Foreign Relations of the United States, 1958–1960, American Republics, Volume V

12. Regional Operations Plan for Latin America Prepared for the Operations Coordinating Board¹

Washington, July 1, 1959.

[Here follow a statement of purpose, table of contents, introduction, and section A, entitled “Objectives and General Policy Directives.”]

B. Operational Guidance²

Areas Requiring Special Emphasis and Urgency

4. General—The objectives and guidance supplied in this Operations Plan are intended to give direction to the implementation of the long-term U.S. policies towards Latin America as well as those short-and intermediate-term policies and programs required by the current necessities of the international situation and the current problems of the area. However, it is recognized that, in the next several years, the United States must address itself with a sense of urgency to the key problems which have developed in the course of the accelerated rate of political, social, economic, and attitudinal changes which have been accompanied by rising nationalism, the crystallizing of certain anti-American outlooks, and persistent efforts by the international Communists to precipitate a basic division between the United States and Latin America.

Accordingly, in the implementation of the policies and operations outlined in this Plan, priority attention and special emphasis shall be given in the next several years to the following:

5. Political

a. Strengthening inter-American solidarity and particularly the Organization of American States (OAS), improving its capabilities to maintain the peace of the hemisphere. The preparations and follow-up for the Eleventh Inter-American Conference scheduled to be held in Quito early in I960³ should provide a focal point for improving and enhancing the prestige of the OAS and related inter-American bodies.

b. Strengthening friendly relations with Latin American governments on a bilateral basis, with special emphasis on those which have a genuinely popular base and are effectively striving for the firm establishment of representative democracy.

c. Utilizing the potential of moderate elements of anti-Communist leftists and/or nationalist political and labor movements and other groups, as well as encouraging an increasing willingness by those elements resisting change to adjust to the political, economic, and social changes of the times, as a means of limiting and countering communism.

d. Encouraging the development of non-Communist free labor organizations.

e. Maintaining the political and moral support of the Latin American governments and peoples for U.S. world policies.

f. Limiting, to the maximum degree possible, Communist and Sino-Soviet bloc influence in the area, and promoting a greater awareness of the nature and threat of international communism in Latin America.

6. Information and Cultural

a. Increasing mutual understanding and the sense of interdependence between Latin America and the United States, with special and urgent attention to such key opinion-forming groups as students, intellectuals, and labor; placing special emphasis, as a matter of urgency, on increased information and cultural activities designed to present the United States as a constructive force cooperating with Latin America on a basis of partnership; promoting greater understanding and acceptance by Latin American countries and peoples of primary responsibility for progress, and obtaining a better mutual understanding by the peoples of Latin America and the United States of each other’s special characteristics and problems.

b. Recognizing that one of the key problems of U.S.-Latin American relations is psychological and that Latin American attitudes toward the United States have deteriorated, the actions we take may be no more important to the achievement of our objectives than the way in which we take them. This must be emphasized in all our operations in Latin America.

7. Economic

a. Encouraging Latin American governments to adopt those sound fiscal and economic policies essential to their economic development, supporting the International Monetary Fund (IMF) and other international agencies whenever appropriate in bringing about needed fiscal and economic reforms and improvements.

b. Fostering the steady growth of inter-American trade by supporting measures consistent with the expansion of trade on a multilateral worldwide basis; avoiding to the maximum extent possible restrictive practices which affect key Latin American exports to the United States; being prepared to discuss and explore possible approaches to commodity problems in accordance with U.S. policy on international commodity agreements; encouraging the establishment of customs unions or free-trade areas conforming to GATT⁴ criteria; be prepared to endorse proposals for regional preference arrangements which do not conform to GATT criteria if consistent with the United States over-all foreign economic policy.

c. Encouraging Latin American governments to base their economies on a system of free private enterprise adapted to local conditions and create a more favorable climate for Free World private investment in the area, including small- and medium- as well as large-scale investment enterprises.

d. Recognizing that Latin American economic development will require an additional flow of private and public capital, encourage Latin American nations to make maximum contribution to their own economic development; encourage Latin American nations to look to private capital and international lending institutions as major sources of external capital for development; be prepared to extend public loans which are consistent with relevant U.S. loan policy considerations seeking by the use of appropriate U.S. Government lending institutions to make a substantial flow of capital available for economic development; facilitate, as appropriate, favorable consideration of applications to international institutions for credits consistent with U.S. loan policies; be prepared to extend limited amounts of special economic assistance on a grant or loan basis in exceptional circumstances; encourage other free world countries to provide capital and technical assistance to Latin America.

e. Extending technical assistance in fields related to the political and economic objectives.

8. Military

a. Seek continued acceptance by Latin American countries of U.S. concepts for the defense of the hemisphere and of the role of Latin American military forces, making particular effort to orient Latin American military forces toward the United States and to discourage Latin American acquisition of military equipment not essential to the U.S. concept of the missions of Latin American military forces.

Political

All activities of the U.S. Government during the anticipated period of continued political change and instability in Latin America shall be carried out in line with the guidance contained herein.

9. Non-Intervention Policy—The United States shall continue to adhere to the policy of not intervening unilaterally in the internal affairs of the other American Republics. In contingencies where the non-intervention policy may appear to be inadequate to safeguard vital U.S. interests and obligations, additional guidance shall be sought.

10. Recognition—The United States shall recognize all Latin American governments qualifying for recognition under the accepted criteria of international law, unless a substantial question should arise with respect to Communist control. United States recognition policy in the case of a government concerning which there is a substantial question of Communist control [1/2 lines of source text not declassified].

11. Maintenance of Peace Within the Hemisphere

a. The United States shall take all practicable measures, within the limitations of the non-intervention policy, to prevent armed conflicts between states in the Western Hemisphere. It shall (1) encourage and support actions by the Organization of American States (OAS) to solve peacefully disputes involving, or likely to involve, armed conflict between American states; (2) insist that, in accordance with the UN Charter, the OAS has priority of responsibility over the UN Security Council with respect to threats to the peace arising among the American Republics; and (3) assist American states resisting pressures from their neighbors, when such pressures are inimical to U.S. interests and to the peace of the hemisphere.

b. Fulfill U.S. obligations in conjunction with Brazil, Argentina, and Chile as co-guarantor of the Peruvian-Ecuadoran boundary, work toward a peaceful settlement of the Nicaraguan-Honduran boundary dispute; and seek to prevent other boundary and territorial disputes from developing into threats to the peace and/or a justification for the maintenance of armaments by the disputants.

12. Hemispheric Solidarity—The United States shall seek to strengthen hemisphere solidarity by:

a. Strongly supporting and strengthening the OAS, utilizing it whenever feasible as a principal means of achieving our objectives and as a major forum for multilateral discussions of political and economic questions affecting the hemisphere.

b. As may be appropriate, seeking to bring the Inter-American Defense Board into closer relationship with the Council of the OAS and to utilize the Advisory Defense Committee of the OAS.

c. Obtaining greater understanding and acceptance by Latin American countries of the inter-relationship of the security of the Western Hemisphere and the security of other areas of the Free World.

d. Maintaining close liaison with the other American Republics with a view to maintaining their support for the U.S. position on key issues arising in the United Nations affecting the security of the Free World, but: (1) refraining from placing heavy pressure on Latin American governments on less important issues, and (2) recognizing the differences between the position of the United States and of most Latin American states on issues concerning economic assistance to underdeveloped areas, intervention, and colonialism, among others.

e. Consulting with Latin American states, whenever possible, before taking actions which will affect them or for which we wish their support.

f. Promoting with appropriate Latin American leaders close personal relationships and encouraging reciprocal visits by appropriate high government officials and distinguished personages.

g. When feasible, bringing Canada, Puerto Rico, (and, as it gains greater autonomy in foreign affairs, the West Indian Federation) into closer relationship with the inter-American system.

h. In carrying out the above, account should be taken of the fact that preparation for, the holding, and follow-up of the Eleventh Inter-American Conference at Quito in February 1960 will provide a focal point for strengthening hemisphere solidarity.

13. Colonialism—The United States shall:

a. Encourage acceptance and implementation by the interested European states of the principle that dependent and colonial peoples in this hemisphere should progress by orderly processes toward an appropriate form of self-government.

b. When disputes between American and non-American states over dependent territories cannot be settled by direct negotiations, encourage peaceful settlements by other methods available to the parties.

14. Canal Zone and Three-Mile Limit—The United States shall:

a. Maintain in force all the rights, power and authority granted the United States by the Convention of 1903 (as amended) with Panama, as the basic treaty covering the status of the Canal Zone;⁵ seeking positive means of diverting Panamanian attention from the Canal problem to economic development.

b. Unless other criteria are accepted, refrain from giving juridical or de facto recognition to claims by Latin American governments to sovereignty beyond the three-mile limit and endeavor to obtain support for or acquiescence in the U.S. position.

15. Communism—In order to limit to the greatest extent possible in the next few years Communist influence in Latin America, the United States and its representatives shall give sustained attention and a high priority to activities designed to restrict and reduce Communist capabilities and efforts to exploit economic, political, and social maladjustments or subvert the military and internal security forces. The United States shall take the following actions:

a. Awareness of Threat—Seek to create greater awareness of the specific threats posed to Latin America as well as to world security by Communism by (1) exposing, [1 line of source text not declassified] the activities of local Communist parties and of the Soviet bloc as they relate to Latin America; and (2) carrying out, as appropriate, a prudent exchange of information with Latin American governments on Communist and Sino-Soviet bloc activities.

b. Obligation of Other States—Obtain maximum recognition by those states which have ratified Resolution 32 of the Ninth Inter-American Conference at Bogota and/or Resolution 93 of the Tenth Inter-American Conference at Caracas of their continuing obligations under these articles with respect to Communism.

c. Individual and Collective Action—To the extent feasible and under methods and procedures which are prescribed by the Department of State to guide personnel operating in the field, encourage individual and collective action by the other American Republics against Sino-Soviet bloc influence and Communist or other anti-U.S. subversion, including:

(1) Adoption and enforcement of adequate laws to control Communist activities.

(2) Restriction on the entry, production, and dissemination of Communist and bloc information and propaganda material.

(3) Restriction on the admission to Latin American countries of identified Communists and of individuals or groups from the bloc when the intent is to raise the prestige of Communism and the Communist countries.

(4) Limitation of trips by Latin American nationals to bloc countries and to Communist international front meetings.

(5) Prevention of the opening of new diplomatic and consular establishments by bloc countries and limitation on the size of the staffs and the activities of existing establishments.

(6) Prevention of direct or indirect trade in strategic materials with the Sino-Soviet bloc.

(7) Prevention of trade with the bloc (a) on prejudicial terms, or (b) at levels or in fields which would create damaging dependence on the bloc or result in a significant bloc influence over the international actions of the country. Within these limitations, normally refrain from discouraging Latin American countries from trading non-strategic surplus commodities to the European Soviet bloc for consumer goods or other products they can use. [1 sentence (41/2 lines of source text) not declassified]

(8) Rejection of bloc aid in sensitive areas and exclusion of bloc specialists and technicians.

16. Internal Security—The United States shall:

a. Implementation of the Program—Proceed, as feasible, in selected countries with the implementation of the program for strengthening the capabilities of the local public safety forces and activities necessary to maintain internal security and to render ineffective the Communist apparatus, but take into account the dangers of U.S. association with local public safety forces which adopt extra-legal and repressive measures repugnant to a free society.

b. Expanded Assistance—Where appropriate, strengthen the civil or military security apparatus of Latin American governments responsible for maintaining surveillance over and for combatting Communism. On an expanded basis offer technical training, advice, and, to the extent deemed essential, equipment to strengthen the administration, organization and techniques of internal security forces where such assistance is requested and is deemed important to United States objectives.

c. Special Training—Where advisable, train selected Latin American military officers in counter-intelligence operations, with emphasis on detection of Communist activities, and assist in establishing effective military counter-intelligence organizations throughout Latin America.

d. Country Programs—The Overseas Internal Security Annexes to the Operations Plan for Latin America, dated May 28, 1958, have been superseded. The programs represented by these Annexes (Bolivia, Brazil, Chile, Guatemala) remain valid, however, and will be continued by the responsible agencies under new procedural arrangements. Under these procedures each department and agency participating in the OISP has designated a central point of contact to serve on an informal inter-agency group to expedite and facilitate the coordination of the planning and implementation of these programs. In cases involving the initiation of an internal security program in any country or a major change in an on-going program, the new procedures provide that, in the absence of specific OCB guidance, the Coordinator of the Mutual Security Program make a specific determination that such action is in the national security interest.

17. Relations with “Democratic” and “Dictatorial” Regimes—The United States shall maintain correct diplomatic and other relations with all recognized governments. Where possible, it shall give special encouragement to governments which have a genuinely popular base and are effectively striving towards the establishment of representative and democratic governments. It shall seek to counter any impression that the United States favors dictatorships, either of the right or the left. (See also para. 34. d with respect to the provision of military equipment.)

18. Contacts with Political Groups and Leaders

[paragraphs 18–a (4 lines of source text) and 18–a–l (31/2 lines of source text) not declassified]

b. Opposition Elements—United States representatives shall maintain contact with elements of the opposition to recognized governments to the extent and at a level which (1) will not seriously impede the achievement of U.S. objectives through the recognized government; (2) will not associate the United States with efforts to overthrow recognized governments by unconstitutional means; or (3) will not create an impression that the United States supports or condones the establishment of authoritarian regimes, either rightist or leftist; [21/2 lines of source text not declassified],

c. National Leaders—The United States and its representatives should increase efforts to influence present and potential political, military and labor leaders, journalists, radio commentators, educators, and others exercising substantial influence over the opinion-forming process.

(1) This guidance implies increased recognition on the part of U.S. representatives of the potential significance of popular good will and popular understanding as an influence on inter-governmental cooperation. In those instances where forthright explanation of U.S. policy can dispel popular distortions of an issue and restore confidence in the intentions of the United States, such action should be taken promptly unless it is apparent that such action might involve a net disadvantage to the over-all interest of the United States.

d. See also “Intellectuals and Students” (Para. 23, page 18).

[paragraph 18–e (2 paragraphs—20 lines of source text) not declassified]

19. Labor—The United States Government and its representatives shall discreetly encourage non-Communist labor organizations; encourage U.S. labor organizations to carry out sound programs designed to strengthen free labor in Latin America; encourage and support the training of anti-Communist labor leaders in the United States and other countries of the hemisphere; encourage, as may be appropriate in individual countries, the activities of the Organización Regional Inter-Americana de Trabajadores (ORIT) and other Free World labor organizations; in the employment of local labor by the U.S. Government pursue exemplary labor practices and encourage such practices on the part of private U.S. employers; encourage Latin American countries to increase incentives tending to influence labor toward a democratic system based on free enterprise; and, as may be appropriate, encourage and conduct labor information activities designed to counteract Communist infiltration in labor organizations and to assist them in learning the purposes and methods of free trade union organization.

[paragraphs 19–a (11/2 lines of source text) and 19–a–l (31/2 lines of source text) not declassified]

(2) encourage and support Latin American governments to counteract Communist influence in labor organizations and, when consistent with the principle of non-intervention, to promote free trade unionism.

b. The problem of strengthening free labor in Latin America in the light of the advances made by the Communists in the labor field in recent years is considered of the utmost urgency. It is intended that agencies concerned with Latin America’s labor problem should as quickly as possible develop and intensify coordinated programs to strengthen free labor in the area.

20. U.S. Business Executives—The United States shall encourage U.S. business leaders constructively to assist in the attainment of U.S. objectives in Latin America by such actions as participating in the exchange of persons; setting up bodies for the coordination of U.S. business community activities in Latin America; participating in local civic, charitable, and cultural organizations engaged in social improvement activities; and taking appropriate steps so that irresponsible U.S. businessmen who may have contacts with high government officials do not conduct themselves in a manner which reflects unfavorably on the United States business community.

21. Attitudes Toward U.S. Personnel Overseas—The United States shall:

a. continue to take positive actions to improve foreign attitudes towards U.S. personnel overseas and to remove sources of friction. The special report prepared by the OCB, “United States Employees Overseas: An Inter-Agency Report,” dated April 1958 is an effort to provide a common approach and guidance in this field.

b. hold to a minimum consistent with the program requirements the number of U.S. citizens employed by the U.S. Government in Latin America; insure that newly assigned U.S. personnel receive orientation and that their dependents receive appropriate indoctrination in the field; and periodically remind them that they represent the United States abroad and are expected to maintain a high standard of personal conduct and of respect for local laws and customs.

Informational and Cultural

22. Cultural Programs—The United States shall continue to maintain informational and cultural programs in each of the Latin American republics, utilizing all appropriate media and techniques to influence popular opinion on behalf of U.S. policy objectives.

23. Intellectuals and Students—The United States shall devote increased attention to the development of attitudes favorable to U.S. policy objectives among the Latin American teaching profession, students and intellectuals by such means as

a. exchange programs specifically designed to influence attitudes in educational systems;

b. cultural, sports and information programs specifically planned to enhance U.S. prestige among such groups;

c. encouraging private U.S. organizations capable of increasing their efforts in these and related fields; and

d. encouraging other Free World governments, groups and individuals to supplement U.S. efforts in these respects.

24. Special Activities—In addition to lines of action indicated elsewhere in this paper, the United States shall place special emphasis, as a matter of urgency, on increased U.S. informational and cultural activities designed to:

a. present the United States as a constructive force cooperating with Latin America on a basis of partnership toward the achievement of a greater measure of political and economic progress;

b. promote greater understanding and acceptance by Latin American countries and peoples of primary responsibility for progress;

c. obtain a better mutual understanding by the peoples of Latin America and of the United States of each other’s special characteristics and problems. It should be noted, however, that departments and agencies of the executive branch have statutory and other limitations which in practice limit government activity designed to bring about a better understanding of Latin America in the United States.

25. Promoting Understanding—Obtain the cooperation of the American Republics to assume a large measure of responsibility for promoting better mutual understanding between the United States and these countries through such means as the establishment of national commissions of distinguished citizens to work for these purposes.

26. Participation of U.S. Nationals—The United States shall, to the extent feasible, encourage U.S. nationals, including business and industry represented in Latin America, to participate broadly in efforts to achieve the purposes of the preceding paragraphs. (Also see paragraph 20.)

Economic

27. Trading Policies—The United States shall place special emphasis in the next several years on the establishment of conditions propitious for an expansion of inter-American trade, including:

a. Avoidance of Restrictive Trade Practices—The United States shall make every effort to maintain stable, long-term trading policies, and avoid, to the maximum extent possible, restrictive practices which affect key Latin American exports to the United States.

(1) In light of the adverse effect on U.S.-Latin American relations, of restrictive measures taken by the United States in 1957–59 with respect to the importation of certain non-ferrous metals and petroleum, it is of primary importance that the United States avoid, to the extent possible, further measures which would be taken as hurting Latin American opportunities to trade with the United States, and seek as quickly as conditions permit, to remove restrictions which have been imposed with respect to Latin American exports.

b. Solutions for Commodities Problems (See also Annex D)—The United States should demonstrate its concern for the commodity problems of Latin American nations. In an effort to find cooperative solutions, it shall be prepared to discuss and explore possible approaches to such problems in accordance with U.S. policy on international commodity agreements.

c. Customs Unions and Free Trade Areas—The United States shall encourage and endorse the establishment of customs unions or free trade areas in Latin America which conform to the criteria set forth in the General Agreement on Tariffs and Trade (GATT). It shall also be prepared to endorse proposals for regional preference arrangements which do not conform to GATT criteria, if consistent with over-all foreign economic policy. The current United States approach is to encourage and work with Latin American countries seeking to establish sub-regional customs unions or free trade areas such as the proposed Central American Common Market. The U.S. is prepared to consider financing for regional industries in the same manner as it considers financing for national industries.

d. Reduction of Trade Barriers—The United States shall work toward a reduction of tariff and other trade barriers with due regard to total national advantage.

e. GATT—The United States shall encourage those American Republics which are not now members of GATT to accede to GATT and to negotiate reductions of trade barriers within the GATT framework.

28. Economic Development—Recognizing the sovereign right of Latin American states to undertake such economic measures as they may conclude are best adapted to their own conditions, the United States should directly and/or indirectly encourage Latin American nations:

a. to make a maximum contribution to their own economic development;

b. to base their economies on a system of free private enterprise adapted to local conditions;

c. as far as practicable, to curtail diversion of public funds to uneconomic state-owned industries;

d. to take all feasible steps to create a political and economic climate conducive to private investment, both foreign and domestic; and

e. where appropriate, to diversify their economies on a sound basis.

Encourage efforts by the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD) to bring about desirable financial and economic reforms, seeking, insofar as practicable, to have those organizations take the major part of the responsibility for recommending and negotiating with Latin American governments programs of financial and economic reforms consistent with U.S. objectives. It is also planned that the Inter-American Development Bank shall make a contribution in this regard.

29. Technical Assistance—The United States shall seek to strengthen technical cooperation and to program it on a longer term basis. Technical assistance shall be granted on the basis that each recipient has a genuine interest in and desire for our participation in programs undertaken by it, and that U.S. participation makes a contribution toward the achievement of U.S. foreign policy objectives commensurate with its cost. Within these policy limits, increase specialized training of Latin Americans in host countries, the United States, including Puerto Rico, and third countries.

30. Peaceful Uses of Atomic Energy—Recognizing that early practical applications of peaceful uses of atomic energy should aid the economic development of the American Republics as well as provide favorable psychological impact, the United States shall continue to encourage the early application of radioisotopes to agriculture, medicine, biology and industry, and the development of appropriate national or regional programs for nuclear research and power. To this end, the United States shall continue financial assistance to research projects and cooperate in the training of specialists in atomic energy and in the development of nuclear power projects where they are feasible and desirable. The United States should also participate actively in the work of the Inter-American Nuclear Energy Commission of the Organization of American States (OAS) in order to develop a coordinated hemisphere plan for research and training in nuclear energy; and support an acceptable plan of this kind.

31. External Capital—The United States recognizes that Latin American economic development will require an additional flow of external private and public capital encouraging Latin American countries to look to private capital and international lending institutions as major sources of external capital for development.

a. Private Enterprise

(1) The United States should encourage Latin America to look to private capital from the United States and other Free World nations as a major source of external capital for development.

(2) The United States will seek to facilitate by tax and other actions the flow of U.S. investment into the less developed regions of the Free World, including Latin America. Where feasible, the United States will:

(a) Seek the early implementation, by treaty or by negotiated agreement authorized by legislation, of the principle of tax sparing in order to make it possible for American firms investing in a less developed country to benefit from tax inducements offered by such countries to attract new capital.

(b) Support legislative measures for the deferral of tax on income derived by a foreign business corporation which obtains substantially all of its income from investments in one or more of the less developed areas of the Free World and the ordinary loss treatment for losses incurred by original investors on stock of such a foreign business corporation.

(c) Negotiate investment guarantees.

(d) Where needed, negotiate treaties of friendship, commerce and navigation.

(3) Recognizing that there is a close relationship between a healthy local private enterprise and healthy conditions for foreign investment, the United States shall:

(a) treat, in discussions with host governments, the U.S. interest in encouraging private enterprise not merely in terms of private foreign investments, but also in terms of encouraging local investment and partnership arrangements between local and foreign investors.

(b) take into account small and medium size enterprises as well as large companies, in programs to stimulate private investment in Latin America.

(c) continue to emphasize the need for a framework of sound governmental laws and institutions relating to local and foreign private investment.

(d) carry forward programs—such as the Investment Guarantee Program,⁶ Cooley Amendment program,⁷ and if approved by Congress, the Investment Incentive Fund program—designed to assist in the development of private enterprise. In addition, employ as appropriate technical assistance and other appropriate means to encourage the establishment of proper local institutions for stimulating private savings, private investment and capital formation, and encourage legal studies in local educational institutions related to private enterprise and investment—without further stimulating the excessive tendency of Latin American students to become lawyers.

b. International Lending Institutions—The United States shall encourage Latin American countries to look to international lending institutions as well as private capital as major sources of external capital for development.

(1) The United States is prepared to facilitate as appropriate favorable consideration of applications to international institutions, including the Inter-American Bank when established, for credits consistent with U.S. loan policies and to support the approval of such applications by the boards of these institutions. The position of the U.S. representatives on the above international institutions is coordinated by the NAC.

c. U.S. Public Loans—The United States is prepared to extend public loans which are consistent with relevant U.S. loan policy considerations, and seeks by the use of appropriate U.S. Government lending institutions to make a substantial flow of capital available for Latin American economic development, to alleviate balance of payments crises, and stimulate economic reforms.

(1) Under present lending policy, as coordinated by the NAC, the Export-Import Bank serves as the principal agency of the U.S. Government for extending development loans in Latin America. It is United States policy to make known in Latin America that the Bank will finance all sound development projects in Latin America for which private capital is not readily available, provided each loan is: (a) in the interest of the United States and the borrowing country, (b) within the borrower’s capacity to repay, (c) within the Bank’s lending capacity and charter powers, and (d) sought to finance U.S. goods and services. The Development Loan Fund is prepared to consider loans for specific projects and programs which give promise of contributing to sound development of long-term benefit to the borrowing country. However, the DLF makes loans only when other sources of private and public capital are not available. Annex A–7 provides additional background on the purpose and inter-relationships of major U.S. and international lending agencies. The foregoing will apply until the Inter-American Development Bank is established and starts operations, at which time appropriate instructions will be issued regarding the inter-relationship of these institutions.

d. Special Assistance—The United States is prepared to extend limited amounts of special economic assistance on a grant or loan basis in those exceptional circumstances where other means are inadequate to achieve economic and political stability essential to U.S. interests.

e. Assistance From Other Countries—The United States shall encourage other Free World countries to provide capital and technical assistance to Latin America.

f. Inter-American Highway and Rama Road—The United States shall continue to assist in the financing of the Inter-American Highway and the Rama Road in accordance with existing agreements and established legislative authority.

g. Public Law 480—In carrying out programs involving disposal of U.S. agricultural surpluses abroad, the United States shall:

(1) Negotiate with Latin American governments sales of surplus agricultural commodities where appropriate.

(2) Give particular attention to the economic vulnerabilities of the Latin American countries and avoid, to the maximum extent practicable, detracting from the ability of these countries to market their own exportable produce.

(3) Encourage the use in the purchasing countries of the local currency proceeds of sale for loans for economic development purposes, with particular emphasis on private enterprise.

32. Use of Military for Development Projects—The United States shall encourage the use in peacetime of selected Latin American military personnel and units in development projects where such use will not interfere with the development of the capability of the units involved to perform their military missions or to meet the military requirements for which they were organized. Activities along this line may include training and the provision of ICA-financed construction equipment and materials to units where such activities will contribute to economic development through the construction of public service projects, including communications.

a. In the implementation of this program caution should be exercised to insure that organizational and training problems are solved prior to undertaking such development projects. Toward this end the Department of the Army is prepared to assist ICA to the extent of providing organizational training assistance and quotas for appropriate courses at the USARCARIB School in the Canal Zone. In addition, there should be adequate coordination at country level to insure compliance with the above-outlined limitations regarding non-interference with military capabilities.

Military

33. Military Strategic Concept—It is U.S. policy to:

a. assume primary responsibility for hemispheric military operations in the Atlantic and Pacific Oceans and the Caribbean Sea, including the sea and air approaches to the Panama Canal, and seek, in our military and other relations with the states concerned, acceptance of U.S. military control of the defense of these sea areas.

b. (1) encourage acceptance of the concept that each of the Latin American states is responsible for providing, through effective military and mobilization measures, a contribution to the defense of the hemisphere by insuring its internal security and by the defense of its coastal waters, ports and approaches thereto, bases, strategic areas and installations located within its own territory, and routes of communication associated therewith.

(2) in exceptional cases, be prepared to accept participation by a Latin American state in combined operations in support of U.S. military responsibility under 33. a. above, where its location and resources make such participation feasible, and where political or hemisphere defense considerations make such a course of action desirable in the interest of the security of the United States.

34. Military Assistance—The United States shall:

a. Make available to Latin American states, on a grant basis if necessary, the training and minimum military equipment necessary to assist them to carry out the missions relevant to hemispheric defense in the preceding paragraph, except that internal security requirements shall not normally be the basis for grant military assistance.

b. Discourage Latin American governments from purchasing military equipment not essential to the missions in Para. 33. b. above. However, if a Latin American government cannot be dissuaded from purchasing unneeded military equipment, and if it is essential for U.S. political interests, make additional equipment available on a cash, credit, or, under extraordinary circumstances, grant basis, if appropriate.

c. In order to be in a position effectively to supply military equipment on a reimbursable basis in accordance with Paras. 34. a. and b. above, make equipment available to Latin American countries on terms which insofar as feasible are sufficiently favorable to encourage the Latin American governments to obtain such equipment from the United States rather than from another source.

d. In making military equipment and training available to Latin American countries, take into account the provisions of Para. 17, relative to the type of Government involved, exercising caution in the provision of such assistance to dictatorships.

35. Standardization—The United States shall encourage, to the maximum extent consistent with the needs and capabilities of each Latin American nation, the standardization along U.S. lines of military doctrine, unit organization, and training. Except when it will create undue demand on the United States seek, in the interests of standardization as well as for other reasons, to discourage purchases by Latin American governments of military equipment from other countries, especially Communist countries, primarily by assuring the Latin American countries that we will endeavor to fill their essential requirements expeditiously and on reasonable terms.

a. The United States is also prepared, where appropriate, to seek to prevent other Free World countries from selling military equipment to Latin American states. However, since this may involve considerations affecting relations with other areas of the world, such actions will be coordinated in Washington.

36. Military Relations—The United States shall:

a. Seek to develop a conviction that collaboration, including military purchases, by any of the American states with Communist nations would be a serious hazard to all of the nations of this hemisphere.

b. Continue to participate actively in the Joint Military Commissions we have with Brazil and Mexico, and make effective use of the IADB to achieve our military objectives.

c. Foster close military relations with the Latin American armed forces in order to increase their understanding of, and orientation toward, U.S. objectives and policies, and to promote democratic concepts and foster pro-American sentiments among Latin American military personnel.

d. Continue, and establish where appropriate, military training missions in Latin American states, countering any trend toward the establishment of military missions, or agencies or individuals with a similar function, other than those of the American Republics.

37. Hemisphere Mapping Program—The United States shall seek the continued cooperation of the Latin American states in carrying out the hemisphere mapping program.

38. Training—The United States shall provide adequate quotas for qualified personnel for training in U.S. armed forces schools and training centers. Seek, as appropriate, new legislative authority to facilitate provision of such training to personnel from all Latin American countries.

a. Encourage Latin American governments to fill professional and technical military training quotas for members of their armed forces to U.S. Service Academies, armed forces Schools and technical training programs, in order that personnel from Latin American armed forces may become indoctrinated in our methodology and accustomed to our way of life including anti-Communist orientation. However, avoid providing categories and numbers which would tend to stimulate demands for non-essential military equipment or be in excess of the needs of the military organization.

1. Source: Department of State, S/S–OCB Files: Lot 62 D 430, Latin America—1959. Secret. Prepared by the OCB’s Working Group on Latin America, reviewed by the Board Assistants on June 12, and submitted to the OCB under date of June 19. At its meeting on June 24, the OCB revised and concurred in the plan for implementation by the responsible departments and agencies, except for paragraphs 31 a. and b., the procedural implications of which were deferred for subsequent discussion. The new plan superseded the Operations Plan for Latin America dated May 28, 1958, and was circulated under date of July 1, 1959. Additional revisions were incorporated into the plan on July 28, without changing its date. (Note by OCB Bromley Smith, undated; ibid.) The fully revised version of the plan is printed here.

   Annexes A–D, entitled respectively as follows: “Agency Current Programs,” “Financial Annex and Pipeline Analysis,” “Sino-Soviet Bloc Activities in Latin America (CIA),” and “U.S. Policy With Respect to International Commodity Agreements,” are not printed.

2. In a June 22 memorandum to Deputy Under Secretary Murphy, summarizing the new regional operations plan, Rubottom stated that most of the text of the plan was a “direct transcript” of NSC 5902/1, and that the principal new section was Section B “which selects areas of operations requiring special emphasis over the next few years.” (ibid., Rubottom Files: Lot 61 D 279, Policy 1959)
3. The conference was postponed several times to March 1961, and finally postponed indefinitely.
4. Reference is to the General Agreement on Tariffs and Trade, concluded at Geneva, October 30, 1947, and entered into force for the United States, January 1, 1948; for text, see 61 Stat. (pts. 5 and 6).
5. For text of the Isthmian Canal Convention, signed at Washington, November 18, 1903, and entered into force, February 26, 1904, see 33 Stat. 2234.
6. Under the Investment Guaranty Program, the U.S. Government provided, for a fee, insurance protection for American investors abroad against the risks of loss through confiscation or expropriation and currency inconvertibility. The implementation of the program involved the negotiation of bilateral investment guarantee treaties with other countries.
7. Reference is to the program authorized by an amendment, named after Representative Harold D. Cooley (D–NC), to Public Law 85–128, approved August 13, 1957, extending the Agricultural Trade Development and Assistance Act of 1954 (PL. 480). It amended Section 104 (e) of PL. 480 by providing that up to 25 percent of local currency proceeds from Title I sales would be made available for loans to U.S. and foreign private investors through the Export-Import Bank. For text of the amendment, see 71 Stat. 345.