144. Memorandum of a Conversation, Department of State, Washington, January 13, 19552
SUBJECT
- State–Defense Talks regarding Azores Negotiations
PARTICIPANTS
- Mr. Hensel—Assistant Secretary of Defense
- Mr. Merchant—Assistant Secretary of State
- Ambassador Bonbright
- Mr. Elbrick—Deputy Assistant Secretary of State
- Admiral Davis
- Admiral Hughes
- General Smith—Commanding Officer, Lagens, Azores
- Mr. Sullivan—Department of Defense
- Mr. Xanthaky—Special Assistant, Lisbon
Secretary Merchant opened the meeting by explaining the origins of the present nadir in our relations with Portugal which was highlighted by the recent nonacceptance of the invitation extended to President Craveiro Lopes to visit this country.3 He added that the Department would endeavor to do what it could to correct that situation but stated that this might not be easy since the Goa issue is complicated, as far as we are concerned, by our sensitive relations with India. He said it was the opinion therefore of the Department and our Embassy in Lisbon that in the circumstances it would be desirable to [Page 440] avoid at this time any major negotiations on a political level with Portugal. Admiral Davis called attention to the urgency of the new defense requirements and Ambassador Bonbright suggested that consideration should be given to the possibility of obtaining these objectives on a purely military and technical level; in other words, through a direct approach by General Smith, backstopped by the Embassy, with the Minister of Defense, Santos Costa. The Ambassador felt it would be unwise at this time to talk to the Portuguese regarding the renewal of the Azores Agreement, which would mean bringing the Foreign Office into the picture, where we could expect obstacles. Mr. Hensel appeared to be in agreement with Ambassador Bonbright’s suggestions.
The Ambassador pointed out that we still have almost two years to run under the Agreement and stated that along about the fall of this year the question of the renewal might then be officially broached. By that time he hoped that the climate would be more favorable. The Ambassador also expressed the hope that for our immediate objectives in the Azores, i.e., increase in personnel ceiling, stationing of three early warning squadrons, stationing of a Fighter Interceptor squadron and substantial additional land areas, we would be able to meet at least in part Santos Costa’s equipment requirements (armored cars). The Ambassador felt that such a gesture on our part would contribute greatly to “sweetening” the atmosphere.
General Smith was entirely in accord with Mr. Bonbright and emphasized that if such action was taken it should not be done on an obvious “quid pro quo” basis; that the Defense Minister, who is a tried and proven friend, is not susceptible to that type of tactics and that in order to get maximum effect from such a gesture we should, if possible, give Santos Costa what we can in advance of his (General Smith’s) initial approach. Mr. Hensel inquired whether this altered previous ideas concerning Santos Costa’s visit. Mr. Bonbright expressed the view that if it were possible to tie in the visit with Santos Costa’s matériel requirements, particularly the 175 armored cars which are apparently close to his heart, it would have more purpose than a purely good will visit which might not have much appeal at this stage of our relations. General Smith agreed with this as well as the Ambassador’s suggestion that our Sal Island requirements should be kept separate from the Azores package and that in this case as well the approach should be on the technical level again with the support of the Embassy. Mr. Hensel raised no objections.
Mr. Hensel remarked that he had always thought that all the Azores question involved was a matter of exchange of our “hardware” (which, he said, might not be available) for their facilities but that he could see that the problem was not as simple as that. Mr. Xanthaky remarked that under Article VII of the present Agreement we were [Page 441] obligated to get out of the Azores on December 31, 1956 and that it might be a good idea to reassess our investment in the Islands; he thought that our stake there amounted to over $200,000,000, which General Smith confirmed, and that perhaps we ought to tackle the problem from the point of view of how much we have to spend in order to protect our investment. Mr. Hensel thought that this aspect should be considered and instructed Mr. Sullivan to gather all information on the subject and suggested that the matter be reviewed with the idea of seeing what Defense can do in the way of meeting Portuguese matériel requests. Mr. Hensel also instructed Mr. Sullivan to look into the phasing and volume of our new defense requirements in the Azores, in the light of the situation as outlined by Mr. Merchant and Ambassador Bonbright. It was agreed that a Working Group under the supervision of Admiral Davis would examine the matter further.