257. Telegram From the Embassy in Brazil to the Department of State1

272. Department circular telegrams 145 and 1043.2 Following approved by Ambassador before his departure.

Increases proposed in IMSP [MSP?] military and non-military programs for Brazil FY 1960 are appropriate to US objectives. My evaluation of military program was transmitted Embassy despatch 14233 since which additional aid offered Brazil. Technical cooperation 1960 program, although nearly double 1958, seems appropriate considering Brazil desires, capabilities and achievement of US objectives.

However, MSP programs exert less immediate and less identifiable influence on attainment US objectives than non-[M]SP programs, particularly EXIM Bank loans which more urgently and directly related to Brazilian economic situation. Recently $100 million BOP loan (together with $58 private commercial)4 has called forth reiteration Brazil [Page 704] commitments to combat inflation, set priorities for development work toward reform of exchange system, and improve control coffee marketing. Our participation in international forums such as coffee study group and GATT also important. PL–480 purchases and loans helpful to Brazil economy. US recently expressed willingness study means of combatting under development cooperatively other LA countries also useful,5 as was Secretary’s recent visit and joint-Brazil-US communiqués. Role of USIS is also extremely important in this style context.

Objectives of US in Brazil continue to be those enunciated previously and include following. 1. Effective collaboration by Brazil with US in support common objective world peace and security, notably in UN, OAS, and other international organizations.

Cooperation by Brazil with US in peaceful solution hemisphere problems and constant development and strengthening inter-American relations.
Continued awareness Brazil interests best served by close political, military, economic, scientific and cultural cooperation with US.
Recogntion Communist threat under its many disguises and if use of ultra-nationalism, anti-Americanism and neutralism to attain its objectives.
Development increased political stability based on democratic foundation.
Sound economic development providing maximum freedom movement of goods, services and capital and maximum free enterprise.

Extent to which US efforts help achieve foregoing objectives obviously depends upon coordinating and maximum effectiveness all US programs. With DCM6 assistance I give daily attention to coordination all US elements in Brazil. Economic and technical programs are coordinated by director USOM who is also my principal economic officer.7 Military programs are coordinated with chief US element JBUSM8 or with direct liaison Embassy political section. USIS director9 works closely with all US elements. While there is no mechanism for [Page 705] coordination of US and non-US programs appropriate account is taken of known non-US programs (such as UN technical assistance) in US programming.

Technical cooperation is directed at improvement of human element upon which both democratic institutions and economic development depend. The FY 1960 program, which I have reviewed, concentrates on high priority sectors where effective utilization of US aid seems most likely. Brazil is more interested and better coordinated to use such aid than heretofore and recently made direct approach to Secretary Dulles re expansion thereof.10

  1. Source: Department of State, Central Files, 732.5–MSP/8–1858. Confidential.
  2. Circular telegram 145, August 11, not printed. (ibid., 700.5–MSP/8–1158) Circular telegram 1043, May 5, requested an analysis of aid programs for fiscal year 1960. (ibid., 120.171/5–558)
  3. Not printed. (ibid., 732.5–MSP/6–1058)
  4. The Export-Import Bank of Washington authorized $100 million credit to Banco do Brasil and the Government of Brazil on August 7 to refinance purchase of equipment in the United States. For further information, see Export-Import Bank of Washington, Report to the Congress for the Twelve Months Ending June 30, 1960 (Washington, 1960), p. 84. In telegram 209 to Rio de Janeiro, August 8, the Department reported the details of the negotiation of the Export-Import Bank and commercial bank loans. (Department of State, Central Files, 103-XMB/8–858)
  5. Reference presumably is to the statement made by Dillon before the Inter-American Economic and Social Council in Washington, August 12, announcing U.S. readiness to consider establishment of an inter-American regional development institution. For text, see Department of State Bulletin, September 1, 1958, p. 347.
  6. Deputy Chief of Mission Woodruff Wallner.
  7. Howard R. Cottam, Counselor for Economic Affairs, Embassy in Brazil, and Director, United States Operations Mission in Brazil.
  8. Major General William J. Verbeck, USA, Chairman, U.S. Delegation, Joint Brazil-United States Military Commission.
  9. John P. McKnight, Counselor for Public Affairs, Embassy at Rio de Janeiro, directed the U.S. Information Service in Brazil.
  10. Reference presumably is to the program presented to Dulles by Lopes at Rio de Janeiro, August 5; see Document 253.