral value throughout the world as it will demonstrate that the inter-American system is viable within the framework of democracy.

In addition to the absolute security aspects of our relations with Latin America the availability of certain raw materials from Latin America is an essential element today in the economic strength of the free world coalition. The strategic raw materials whose flow from Latin America must be increased immediately include:

antimony tungsten
asbestos zinc
bauxite cacao bean
beryl fats and oils
cadmium hard fibers
cobalt hides and skins
copper hog bristles
diamonds, industrial kenaf
lead* molasses
manganese rubber*
quartz crystal sottwoods
sulphur wool
tin

[Page 1044]

In order to make our inner citadel secure and to maximize supplies for the free world coalition it is imperative to increase Latin American productive capacity. With respect to the financing of new capacity it is expected that increased dollar earnings of Latin American plus sizeable investments of private and public loan capital will improve the ability of the area to finance the required additional economic plant, including production of strategic raw materials. Consequently, the proposed program of economic assistance for Latin America does not contemplate the use of grant aid to finance the capital requirements of development projects but instead is limited to technical assistance in which a major accomplishment will be the development of the kind of plans and the creation of economic environments which will attract both domestic and foreign investment in the process of sound economic development.

In the interest of hemisphere security, then, as well as to increase the availability of strategic materials the proposed Point IV program for Fiscal 1952 has the double objective to (1) increase production for defense purposes by expanding, on an emergency basis, technical aid programs so that they can effectively assist the Latin American Governments in solving problems, especially in health and food supply, that will result from our expanding raw materials program, and (2) assist in overcoming the basic Latin American weaknesses which contribute to insecurity. Technical assistance will, therefore, be directed toward exploration to prove up additional mineral reserves, to improve transportation, to develop power resources, to increase food production, to train teachers to train workers, to improve sanitation and initiate elementary measures to eliminate the sources of prevalent fevers and infections especially in the mining camps and jungle areas where an influx of population will inevitably result from our raw materials program.

Thus it would be unthinkable to drop existing programs which attack the basic Latin American weaknesses. On the contrary, there should be an expansion of the agricultural, health and sanitation, as well as educational programs which were started by reason of wartime necessities during World War II. At that time, the Coordinator of Inter-American Affairs was provided with $153 million for the FY 1942–46,14 to carry on a technical assistance and information program supplementary to the raw materials programs of such agencies as the Rubber Development Corporation, the Metal Reserve Corporation and the Foreign Economic Administration. The programs which the Coordinator’s office initiated by reason of wartime necessity were continued on a very modest scale after the war and today they constitute [Page 1045] a sound foundation on which the required expansion may be projected efficiently and without waste.

It has been these relatively modest programs that have made the most effective attack on the basic Latin American weaknesses; and that have engendered effective U.S–Latin American cooperation which has reached the masses and created good will by reason of direct personal benefit which they have provided. They have driven home a convincing demonstration of democracy at work wherever they have operated and have measurably raised the production of the working forces. The results obtained from our experience, therefore, demonstrate that, through the expansion of these programs, it will be possible to increase the production of staple foods (e.g. corn, beans, potatoes, rice, meat) and other essential materials which will minimize the dependence of Latin American countries on imports. Although technical assistance in the field of agricultural development has increased food production where programs were in operation, these programs were continued on so limited a scale that population growth continues to outpace the production increases. Today, according to FAO, even if the 1952–53 production targets are met, the volume of crop production would be only 95 percent of the per capita production before 1942 and, moreover, in the majority of the countries the nutritive value of the supplies would remain inadequate. Now, because of the emergency situation we must assist the Latin American governments to expand their food supply not only sufficiently to meet the normal requirements of their own increased population but also the special demands which will be engendered by the large scale of the metal, fibers, rubber and other raw material production. The basic goal of this program, therefore, will be to increase the production to a level adequate to assist in meeting the requirements of expanding defense production.

Because of deficient production of certain essential foods it is necessary in many countries, even during eras of peacetime world trading, to depend upon foreign sources to fill the gap in order to satisfy low consumption levels. In the case of emergency such supplies would have to be made available mainly by this country. Even if this would not constitute an excessive strain on the agriculture of this country, Canada and Argentina, it should be borne in mind that under emergency conditions maximum savings should be made in transportation and the corollary demands on manpower and fuel arising therefrom. Other essential imports which are susceptible to increased local production and which impose a burden upon shipping include fuels, heavy chemicals and pharmaceuticals.

The proposed program also takes into account the reluctance of Latin American Governments to go in for defense production programs except in the context of an economic program which gives consideration [Page 1046] to their essential requirements as well as the adverse effects on their economies of the eventual termination of specific production programs. Concentration of our efforts upon minerals, transportation, power, food production, training workers and upon elementary health and sanitation programs will not only contribute to defense production, but in the longer run also lead to better levels of living and economic security for the people of Latin America. Without such technical assistance the Latin Americans by their own efforts will continue to make some progress. Owing to the serious lack of technical skills, however, so little progress will not constitute a significant contribution in the present situation to either defense production or hemisphere security.

This could be our Achilles’ heel in the hour of crisis.

[Here follows further discussion of other aspects of the proposed Point IV program for Latin America.]

  1. Files of the Office of the Director, International Security Affairs, Department of State, containing material for the years 1949–1951. This lot, and related lots 52–19, 52–24, 52–40, and 52–51, are part of Federal Records Center Accession 62 A 613. Lot 52–26 contains basic subject files on military assistance program development; records of committees and task forces concerned with military and economic assistance programs are in Lot 52–51. For additional information, see the list of sources at the beginning of this volume.
  2. The position of Director, International Security Affairs was established in the Department of State effective January 8, 1951; Thomas D. Cabot assumed the position on February 2. In that capacity, Mr. Cabot also chaired the International Security Affairs Committee (ISAC), an interdepartmental committee comprised of representatives from the Departments of State, Defense, Treasury, and the Economic Cooperation Administration (ECA). The committee was charged with responsibility to conduct a continuing review and coordinaton of policy and programs relating to international security affairs and mutual defense assistance matters. For additional information, see the editorial note in vol. i, p. 267, and the press release, dated January 4, 1951, printed in the Department of State Bulletin, January 22, 1951, pp. 155–156.
  3. Reference is to a paper prepared in the Department of State by Task Force II of the Foreign Aid Steering Group (FASG); a copy is printed as Annex A, below.

    The Foreign Aid Steering Group, established in late 1950, was an interagency group comprised of representatives from the Departments of State, Defense, and Treasury, the Economic Cooperation Administration, the Office of the Special Assistant to the President W. Averell Harriman, and the Bureau of the Budget. Representatives from other agencies sometimes attended the group’s meetings, which were held in the Department of State. The FASG was charged with the responsibility for developing a unified foreign assistance program. For further documentation, see vol. i, pp. 266 ff.

  4. The Act for International Development was Title IV of the Foreign Economic Assistance Act of 1950 (Public Law 535), approved June 5, 1950; for text, see 64 Stat. 198.
  5. Omission and brackets in the source text.
  6. Reference is to the Inter-American Treaty of Reciprocal Assistance (Rio Treaty), opened for signature at Rio de Janeiro, September 2, 1947, and entered into force for the United States, December 3, 1948; for text, see Department of State Treaties and Other International Acts Series (TIAS) No. 1838, or 62 Stat. (pt. 2) 1681.
  7. For documentation relating to United States national security policy within a global context and the development of the military assistance program in 1951, see vol. i, pp. 1 ff.; for documentation concerning United States policy with respect to hemisphere defense and related matters, see pp. 985 ff.
  8. Reference is to the National Security Council (NSC) document numbered NSC 56/2, adopted at the 57th meeting of the National Security Council, May 18, 1950, and approved by the President on May 19; for text, see Foreign Relations, 1950, vol. i, p. 628.
  9. Reference is to the Inter-American Common Defense Scheme, approved by the Inter-American Defense Board (IADB) on October 27, 1950, and by the Department of State on January 15, 1951; for information, see Secretary Marshall’s letter to Secretary Acheson, December 16, 1950, ibid., p. 679.
  10. Brackets in the source text.
  11. For text of the treaty, signed at Washington, April 4, 1949, and entered into force for the United States, August 24, 1949, see TIAS No. 1964, or 63 Stat. (pt. 2) 2241. Documentation on the negotiation of the treaty is printed in Foreign Relations, 1949, vol. iv, pp. 1 ff.
  12. For documentation on this subject, see pp. 1079 ff.
  13. Increased Latin American production may be required. [Footnote in the source text.]
  14. Increased Latin American production may be required. [Footnote in the source text.]
  15. For background information on this subject, see History of the Office of the Coordinator of Inter-American Affairs (Washington, 1947).