25. Letter From the Chief of Naval Operations (Burke) to the Under Secretary of State (Dillon)1
My Dear Mr. Under Secretary: For some time I have been concerned over the delays that have plagued our plans to lend ships to several South American countries. I am sure that you, too, have been following developments in this matter and that you are just as eager as we in the Navy are to see a solution reached which will fulfill our [Page 163] commitments, real and implied, to our friends in the Western Hemisphere and at the same time is consistent with over-all political and economic considerations. Herewith is a summary of this ship loan program which I would like to share with you as representing our understanding of the situation. Perhaps it will help to provide a basis upon which a decision can be reached for early action in the matter.
As you know, the Latin American navies have been asking to obtain ships from us, through purchase or loan, for many years. In 1956 it was decided that it would be strategically feasible to lend a limited number of destroyer and submarine types, not required for our use, to certain of these navies and queries were sent out to the countries concerned preliminary to requesting legislation to authorize the loans. The countries indicated on the attached chart expressed enthusiasm for accepting the loan under the proposed conditions which specified, among other things, that the receiving nation would pay the cost of reactivation of the ships which would be taken from our Reserve Fleets. As a basis for their decision, the countries concerned were furnished the then estimated reactivation costs as set forth in the enclosure.
The appropriate legislation was requested of the 85th Congress in 1957 but no action was taken except that a substitute bill (PL. 85–220)2 was passed authorizing the sale of up to 3 destroyers and 1 submarine to Venezuela.
In 1958, Public Law 85–532 was passed by the 86th Congress authorizing the loan of not more than 18 ships to Latin American countries. This number was tentatively divided among the applicant countries as indicated on the attached chart.3
As soon as practicable after the enactment of this legislation, a Navy team under the Director, Foreign Military Assistance, Office of the Chief of Naval Operations, visited all of the countries concerned except Uruguay and Cuba to discuss technical aspects of the loan. An understanding was reached in each country as to the specific equipment to be furnished with each ship and itemized costs were estimated for reactivation and modernization of the ships. Due to rising costs during the ensuing delay of 28 months these reactivation costs were necessarily considerably higher than previously estimated.
It now became apparent that the receiving governments were ill-prepared to pay this cost of reactivation and modernization as they had informally agreed to do in 1956. Hopes were expressed by the various governments that the program might be financed through grant aid or, at least, a long-term credit procedure.[Page 164]
Recognizing that with changed conditions, due to both rising cost of reactivation and deteriorating economic circumstances, payment of the reactivation charges involved is, in fact, impracticable for most of these countries, the Defense and State Departments have been exploring the possibility of financing the program under MAP Grant Aid but little progress has been made. Recently, Ecuador has agreed to accept 2 PCEs, without cost, in lieu of a DE and Peru has accepted an offer of two minesweepers (MSF) to replace two of her obsolescent frigates. Argentina and Venezuela, having no bilateral Military Assistance Agreements with the U.S., are planning to pay for their ships. Brazil’s four destroyers are being transferred as a part of the special Fernando de Noronha Agreement.4 Consideration of a DE for Cuba was discontinued at the time of the recent revolution in that country. At the present time delivery of ships to Chile, Colombia, Ecuador, Peru and Uruguay is being held up pending agreement among the Departments concerned regarding the character of the FY 1960 Military Assistance Program for Latin America.
Delay in this program has been increasingly detrimental to our relationships with our Latin American neighbors. Although we have made no formal commitments, we have, by our proposals and discussions, given encouragement to their hopes that the Mutual Security Program will provide the means whereby these ships can be delivered; and we must recognize the unfortunate fact that the rising costs which prevail during each period of delay tend to relieve the Latin Americans of their informal agreement to finance the reactivations.
I hope you will pardon this rather long summary but in presenting it, I wish first, to review the Navy’s understanding of the present status; and second, to reaffirm the feasibility and desirability of this program from a military point of view. I feel that early action to enable us to carry out this program along the general lines of our original proposal is most desirable. If this cannot now be accomplished, I feel that early delivery of at least one ship to each of these countries is the least we can do to show that we are really interested in them and in their potential ability to help us in the defense of the hemisphere. There is no doubt in my mind that these navies are sincere in their desire to contribute and that we can help them to make the ships useful in our plans for hemisphere defense.
Surely the problems involved are not so great as to justify any loss in the confidence and good faith that we have gained in these governments through the years.[Page 165]
I am sending a copy of this letter, with its enclosure, to Mr. Irwin, and I trust that if we in the Navy can be of any further assistance in getting this program underway, you will let us know. I understand that RAdm Rittenhouse of my staff and BGen Hartel of OSD/ISA met with Mr. Snow on September 2nd5 and discussed possible solutions.6
- Source: Department of State, Central Files, 720.5–MSP/7–1259. Confidential.↩
- For text of this law, approved August 29, 1957, see 71 Stat. 495.↩
- Not printed.↩
- Apparent reference to the agreement for the establishment of a guided missile facility on the Island of Fernando de Noronha, effected by an exchange of notes at Rio de Janeiro, January 21, 1957, and entered into force on the same date; for text, see 8 UST, p. 87.↩
- No record of this meeting has been found in Department of State files.↩
- In a September 22 letter to Admiral Burke, Acting Secretary Dillon replied as follows: “I very much appreciate having the views set forth in your letter of September 12, 1959 regarding the proposed ship loan program for Latin America. You may be sure that they will be considered fully by the Department of State during its review of the revised FY 1960 grant military assistance program recommended by the Defense Department.” (Department of State, Central Files, 720.5–MSP/9–1259)↩