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

PE–33. Telegram from the Secretary of State to the Embassy in Peru¹

Washington, December 8, 1959, 7:17 p.m.

415. Embtels 501, 510.²

FYI In response to Defense Dept request for apportionment for ship loan program and prior to report of second cruiser purchase, Bureau of Budget informed Defense it deferring funds for rehabilitation destroyer for Peru pending re-evaluation need for destroyer in light of Peruvian cruiser purchase (i.e. first cruiser). Navy Dept alluded to this position of Budget Bureau in discussing with Admiral Llosa adverse effect here second cruiser purchase especially following various Peruvian assurances. In any case Budget message³ is internal administrative step and no final USG decision has been made re Peru destroyer loan. We are however, going ahead with processing loan and rehabilitation two MSFs. End FYJ

Ambassador Berckemeyer telephoned yesterday stating that, based on information re Budget Bureau position as relayed by Llosa to Peruvian Navy, he had received instructions from Foreign Minister to make representations highest level concerning this “reprisal”, including prospective GOF difficulty “maintain relations” U.S. Naval Mission. Dept informed him no USG decision yet on destroyer although of course second cruiser purchase had adverse impact here and being analyzed as new factor in terms existing programs. Berckemeyer replied that since no USG decision yet he did not see need make representations. Peruvian Counselor⁴ said his Embassy hopes soften possible intemperate attitude Navy Minister (based on erroneous belief Budget position represents final USG decision) which could have unfortunate consequences December 9 Cabinet Meeting.

Chile not acquiring two new destroyers from U.S.; Tirado information probably refers to two destroyers ordered from UK.

Above for use your discretion.⁵

1. Source: Department of State, Central Files, 723.5621/12–559. Confidential; Niact. Drafted by Poole and Coerr and signed by Mallor V.
2. Neither printed. In telegram 501 from Lima, December 8, the Embassy reported that Peruvian Naval Minister Tirado told Deputy Chief of Mission Neal on December 4 that if reports from Washington of U.S. reprisals against Peru for purchase of second cruiser were confirmed, he would demand that the U.S. naval mission in Peru be closed down. (723.5621/12–559) In telegram 510 from Lima, December 7, the Embassy in Peru asked what representations the United States had made against the purchase of ships by other Latin American countries. (723.5621/12–759)
3. The referenced message was not further identified.
4. Miguel Grau.
5. In telegram 522 from Lima, December 9, Ambassador Achilles reported that he told Minister Tirado on the same day that no decision had been reached on the Peruvian ship loan program, that it was being reexamined in the light of Peruvian cruiser purchases, but that “any hasty action or threats such as he made to Deputy Chief of Mission Neal would certainly not help.” (723.5621/12–959)