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

241. Memorandum From the Officer in Charge of Brazilian Affairs (Siracusa) to the Assistant Secretary of State for Inter-American Affairs (Rubottom)¹

Washington, May 15, 1958.

SUBJECT

• Brazilian Military Negotiations

I. AIRCRAFT CARRIER EQUIPMENT

Background

During your absence, we attempted to prevent a Department of Defense reply to our letter² on the grant-aid program contrary to our policy against including equipment for the aircraft carrier.³ To this end, on May 9, Mr. Murphy talked to Mr. Irwin, Acting Assistant Secretary of Defense. Mr. Irwin said his own opinion “rather coincided” with State’s, and offered to try to persuade others in Defense, particularly the Navy, to go along.

Whatever Mr. Irwin may have tried, it apparently did not succeed. The following day, Admiral Libby, Deputy Chief of Naval Operations, called on Mr. Murphy. He delivered a copy of the signed Defense letter⁴ which urges reconsideration of our position vis-à-vis the carrier. We are also informed that he “about seven-eighths convinced” Mr. Murphy to accept the Defense position.

Admiral Libby’s personal call and the failure of whatever persuasion Mr. Irwin may have attempted indicate the strength of the Navy view and the willingness of others in Defense to support it, whatever they may believe. Admiral Libby’s call also tends to confirm reports of Admiral Burke’s personal interest in this matter.

Problem

ARA must now decide whether or not to continue to oppose inclusion of the carrier items as grant-aid.

Defense Position

Defense argues its case largely on the grounds of national interest and military necessity, making the following principal points:

1. Inclusion of the carrier equipment as grant-aid is of great importance to the successful termination of the military negotiations with Brazil.

2. Refusal to include the equipment would produce resentment detrimental to our military relations with Brazil and thus to our interest there, possibly to the extent of jeopardizing Brazilian cooperation in our utilization of the missiles tracking station.

3. Support for the Brazilian carrier is justified because the carrier would be useful in performing the major task of assisting United States forces in anti-submarine warfare.

4. The assistance contemplated would establish no precedent for our helping other nations acquire a carrier.

5. If necessary, we can justify carrier aid on a quid pro quo basis, relating it to the paramount urgency of our need for the Fernando de Noronha station.

Comment

Points one, two, and three appear valid. While we would prefer not to admit to others the quid pro quo of the current negotiations with the Brazilians, point five is valid to the extent that we have already decided that, if necessary, we will have to admit it to justify and defend other aspects of the program, such as our payment of rehabilitation costs of the destroyers for Brazil⁵ while requiring all other Latin American countries to assume these costs themselves. There is no controlling reason, therefore, why we cannot use the same argument to defend the providing of carrier equipment. Point four is probably the most questionable of the Defense arguments since other Latin American countries could claim that our assistance to the Brazilian carrier associates us with the promotion of a naval imbalance harmful to their interests, and that we therefore have an obligation to help restore the balance by assisting in the acquisition of carriers by those countries. However, while it might be resented, we could assert the contrary and, if pressed, agree to limit ourselves to equivalent aid of another country [less than 1 line of source text not declassified] spend the many millions of dollars necessary to acquire a carrier on its own. As for our providing or selling a carrier, Defense says it is “extremely doubtful” that Congress would authorize the transfer of a carrier to any country.

If it can be accepted from the above that providing the carrier equipment would:

1) promote better politico-military relations with Brazil,

2) help safeguard our own interest there, and

3) not produce unmanageable problems with other countries requesting similar aid,

it remains to be decided whether or not other principal arguments supporting State’s present position are overriding. These are:

1) the lack of any economic justification for the aircraft carrier vis-à-vis the many more pressing and constructive Brazilian needs which must be deferred [less than 1 line of source text not declassified] and

2) the critical attitude of some members of Congress toward our military relations in Latin America and the prospect that aid for the carrier could be used by them to threaten these programs.

As for the first point, it appears inevitable that Brazil is going to devote resources to the carrier whether or not we help. [1 sentence (4 lines of source text) not declassified] Since Brazil has no dollars, her decision to accept our offer to sell the equipment on credit (should we refuse grant-aid) would only mean an additional debt to be financed indirectly from the proceeds of whatever financing they may obtain from current negotiations with the IMF and the United States. As a result, insistance on our position, [1 line of source text not declassified] will actually deplete Brazilian dollar availabilities by the value of the equipment they buy, to the detriment of more worthy economic needs.

The most troublesome problem is the possibility that carrier aid could strengthen Congressional critics of our Latin American military programs. To defend against this we would probably have to rely on the sum total of the Defense position, explaining our lack of alternative in view of the bargaining posture of the Brazilians and the high priority of our need for the missiles tracking station.

In making its final decision, ARA should also give due weight to the isolation of its viewpoint on this matter and to the expectation that problems generated by the policy will cause increasing pressure from all quarters for its change or relaxation. As a result of such pressures, it seems unlikely that we can hold the line for more than another two years when the Brazilian carrier will be in commission. If this is correct, would the advantages to be gained, or the disadvantages to be avoided, be so compelling as to warrant the risk of alienating the Brazilian Navy and the possible consequences affecting not only our general politico-military relationship but also our satisfactory use of the important missiles tracking station? We will have to be confident that these consequences can be avoided in order to persuade Mr. Murphy to try again to override the now-recorded Defense plea based on national interest and military necessity. All things considered, I do not now have that confidence.

Recommendations⁶

1. That we agree now to withdraw objection to including the specified carrier items on a grant-aid basis.

2. That it be made clear to Brazil that this is a one-time operation, with no precedent for future aid of any kind regarding the carrier, its equipment, maintenance, or support.

3. That we make clear in our letter to the Department of Defense that our agreement against many valid reasons to the contrary responds only to their urgent recommendation that refusal to provide the equipment would so affect our military and naval relationships with Brazil that utilization of the important guided missiles tracking station might be jeopardized, to the detriment of our national interest.

4. That we make clear our misgivings regarding the effect on other nations and in the Congress, and our reliance therefore on Defense to justify these items before the Congress if necessary and to cooperate to the fullest in resisting pressures from other countries for carrier aid of any kind. In the latter connection, we might ask Defense to draw up instructions to its representatives in other Latin American countries which would forcefully spell out policy against encouraging aircraft carrier aspirations and direct its personnel to dispel any thought of assistance from the United States for this purpose.

Action Note:

1. If you concur in the recommendation, the response to the letter from the Department of Defense will be drafted accordingly, with the accompanying explanatory memoranda to Mr. Murphy and Mr. Dillon.

2. If you do not concur, we will prepare a memorandum to Mr. Murphy and/or to Mr. Dillon seeking to have them make a final effort to reach agreement with Defense on our terms. Whatever is agreed upon in such a discussion could then be incorporated into State’s reply since further correspondence with Defense on this matter, except to record agreement already reached, seems unavailing at this point.

II. TIME-PHASING OF PROGRAM

In our response to Defense we recommend that the program be phased over four years instead of three as requested by Brazil. Defense has now asked that we reconsider this recommendation for the following reasons:

1. Three-year phasing makes the package more attractive to Brazil, especially since first deliveries cannot be made before about January 1959, two full years after signature of the guided missiles tracking station agreement.

2. Obtaining funds on a fiscal year basis means that our last approach to Congress (for the final part of a three-year program) would be in Fiscal Year 1961 to finance deliveries in Fiscal Year 1962. Since this would stretch deliveries out to from five to six years after the signing of the missiles tracking agreement, we should not add another year.

Mr. Spencer and I originally preferred the three-year program but agreed to adding a year at the urging of the W/MSC and E. These divisions feel that four-year phasing will make it easier to sell the program to Congress in that we can then ask for less each year and the annual percentage increase over our normal program will be less.

Recommendation

Since some of the favorable impact on Brazil will be dissipated by a stretch-out of deliveries, it is recommended the ARA support the Defense request. If W/MSC and E feel such compression would jeopardize the program in Congress, however, I believe that we should not press the point and that Defense will not continue to make an issue of it.

1. Source: Department of State, ARA/EST Files: Lot 62 D 308, ARA:EST/B 1958 Folder #2. Secret. Drafted by Siracusa. Sent through Bernbaum who initialed it.
2. Not further identified.
3. Reference is to the aircraft carrier H.M.S. Vengeance, purchased by Brazil from the United Kingdom reportedly for 6–7 million pounds in December 1956 and later renamed the Minas Gerias. In telegram 1368 from Rio de Janeiro, April 14, the Embassy recommended giving Brazil electronic equipment for the carrier under the expanded grant aid program under negotiation in order to maintain the good will of the Brazilian military. (Department of State, Central Files, 732.5–MSP/4–1458)
4. Not further identified.
5. An agreement for the loan of two destroyers to Brazil was effected by notes exchanged at Rio de Janeiro, September 18 and October 19, 1959; for text, see 11 UST 236.
6. There is no indication on the source text of Rubottom’s decision on the recommendations.