Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

739.00/5–554

The Ambassador in the Dominican Republic (Pheiffer) to the Department of State

secret
No. 977

Ciudad Trujillo, May 5, 1954.

Ref:

• Embassy despatches Nos. 621, January 8, 1954,¹ 806, March 1, 1954,² 920, April 6, 1954³ and 957, April 27, 1954.⁴

Subject:

• Summary and Conclusions of the Embassy’s. Review of Political and Economic Developments in the Dominican Republic during 1953.

The four sections of the Embassy’s review of Political and Economic Developments in the Dominican Republic during 1953 have now been submitted as the despatches cited above. This despatch summarizes information contained therein and attempts to draw some broad conclusions. It also covers submittals of a combined Table of Contents and a Secret Supplement to Despatch No. 957 of April 27, 1954.

Summary

Much additional evidence accumulated during 1953 in support of our earlier hypothesis that Generalissimo Trujillo’s megalomania is both dangerous and progressive. Since he is still the only source of policy and the omniscient administrator of the Dominican Republic, his mental condition demands careful and constant study. His insatiable craving for adulation now leads him to demand incredibly servile, fantastic, and frequent adulatory demonstrations and panegyrics. His self-absorption renders him dangerously insensitive to the reactions of others and offends important individuals and governments. His distorted sense of proportion countenances wild extravagances, including steps toward self-deification. Nevertheless, he still performs brillantly in many spheres and remains “the indispensable and indisputable leader of the Dominican people”.

Last year’s rapid fluctuations in the Dominican-American political and economic relations clearly illustrated the difficulties of doing business with an unreliable and egocentric dictator. Although Trujillo cooperated fully with us in the military field and in international organizations, his attacks on American capital reached hitherto unprecedented intensity and his unwarranted blackguarding of present and former Departmental officers injured our prestige here and elsewhere. His relations with other American States were dominated by attempts to throw a cordon sanitaire around Guatemala, Costa Rica and possibly Haiti, and by efforts to strengthen his relations with rightist governments of Middle America.

He continued to woo Spain; but his prospects for closer collaboration with the United Kingdom dwindled because its demand for Dominican sugar declined and because he offended the British with a singular manifestation of his vanity. Commercial relations with Germany, Italy, Japan and Spain were intensified, and some evidence accumulated that he may be veering toward bilateral clearing agreements. The Dominicans continued to participate vigorously in international organizations but won few triumphs, except for a substantial quota under the international sugar agreement. They were consistently helpful in the anti-communist struggle.

Trujillo’s political machine showed a few signs of wear and maladjustment in the face of a modest deterioration in the economic situation. He curtailed beneficial expenditures heavily but clever propaganda concealed this while magnifying his past and current achievements. Although some evidences of inefficiency in the Armed Forces, deterioration in the positions of the middle and laboring classes and signs of scattered discontent could be discerned, the regime’s stability seemed unimpaired.

Dominican exports declined approximately 10% during 1953, but a corresponding adjustment in imports avoided serious balance of payment difficulties. The conclusion of the International Sugar Agreement mitigated fears about the disposal of the 1953–4 sugar crop, and high coffee and cacao prices induced moderate optimism. Nevertheless, the country experienced a minor depression during the second and third quarters although business conditions and employment were somewhat better at the year’s end.

In a series of complicated financial transactions, Trujillo cancelled the internal public debt and bailed himself out of the sugar industry. His propaganda lauded these moves, but they actually doubled the Republic’s financial liabilities, inflated the credit structure, and undermined the stability of the banking system and the currency. Considerable uncoordinated expenditures on economic development increased national productivity somewhat; but the measure of diversification achieved failed to counter a further expansion in sugar cultivation, and the climate for foreign investment deteriorated badly. Trujillo extended totalitarian controls to new areas of the economy and his greed for personal aggrandizement showed no signs of abating. His personal fortune and income and the scope of his private economic interests expanded impressively.

Conclusions

1. Trujillo’s psychosis has already driven him into several unstatesmanlike actions and it now threatens some of the solid achievements of his earlier years. It is so far advanced that we must take full account of it, both positively and negatively, in our day to day dealings with him. Nevertheless, he still dominates his people and probably will continue to do so in his remaining years unless his malady takes a rapid change for the worse or external circumstances intervene. However, it seems unlikely that he will reach an exceptionally old age.

2. His political machine is still strong and its agencies of repression are more than adequate for all likely contingencies. But the disparity between Trujillo’s propaganda claims and his performance is now fantastically great, and the public’s reaction, when his dishonesty is finally revealed, will be correspondingly violent. Present evidences of discontent are unimportant but dissent could increase rapidly if a major depression should occur. In this case the Jefe probably will exploit xenophobia and class and racial prejudice to turn popular discontent away from himself. The situation after Trujillo’s death is unpredictable, but we doubt that any of his relatives or intimates could hold things together very long.

3. We should make greater efforts to prevent identification of the United States with Trujillo in the minds of the Dominican people in light of his growing excesses and the likelihood that he has only a few more years. Our cooperation can no longer be justified on the ground that his regime is beneficial to the continued political and social development of the Dominican Republic and only an overweening need for his military assistance should sanction a continuance of our relations with him on any level other than that of polite but uneffusive diplomatic intercourse.

Trujillo may honestly desire to maintain the closest possible relations with the United States, as he frequently alleges—but only on his own terms, including our acquiescence in his eventual absorption of most of the American capital invested here. We can never hope for stability in our relations with him and we must continue to expect a weird mixture of abuse and praise. His recent efforts to improve his public relations in the United States must be received with grave suspicion, in light of his possible goal of mobilizing opinion against the Department. We must discount very heavily the value of his collaboration in the anti-communist campaign because of his frequent abuse of our officials and of American capital, and because collaboration with him injures our reputation with more respectable governments of the international community.

4. The basic imbalance in the Dominican economy has not been remedied and prospects for early improvement are poor. Consequently a major depression can be expected if prices of sugar, coffee and cacao decline simultaneously, if sugar prices drop substantially below present levels, of if the present sellers’ markets for coffee and cacao disappear.

Trujillo’s greed for wealth and power and his tremendous energy are driving him irresistibly toward broader and deeper intervention in the Dominican economy. His personal fortune and income is already enormous and his insatiable thirst for power is rapidly bringing the other areas of the economy under totalitarian control. A reversal of previously sound fiscal, banking and monetary policies occurred with startling suddenness during 1953, in consequence of his efforts to liquidate and profit on his investment in the Dominican sugar industry. His greed for wealth and power also compelled him to intensify his attacks on foreign enterprises. Unless these trends are reversed, the Dominican Republic will soon have a completely managed economy, including a fiat currency and exchange controls, and it will cease to offer any attractions for foreign capital. Since Trujillo’s social philosophy now seems to resemble Peron’s, few observers take a sanguine view of the prospects of the Dominican middle class.

These gloomy observations on economic trends do not warrant the conclusion that a major deterioration in the economic and social situation would seriously embarrass the regime, although it would greatly complicate the problems of any successor government. On the contrary, we are constrained to feel that propaganda and force will enable Trujillo to go on milking the Dominican cow with increasing thoroughness until his death. The precedents offered by Hitlerite Germany, the USSR, Franco’s Spain and Peron’s Argentina incline us towards this view.

5. In light of the developments summarized above we recommend most strongly that a basic review of our Policy Statement on the Dominican Republic be undertaken. We also recommend that the Department consider making much more information about the Dominican Republic available to our people, either directly or by encouraging respectable journalists to come here, with a view to counteracting Trujillo’s misleading and inaccurate propaganda especially about investment conditions.

For the Ambassador:

Richard A. Johnson

First Secretary of Embassy

1. Despatch 621, from Ciudad Trujillo, contained a review of political and economic developments in the Dominican Republic during 1953 (739.11/1–1854).
2. An extract from the referenced despatch is printed supra.
3. Despatch 920, from Ciudad Trujillo, reported on general political developments in the Dominican Republic during 1953 (739.00/4–654).
4. Despatch 957, from Ciudad Trujillo, contained the Embassy’s annual economic report for the Dominican Republic for 1953 (839.00/4–2754).