Memorandum of Conversation, by the Officer in Charge of North and West Coast Affairs (Bernbaum)

top secret

Subject: Defense Concurrence in Informal Approach to Venezuela on Grant Aid Under the Mutual Security Act1

Participants: Major General E. L. Walsh,2 USAF
Colonel P. C. Haines,3 USA, OMA
Colonel B. R. Nyquist, USAF, OMA
Mr. D. F. Horton, OMA
Captain A. P. Calvert, USN, Cincarib
Lt. Col. R. G. Storey, USA, JCS
Col. J. H. Anderson, USA, JCS
Col. J. G. Hill, USA, JCS
Col. S. F. Crawford, USA, G–3
Col. W. M. Connor, USA, OFMA
Col. James D. Alger, USA, OMA
Mr. M. M. Bernbaum, Dept. of State

The principal topic of conversation was whether, and the manner in which, the Venezuelans might be given an opportunity to express themselves on military grant aid. Also discussed were: Venezuela’s [Page 1664] priority position for purchased military equipment; the status of the staff conversations which are tentatively to be continued in Caracas in December or January; and the pending visit in January of Lt. Col. Marcos Pérez Jiménez, Member of the Military Junta and Minister of Defense.

Venezuela and Grant Aid

It was decided that Ambassador Warren should be instructed by the Department to approach the Military Junta shortly before the issuance of publicity on the visits of military negotiating teams to the various Latin American countries on military grant aid.4 Preferably basing his request to see the Military Junta on another matter, he would then inform the Junta of the grant aid program and congratulate the Venezuelan Government on its status as one of the very few countries in the world able and ready to pay its own way militarily. Ambassador Warren’s conversation with the Junta would, in general, be based on the idea that we are by no means encouraging the Venezuelans to ask for grant aid, but are, by discussing the program with them, giving them an opportunity to request participation in it if they so desire.

The above procedure was worked out after a rather lengthy conversation in which Colonel Haines quoted General Olmsted5 and Mr. Nash as supporting the Department’s position while General Walsh was opposed to any approach to the Venezuelan Government at all. He was supported in this view by Colonel Hill who was of the opinion that the JCS directive on the matter prohibited an approach to the Venezuelans with a view to their eventual participation in the program. These objections were, however, withdrawn after I read to them paragraph three of the attached letter6 to Ambassador Warren which met with General Walsh’s approval, and which was considered by Colonel Hill as not contravening the JCS directive.

As regards the timing, General Walsh first advocated that the matter be held in abeyance until the arrival in Washington next January of Colonel Pérez Jiménez. I then expressed the opinion that the Department would prefer an earlier date on the ground that it would be far better to anticipate than to await a possible complaint from the Venezuelan Government over our failure to discuss the matter with it. I stated that although the Department would prefer the earliest date possible, it would go along with holding off the discussion until General Morris’ visit to Caracas on or about December 17. It was then decided by all of the military present that regardless of whether General Morris would be able to visit Caracas, it would be preferable to [Page 1665] have the matter handled by Ambassador Warren. The feeling was that this was a political, rather than a military matter, and should be handled at the highest political levels. It was confirmed, prior to the termination of the meeting, that the foregoing represented the authorization of the Department of Defense for the Department to issue the necessary instructions to Ambassador Warren for implementation at the proper time.

Deliveries of Venezuelan Orders for Military Equipment

General Walsh stressed throughout the conference that the Venezuelan Government was interested far more in the expeditious delivery of the military equipment ordered by it than it was in grant aid. He added that Secretary Lovett had issued definite orders to the effect that all Venezuelan orders for military equipment should receive prompt and preferential attention. He went onto say that such orders had been received by the Air Force which has thus far been able to supply more than ninety-five percent of the Air Force equipment ordered by the Venezuelans.7

Colonels Hill and Alger remarked that they were not aware of such instructions from Secretary Lovett, and were under the impression that the JCS had denied a higher priority rating for Venezuela. (It was later confirmed by Colonel Nyquist that the JCS directive stated in effect that upon a decision of the criticality of Venezuelan petroleum that country should be furnished immediately with the equipment required for the protection of its petroleum installations. A higher priority would then be granted if necessary.) Although I was unable to confirm from the conversation whether Venezuela did, in fact, have the preferred position alleged by General Walsh, it was clear that it was actually at the top of the Latin American list.8

Captain Calvert made the interesting statement that although pending official requests from the Venezuelan Government for military equipment totalled only about sixteen and a half million dollars, the [Page 1666] value of the equipment submitted by the Venezuelans during the Panama staff talks as constituting their minimum requirements would involve far more than one hundred million dollars.

Continuation of Staff Talks

Captain Calvert stated that General Morris had inquired of the Venezuelan General Staff through the Army Attaché in Caracas whether it would be suitable for the Staff Talks to be resumed in Caracas during December 17–21, 1951, or January 7–11, 1952. No indication has yet been received from the Venezuelan Government of its preference, or, for that matter of its agreement that Staff Talks should be continued at this time. Captain Calvert added that Cincarib was still awaiting word from the Venezuelans of their reaction to the Department’s explanation of the payment terms required on equipment purchased from the United States Government (Deptel 177 of November 2 to Caracas).9

He explained that staff talks to be held in Caracas on November 5 had been cancelled due to Venezuelan dissatisfaction with: (1) the wording of the agreement with regard to Venezuela’s obligations under the Rio Treaty (considered a political rather than military matter); (2) the wording of a clause providing for substitutions on military equipment ordered by the Venezuelans (insistence upon Venezuelan, as against US, discretion in the determination of substitutions); and (3) payment terms involving payment long in advance of delivery (desire to make a 25% or even 50% down payment with the remainder to be paid upon delivery of the equipment to the port of export).

Although satisfied that the first two objections had been cleared up satisfactorily, Captain Calvert was doubtful whether the Departments explanation of how far we might go to meet Venezuelan desires would be satisfactory enough to permit continuation of the staff talks. I assured him that I would go into the matter with a view to expediting whatever action might be required in the Department and by the Embassy.

Visit of Lt. Colonel Pérez Jiménez

General Walsh stated that he was awaiting Lt. Colonel Pérez Jiménez’ acceptance of the invitation extended him for January, and expected the “red carpet treatment” for him by the Air Force. Aside from General Walsh’s nodded confirmation, there was no reaction to [Page 1667] my query whether the invitation was firm or had, as the Department understood, been extended in a general manner permitting reconsideration in the event of unfavorable political developments.

  1. Reference is to the Mutual Security Act (Public Law 165), approved October 10, 1951; for text, see 65 Stat. 373.
  2. Robert L. Walsh, Chairman, United States delegation to the Inter-American Defense Board (IADB).
  3. Peter C. Haines, III, Deputy Director, Office of Military Assistance, Department of Defense.
  4. For documentation on the development of a military grant aid program for Latin America, see pp. 985 ff.
  5. Maj. Gen. George H. Olmsted (USA), Director, Office of Military Assistance, Department of Defense.
  6. Not attached to source text.
  7. The foregoing paragraph was subsequently revised at the request of General Walsh on December 10, 1951, to read as follows:

    “General Walsh stressed throughout the conference that the Venezuelan Government appeared to be interested far more in the expeditious delivery of the military equipment ordered by it than it was in grant aid. He added that Secretary Lovett had talked with Lieutenant General O. R. Cook, USAF Deputy Chief of Staff for Materiel, and it appeared that all Venezuelan orders for Air Force equipment would receive prompt and preferential attention. He went on to say that such orders had been received by the Air Force which has thus far been able to supply more than ninety-five percent of the Air Force equipment ordered by the Venezuelans.” (611.31/12–1151)

  8. In a memorandum dated December 18, 1951, the Deputy Director of the Office of Military Assistance (Haines) in the Department of Defense informed Mr. Bernbaum that the Joint Chiefs of Staff had decided not to upgrade the formal priority of military assistance to Venezuela, but that for the current period when Venezuela’s oil resources were vital to United States needs, Venezuela’s requests for the purchase of military equipment would be considered on a case by case basis, and if a higher priority was warranted it would be assigned (731.5–MSP/12–1851).
  9. In telegram 177, Acting Secretary of State Webb explained that nations receiving military equipment under the terms of the Military Defense Assistance Act of 1949 would have to furnish the United States with a “dependable undertaking” to repay the full amount of the contract, and that dependable undertaking was being interpreted as consisting of either an irrevocable letter of credit or initial payment or a firm commitment by the interested nation’s appropriate military attaché in the United States that his government accepted the terms of the contract regarding repayment (731.5/10–3151).