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

PE–4. Memorandum of Conversation, by Sandy M. Pringle of the Office of South American Affairs¹

Washington, April 14, 1958

SUBJECT

• Naval Vessels for Peru

PARTICIPANTS

• Ambassador Berckemeyer, Embassy of Peru
• Miguel Grau – Minister Counselor, Embassy of Peru
• ARA – Mr. Rubottom
• OSA – Mr. Pringle

Ambassador Berckemeyer said that he had been instructed by the Foreign Minister to take up the matter of naval vessels for Peru and to obtain the Department’s comments on certain specific questions. While the Ambassador did not so phrase them, they can best be stated as follows:

Why are two submarines and two destroyers being earmarked for Chile under the pending naval ship loan bill when Peru is only to receive two destroyers? Why is the U.S. spending $10 million for maintenance work on Chile’s two cruisers in U.S. shipyards when it refuses to sell Peru a cruiser? Does the Department have any comments on rumors that Chile is obtaining an aircraft carrier in the U.S. or elsewhere? Was the UK’s withdrawal of its offer to sell Peru two destroyers the result of pressure from the U.S.?²

In reply, Mr. Rubottom said that he would first like to make a few very general remarks about U.S. military assistance. He explained that the furnishing of assistance to Latin America is based on military considerations and that the favoring of one nation over another is not involved in any way. He said that assistance is based on an estimate of the military threat to the hemisphere, the requirements for equipment to meet that threat, the availability of equipment, and the capability of recipient countries to use it. He said that the U.S. is attempting to develop the anti-submarine warfare capability of the Latin American countries and that, with this in mind, it extended Peru a $16,600,000 credit for the purchase of two modern submarines.³ He pointed out that this credit, the largest single military credit extended to any Latin American government, was arranged at the request of the Peruvian Government at a time when the U.S. was unable to agree to the loan or sale of any naval vessels from its Reserve Fleet. He also pointed out that the U.S., at the request of the Peruvian Government, recently agreed to the postponement of payments on the principal of this loan for three years in order to ease Peru’s balance of payments problems.⁴

Mr. Rubottom said that, for the purpose of developing Latin American anti-submarine warfare capability, two destroyers are earmarked for Peru under the pending naval ship loan bill. Under the same program, Chile is scheduled to receive two destroyers and two submarines, so that it can improve its ability to defend its long sea lines of communications. Mr. Rubottom pointed out that this information had long been known to Peru and had been the subject of discussions between Prime Minister Cisneros and Ambassador Achilles a year ago.

With regard to the maintenance work being done on the two Chilean cruisers in U.S. shipyards under the Mutual Security Program, Mr. Rubottom said that it would cost not $10 million but approximately $4 million. He also pointed out that we similarly assist Peru in the maintenance of units of its Navy—for example, the three destroyer escorts it obtained from the U.S. in 1951. He said that the Chilean cruisers had been brought to the U.S. because the maintenance could best be done here, whereas the maintenance of Peruvian vessels could be done in Peruvian shipyards with spare parts furnished by the U.S. He said that it would seem to be advantageous to Peru to have maintenance work on its vessels done in Peru rather than in the U.S., thus providing additional work for its shipyards.

Referring to the rumors that Chile might be obtaining an aircraft carrier, Mr. Rubottom said he could assure the Ambassador that Chile was not getting one from the U.S. and that, so far as he knew, was not obtaining one elsewhere either. As for the cancellation of arrangements for Peru to purchase destroyers from the UK, Mr. Rubottom said that the Peruvians themselves had informed the U.S. that they had decided not to buy the vessels. He pointed out that Admiral Llosa had given Admiral Peterson this information on August 5, 1957, and Ambassador Berckemeyer acknowledged that this was correct. Mr. Rubottom said that, if the Peruvians had agreed to buy the destroyers from the UK, he felt sure that the latter would have sold them, whether the U.S. felt it to be desirable or not.

The present status of the naval ship loan bill was then mentioned. Mr. Rubottom said that it had been introduced in the Senate and that committee hearings might be held soon. He said that the bill had the strong support of both the Defense and the State Departments and that we hoped it would pass.⁵

After leaving Mr. Rubottom’s office, Ambassador Berckemeyer told Mr. Pringle that the conversation had been very useful. He said he suspected that the military members of the Cabinet had been putting pressure on the new Foreign Minister, Raúl Porras, and hoped that the report of the conversation with Mr. Rubottom would give the Foreign Minister a better perspective on the problem. The Ambassador said that he himself was thoroughly familiar with the background of the matter but that Foreign Minister Porras undoubtedly was not.

1. Source: Department of State, Central Files, 723.5621/4–1458. Confidential. Drafted April 16.
2. For documentation on the referenced question, see Foreign Relations, 1955–1957, vol. VI, American Republics: Multilateral; Mexico; Caribbean.
3. For documentation on the loan to Peru for purchase of two submarines, see ibid. The military assistance loan agreement of August 1, 1955, with Peru amounted to $515,663,744.
4. The agreement under reference was concluded by a note of January 9 from Finance Minister Thorndike to Ambassador Achilles in Peru. A copy of that note was transmitted to the Department of State under cover of despatch 508 from Lima, January 15. (103.XMS/1–1558)
5. In Public Law 85–532, approved July 18, 1958, Congress authorized the President to lend eighteen ships to countries in Latin America; for text, see 72 State 376.