28. Telegram From the Department of State to the Embassy in the United Kingdom1

4410. Department increasingly concerned seemingly indiscriminate offer naval vessels by UK to LA countries in disregard economic drain and danger armaments race, increasing tensions. We refer immediately to Peru-Chile situation, also affecting Ecuador, Argentina, etc. Therefore request you approach Foreign Office along following lines:

We have recent reports following UK sales or offers: (a) cruiser Newfoundland sold to Peru and cruiser Ceylon reportedly sold (Peruvian Embassy informed us December 1 of latter purchase, one week after conveying GOP’s categorical assurance there would be no purchase second cruiser, although now reported may have been secretly purchased same time as first); (b) battleship Vanguard, 3 Jamaica class cruisers and 6 Battle class destroyers offered to Chile; (c) Peruvian report cruiser Ceylon offered to Ecuador and possibly Chile which GOP gives as excuse Peruvian purchase; (d) three Battle class destroyers offered to Argentina.
Dept appreciates sale British naval vessels matter between two countries involved and understands problems concerning UK relations LA countries. However, believe incumbent US and UK encourage restraint on excessive military expenditures LA countries whose Governments have severe problems exercising fiscal responsibility and whose military often have considerable fiscal autonomy.
LA economies can ill afford excessive military expenditures which place strain on Governments’ finances and retard economic development.
US providing credit and technical assistance for economic development, budgetary support, exchange relief, etc., which difficult justify in face of military expenditures in excess needs hemispheric and national defense. British will appreciate that LA failure concentrate resources on civilian economy increases demands for US assistance and aggravates US balance of payments problem to which UK has already responded.
LA Communists and nationalist extremists incite demands for more arms in order weaken economies and frustrate our endeavors.
Excessive military expenditures often place responsible civilian officials in delicate position. Our Embassy reports Peru Prime Minister Beltran (British educated, friend of US–UK, who attempting develop sound economic-financial-social program) so discouraged over inability stop cruiser purchase that now thinking of resigning.
Sales naval vessels give impetus disastrous arms race, increase tensions between LA countries. Pressures already growing in Chile to match first Peruvian cruiser, can be expected become irresistible when second generally known. Chile-Peru relations may reach low point. Ecuador uneasy.
U.S. has been attempting stimulate LA initiative for arms limitation. We were encouraged by recent public statement Chilean President Alessandri favoring limitation, publicly endorsed by Peruvian President Prado; US applauded in statement November 30. Peruvian second cruiser purchase represents serious set-back this effort.
We oppose excessive military purchases regardless of country of purchase, including US (e.g. our refusal make excessive aircraft sales Peruvian Air Force).
If British raise question US military assistance (including prospective ship loan) LA countries, you should explain not inconsistent since purpose this modest program is to relieve part of economic-financial burden LA countries maintain minimum forces necessary for hemispheric defense.

Embassy should make following specific requests UK Govt soonest:

Present status second cruiser sale to Peru.
If not too late and if can be done gracefully express hope UK can avoid completion this sale. (Our Ambassador Lima making top level attempts dissuade GOP from purchase, with little expectations success.)
In any case strongly urge UK consider future confidential coordination with US before undertaking offer or sale major armaments LA in order provide opportunity compare notes economic and military situation prospective purchaser and determine advisability discourage purchase. Report UK reactions.

  1. Source: Department of State, Central Files, 720.5621/12–459. Confidential. Drafted by Richard A. Poole and James D. Moffat, and approved by Joseph A. Silberstein. Repeated to Lima, Santiago, Quito, Bogotá, Buenos Aires, Rio de Janeiro, and Caracas.