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

PE–6. Memorandum of Conversation, by the Ambassador in Peru (Achilles)¹

Lima, May 7, 1958

SUBJECT

• Political and Economic Situation

PARTICIPANTS

• Manuel Prado, President of Peru
• Raúl Porras Barrenechea, Foreign Minister (last part only)
• Richard M. Nixon, Vice President of the U. S.
• Roy R. Rubottom, Asst. Secretary of State for Latin American Affairs
• Theodore C. Achilles, Ambassador to Peru

The Vice President presented President Eisenhower’s letter² and, after an exchange of pleasantries, opened substantive conversation by asking whether the President considered the Communist problem bad in Argentina. The President replied that the combination of Peronism and Communism was indeed bad. Communism was also a serious problem here. In Cuzco a local Soviet had recently emerged and taken over the city for two days until additional troops could be sent. In Puno Communists crossed the border freely from Bolivia. If Peru’s economic problems were not solved, there would be an increasingly serious Communist threat in Southern Peru.

President Prado and the Vice President agreed that the economic problems of Peru and the U.S. were similar and due to the worldwide fall in prices rather than to policies in either country. President Prado stated that mining represented a major part of Peru’s economy whereas it represented only a small factor in the U.S. economy. The Vice President mentioned our awareness not only of the importance of the mining problem to Peru but also agricultural problems and stated that our surplus disposal program was conducted with every effort to avoid disturbing the economies of friendly countries.

The Vice President inquired how it was that Peru had been able to develop such sound economic and political policies in contrast with some other South American countries. The President replied that the Peruvian people saw the advantages of such policies, as did the Government, and he would see that they were fully maintained. The Vice President cited Peru as a model of a policy of free enterprise, free exchange and a completely free economy. The President said that Peru was currently encountering financial difficulties but was proud that it had not had to dip into the $60 million Stabilization Fund, although there was great pressure to do so, particularly for public works and housing. The Vice President commented that the U.S. had similar problems.

At this point the Foreign Minister entered and the conversation returned to Communism. It was pointed out that although Communism was illegal in Peru under the Constitution, there was no legislation permitting the Government to take action even against the ringleaders in such flagrant situations as the temporary occupation of Cuzco. He had presented legislation to the last session but Congress had refused to pass it on the grounds that it was undemocratic and could be used against persons other than Communists. Peru had not only complete political freedom but also almost excessive freedom of the press. The Foreign Minister mentioned that Communism in Cuzco was not limited to trade unions but included politicians and students. Twenty of the latter had recently returned from a visit behind the Iron Curtain.

President Prado mentioned his long-standing antipathy to Communism and his efforts in 1942 to persuade President Roosevelt that Communism would be a major threat after the war. Neither Roosevelt nor Mrs. Roosevelt had agreed. In response to the Vice President’s request, he agreed that the latter might refer in his press conference tomorrow to President Prado’s long-standing antipathy to Communism and that he continued to hold the same views.

In concluding the conversation, the President stated that Peru shared U.S. principles on both economic and political matters and that Peru could always be depended upon as a friend of the U.S. in the UN and elsewhere. He mentioned his initiative for coordination between the OAS and NATO in dealing with the world Communist threat. The Vice President expressed appreciation for Peru’s cooperation.

1. Source: Department of State, Central Files, 033.1100-NI/5–1358. Confidential. The source text, sent to the Department of State under cover of despatch 848 from Lima, May 13, bears the notation that it was approved in draft by Assistant Secretary Rubottom.
2. See Document PE–5.