Miller Files, Lot 53 D 261

The Assistant Secretary of State for Inter-American Affairs (Miller) to the Ambassador in Peru (Tittmann)

secret

Dear Harold: I had the good fortune of being in New York on other business Friday and called on Dr. Gallagher at his hotel. He was 45 minutes late for the appointment, having gone to New Jersey for lunch and having been detained by frightful weather on the way back. I remained at his suite for nearly an hour and had one of the best conversations with him that I have ever had.

Dr. Gallagher immediately asked me whether we had talked to General Noriega about troops for Korea. I told him in detail about my conversation2 with the General and of the General’s apparent determination to send some troops. Dr. Gallagher seemed to be extremely pleased about this. He said that Noriega was the key man in the picture and that for some time Noriega had needed some special attention from the United States so that his latent pro-U.S. inclinations could be brought to the fore. Dr. Gallagher said that he would himself give his earnest attention to the troops question, although I understood him to say that he would not go to bat on this issue until Noriega had returned to Lima.

Since there have been so many instances in the last year where Peruvians have expressed the feeling that the U.S. is favoring other countries over them, I decided that I would hit this complaint as hard as I could. I told Dr. Gallagher that we had used two arguments with General Noriega in support of sending troops to Korea. The first argument was that all the military people in our own government realize that although we have had casualties in Korea, the net effect of the Korean operation has been greatly to strengthen our armed might. This is not [Page 1601]only because of the impetus that has been given to the rearmament effort but also because of the fact that we have now veteran troops seasoned under fire to feed into recruit divisions. I also pointed out to him that the result of our policy of fairness with all countries in Latin America on all issues had been in our opinion to ease international tensions such as those which had existed between Colombia and Peru, with the result that Colombia had sent a battalion to Korea. I said that this was in my opinion a good proof of Colombia’s sincerity and that it had gained for Colombia great kudos in our government as well as contributing in the long run to the strengthening of Colombian armed forces. I said frankly that I thought Peru should have this lesson in mind in orienting its own course of action.

I then pointed out to Dr. Gallagher that we in the State Department had tried very hard to improve the climate for Peru in the United States. I expressed great satisfaction over the debt settlement which Ambassador Berckemeyer had negotiated with the Bondholders Council and said that even though as counsel for the Ministry of Finance of Peru in my private law practice I had felt that the original offer3 was a fair one, nevertheless it was unquestionable that with the increase in Peru’s financial position it was in their own national interest to settle this matter once and for all. I said that the International Bank had shown its good faith by proceeding with the Callao loan without awaiting the debt settlement and that now the International Bank would enter into a relationship with Peru which, in my opinion, would mark the beginning of a new era for Peru and in Peruvian-American relations—an era which would be a new day for Peru’s economy.

I said that Peru had earned this cooperation by the wise and prudent fiscal policies pursued by General Odria and the importance which the Peruvian Government had attached to Dr. Klein’s recommendations. I reverted to the matter of troops and pointed out that although we badly needed troops for Korea, we had not conditioned our cooperation in any other phase with Pern on this issue but had stimulated the Export-Import Bank and the International Bank to cooperate with Peru and had also worked very hard on getting the DE’s. Dr. Gallagher said that he had frequently expressed to colleagues in Peru his deep appreciation of the fairness of our attitude in these matters.

I referred briefly to Colonel Mendoza’s4 visit and the stimulation of our Point Four activities. Dr. Gallagher said frankly that he had entered the Odria cabinet with misgivings about some of the military people in the cabinet but he had been most gratified with the performance of people like Mendoza and Noriega as well as Odria.

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I told Dr. Gallagher very frankly that I had been worried about the adverse impact of Galo Plaza’s visit upon our relations with Peru but I told him what I had previously said to Ambassador Berckemeyer about our having warned Galo Plaza in advance not to use his visit5 to stir up the boundary issue. I pointed out that, far from having done so, Plaza had acted not as an Ecuadoran primarily but as a Latin American during his visit and had helped us greatly with Congress in getting through our Point Four program. I also said that I would like to bring up President Odria but that for political reasons which he would appreciate it would be counter-productive to do so. He agreed fully on both points.

I brought up the tax on tuna fish and told him about our efforts to block this, but he did not seem to attribute much importance to the matter.

I told him that I was sorry that some of our liberal and press elements sometimes classified the Odria regime with that of Peron and said that I personally thought that there was nothing further from the truth. I referred to the derisive comments which Odria had made about the Perons at the luncheon which Odria had given for me in Lima in March. Dr. Gallagher said that it was absurd for anyone to compare Odria with Peron and thanked me for my efforts to clarify this matter with the press up here.

I referred to the ceremonies honoring Isabela La Católica and pointed out that I had arranged for Ambassador Berckemeyer to be on the platform with me. I said that the sole and only reason for my having put on the show was because of Gallagher’s interest in the matter. He said he understood that and appreciated it deeply. I complimented him on his splendid performance in Spain and he also seemed to be glad about this.

We discussed briefly the situation in Bolivia and in Chile. I referred to my apprehensions over the inability of the moderate parties in Chile to get together on a single candidate and the possibility that this would let the election go to Ibañez6 by default. While he agreed that Ibañez might be a demagog along the Peron type, he did not think he would follow the kind of go-it-alone, anti-U.S. policy that Peron stands for.

We did not get into the Haya de la Torre case or the PeruvianEcuadoran boundary dispute except in the most indirect way. He did at one point refer to my public statement on the Haya case when I called in Zuleta7 and Berckemeyer last year as having been misunderstood in Peru as an anti-Peruvian act on our part, but he merely said this [Page 1603]was water over the dam and indicated the situation was much less tense.

He brought up Belaunde’s8 candidacy for the General Assembly presidency in a very general way towards the end of our talk without, however, asking for my intervention. He did say that he assumed he was right in discrediting reports which had reached him that we were agitating for Padilla Nervo’s9 election. I told him that as usual we would stand by the deliberations of the Latin American caucus. He did say he hoped that the Latinos would not kick away their chance for the presidency by failing to get together between themselves in the caucus.

Dr. Gallagher volunteered assurance a workable petroleum law10 would soon be forthcoming and I told him at some length about my participation in the National Petroleum Convention in Venezuela in September11 and the favorable impression which had been made on foreign delegates (including those from Iran, Saudi Arabia, Egypt and Mexico) by the state of affairs in the petroleum industry in Venezuela. I spoke highly of Ambassador Garland and praised his initiative in having arranged for a Venezuelan technical oil mission to go to Lima. I told him in some detail about what Herbert Hoover, Jr. had told me in Lima at luncheon in your house two years ago to the effect that every country in Latin America with proven oil resources which had permitted private companies to operate was now a net exporter of oil whereas every country with proven resources of oil which had a nationalized industry was a net importer. He seemed impressed by this and expressed surprise to learn that Mexico was now a net importer and that Argentina was now producing less than half of its petroleum requirements whereas once it had produced almost all.

Sincerely yours,

Edward G. Miller, Jr.
  1. Files of Assistant Secretary of State for Inter-American Affairs Edward G. Miller, Jr., for the years 1949–1953.
  2. General Noriega was in the United States during October and November 1951 for the purpose of inspecting certain military installations; no memorandum of his conversation with Mr. Miller could be found in the Department of State files. In a letter to Ambassador Tittmann, dated October 29, 1951, commenting on General Noriega’s visit, Mr. Miller had stated in part that much to his surprise the General had indicated “enthusiastic determination” to send Peruvian troops to Korea, and that he promised to work on the problem after his return to Lima (Miller Files, Lot 53 D 26).
  3. Apparent reference to the debt settlement proposal offered by the Peruvian Government in 1947, which was rejected by the FBPC.
  4. Col. Juan Mendoza, Peruvian Minister of Public Education.
  5. Galo Plaza Lasso, President of Ecuador, made an official visit to the United States during the latter part of June. For documentation on his visit and his discussions with officials in the Department of State, see pp. 1394 ff.
  6. Carlos Ibañez del Campo, President of Chile, 1926–1931.
  7. Eduardo Zuleta Angel, Colombian Ambassador to the United States.
  8. Victor Andres Belaùnde, Chairman, Peruvian Delegation to the United Nations.
  9. Luis Padilla Nervo, Chairman of the Mexican Delegation to the United Nations, was elected President of the General Assembly of the United Nations, November 6, 1951.
  10. During 1951 the Peruvian Chamber of Deputies had under consideration several drafts of a proposed petroleum law, all of which provided for the tighter regulation of the industry and an increase in the government’s share of profits. A detailed summary of the content and progress of the proposed legislation is attached to a letter from the Minerals Attaché in Lima (Bramson) to Mr. Dorr, January 3, 1952, not printed (823.2553/1–352).
  11. The Venezuelan National Petroleum Convention was held at Caracas, September 8–18, 1951; Mr. Miller was a member of the Observer Delegation sent by the United States.