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

VE–25. Memorandum of a Conversation, Caracas, Venezuela, March 31, 1959¹

Caracas, March 31, 1959

PARTICIPANTS

• President Rómulo Betancourt
• Minister of Mines Juan Pablo Pérez Alfonso
• Mr. Thomas C. Mann, Asst. Secretary of State for Economic Affairs
• Ambassador Edward J. Sparks
• Minister-Counselor Charles R. Burrows
• Economic Counselor Harlan P. Bramble

The conversation took place at a luncheon at Miraflores which President Betancourt offered for Mr. Mann.²

Mr. Mann spoke to the President of the reports which have reached Washington concerning the auspicious beginning of the President’s term of office. President Betancourt expressed his appreciation to Mr. Mann for these thoughts, indicating his obvious satisfaction and belief that his five-year term will be a constructive one. The President spoke of the problems which Venezuela faces and of the demanding work which is required of him. He gave particular emphasis here to the problem of unemployment and said that the total number of unemployed in the country is some 250,000. He spoke of his plans to attack the unemployment problem and to improve the basic economic position of the country. Mr. Mann spoke of the importance of small industry to a country like Venezuela and the President agreed, saying that this was an integral part of his plans. President Betancourt, expanding on this idea of small industry, gave particular attention to the resuscitation in Venezuela of handicraft industries and spoke of the desirability of decentralizing industries of this or any other and throughout the country and away from Caracas, The President spoke also of his plans for agrarian reform, irrigation, and low-cost housing. He referred again as he had in an earlier conversation (on March 10) to the Government’s program directed toward facilitating and encouraging the return of many of the ranchito dwellers in the various centers of population to agricultural areas. The President spoke of the necessity for local financing, particularly in the field of housing, and of his desire to broaden the base of this financing by instituting a system of popular investment in government housing bonds. In terms of a basic source for such investments, the President spoke particularly of the higher paid workers of the country, specifically in the oil industry but also in certain other fields, and of the necessity of encouraging these workers to save their money and to make it available through investments of this kind for the development of the country. He said he is thinking seriously of a plan under which up to 50% of year-end utilidades in the petroleum and other industries would be invested by the workers in Government bond issues for low-cost housing.

The President throughout the conversation demonstrated full confidence and conviction that he would be able to carry through his program with complete success. He recognized the activities of the Communists but expressed his opinion that by 1964, the next election, the Communists will be able to account for no more than 60,000 votes. The President, and Minister Pérez Alfonso (who arrived some five minutes late) spoke with obvious preoccupation of the various labor disputes and strikes with which they have had to deal in the last two or three weeks. The President said that it has taken a great deal of his time since he has had to deal personally with all of them. He spoke particularly of the illegal LAV pilots’ strike and the hunger strike of the imprisoned military officers. Pérez Alfonso mentioned and then the President discussed a bit further the Orinoco Mining Comp any strike. The reaction of the President and Pérez Alfonso seemed to be that the company has been inclined to be overly legalistic in its dealings with the workers. There was no protracted discussion of this subject however, except that the President’s preoccupation was obvious, as was his apparent determination to endeavor to contribute to a solution of the strike.

The President made a very quick reference to the news from the United States concerning the decision of the Immigration and Naturalization Service respecting the continued stay in the United States of Pérez Jiménez; in this connection he referred smilingly to LA ESFERA’s editorial of this morning (this editorial suggested that now was the time for the Venezuelan Foreign Office to press, as it should have done before this, for the extradition of Pérez Jiménez). There was no further discussion of this.

The President then turned to Mr. Mann to ask him what “good news” he brought from Washington. Mr. Mann described his detailed conversation that morning with the Minister of Mines³ and said that he felt there had been a thorough discussion of the petroleum situation. Mr. Mann emphasized to President Betancourt his belief that it is extremely important for the President and the Minister to have immediate conversations with representatives of the petroleum industry in order to dissipate what Mr. Mann fears is a growing misunderstanding and fear on the part of the industry of the Government‘s plans. President Betancourt seemed obviously taken aback at the suggestion of industry fears and agreed that such conversations would be undertaken forth-with. Mr. Mann suggested perhaps such conversations might begin with a person like Mr. Proudfit of Creole, in whom he believed the President and the Minister had full confidence, and who Mr. Mann considers to be a fair representative of the industry as a whole. In agreement with the President’s expressed position on this, Pérez Alfonso said that he would begin tomorrow conversations with Mr. Proudfit which would later be expanded to include the entire industry. With reference to U.S. restrictions on petroleum imports, the President suggested that the petroleum companies seem to have followed the position of the Communists more than they have that of the United States or Venezuelan Governments. He said that the U.S. Government feels that restrictions are necessary and that the Venezuelan Government has not protested this decision. On the other hand the Communists have protested as have also the petroleum companies.

At this point the President made reference to nationalistic pressures in Venezuela and suggested that the Government would be organizing soon a national governmental petroleum company. Mr. Mann expressed the hope that this operation would not be a cause of further misunderstanding on the part of the industry in Venezuela and that the company would not engage in competitive activities. The President said that was not all his idea and explained that at a time like this when nationalistic pressures have to be answered, it is better for the government to take a small step to deflect the pressure rather than to hesitate and be forced into a much bigger step later on. He said that one of the main purposes of the company would be to provide opportunity for the training of Venezuelan technicians, who Pérez Alfonso said are in extremely short supply. The Minister said for example that it is very difficult for his Ministry to find qualified people to fill necessary positions.

Ambassador Sparks opened the subject of recent developments in the Caribbean and the President’s reaction to them. Mr. Mann described how the initial favorable and enthusiastic public reaction in the United States toward the successful outcome of the Cuban revolution is now being tempered by second thoughts as developments in Cuba and continuing unfriendly and extreme statements by Castro are being observed. Pérez Alfonso expressed his understanding of the immediate reaction in Cuba to the sudden release from the Batista dictatorship but he showed concern at the continuing lack of discipline there and the failure to return to normalcy. President Betancourt made clear that he retains his basic sympathy for the new Government in Cuba, although being disturbed by present developments, and that he intends to do everything he can to advise Castro and to help in bringing some reason back into the situation. Betancourt said that Castro is a very young man, that he has a great deal to learn, and that he is very naive. The President spoke of Castro’s attempt to obtain from Venezuela, when he spoke to Betancourt here in January, a loan of $300,000,000. He said also that Castro had suggested that Venezuela might sell petroleum to Cuba at a reduced price, in answer to which Betancourt said that he had suggested to Castro that presumably. Cuba would likewise be prepared to sell its sugar to Venezuela at a discount. The President said that a Cuban commercial mission is expected to arrive soon in Caracas and he indicated his intention to receive it sympathetically although he expects the mission will have far too much optimism in regard to Venezuela’s capabilities in this field. Betancourt’s attitude was more one of sadness and sympathy than anything else. In answer to Ambassador Sparks’ reference to the experience of Figueres in Habana, President Betancourt said he believed that any monetary misunderstanding with Castro had been cleared up before Figueres left. In connection with Betancourt’s references to Figueres, he took the opportunity to recall (as he has done previously) the fact that Figueres did not receive an invitation for a State Visit to the United States while he was President of Costa Rica.

With regard to the Dominican situation, President Betancourt described Venezuela’s attitude as one of forbearance and resistance to a break in relations. This has been true despite continued needling by Trujillo, such as declaring the Venezuelan Charge “persona non grata,” unbridled newspaper and radio attacks on Venezuela and on Betancourt, the departure from Caracas and return to Ciudad Trujillo of the Dominican Ambassador and so on. Betancourt does not plan to break relations nor to take any other direct action but he definitely expects to introduce at the Quito Conference in 1960⁴ a resolution under which membership in the OAS would be made dependent upon the presence in each country of a democratically elected government - perhaps even with the election having been supervised by the OAS. There followed some general discussion as to the United States’ position concerning intervention and Betancourt expounded his ideas on multilateral vs. unilateral action. He feels that if the United States were to take part in a multilateral action or position with reference to dictatorships, this would be generally accepted and applauded by the great majority of Latin American nations. The only ones which would criticize would be those very few countries which do not now enjoy democratic regimes. Mr. Mann indirectly questioned this by a reference to the long-standing position of Mexico, for example, on the subject of intervention, but President Betancourt expressed the belief that Mexico would go along with a multilateral approach. President Betancourt said that as far as he himself is concerned he definitely plans to have an OAS team present in Venezuela for the 1964 election. He said that the one real imminent danger for Trujillo is that the barbados from Cuba will take things into their own hands and mount an invasion of the Dominican Republic.

President Betancourt then entered into a discussion of the great desirability of doing everything possible to strengthen the OAS, particularly by decentralization of some of its functions outside of Washington. He mentioned the Inter-American Juridical Council in Rio de Janeiro as being the only OAS Agency not located in Washington and then repeated the Venezuelan arguments for the establishment of the new Inter-American Bank in Caracas. Mr. Mann reviewed the entire background of this question from the U.S. point of view and described the basis on which the U.S. position has been adopted favoring the location of the Bank in Washington or New York. President Betancourt was obviously not impressed by these arguments and Mr. Mann asked him if this were a highly important issue to him. The President responded by saying that it is a highly important question to the future welfare of the OAS more than it is of importance to him personally or to Venezuela. Mr. Mann said that he would discuss the matter again in Washington, presenting the President’s points of views, although he said he feared that he could offer little hope of success.

Ambassador Sparks raised the question of Pan American Airways’ problem of jet flights to and through Venezuela and the company’s hope that the air base at Palo Negro might be used for its Asunción run until the runway at Maiquetia may be lengthened. The Ambassador explained that a total of some 12 or 13 landings (one a week southbound) is probably all that would be necessary since the strip at Maiquetia should be finished within the next three or four months, Betancourt was fully briefed on this matter and as we were leaving his office he read an order to the effect that the work on the runway at Maiquetia be undertaken and completed as quickly as possible.

In reply to Ambassador Sparks’ question concerning the recently expressed position of the AD youth concerning Figueres, Mufioz-Marin, Romauldi, and so on, the President said this small wing of the party is completely a dissident one, of very small consequence, and that its members will be expelled from the party. He said that his invitation to Mufioz-Marin to visit Venezuela still stands, and he expects there will be no trouble when he comes, but the President also made clear that there is at the moment no definite date for the visit. The inference was that the President would await developments before issuing a definite invitation.

The President in an aside to Ambassador Sparks at the luncheon table referred to the previous conversation on March 10 and recalled to the Ambassador how he had said Venezuela would establish its Legation in Tel Aviv rather than Jerusalem which had been done.

1. Source: Department of State, Central Files, 731.11/4–359. Confidential. Drafted by Burrows, and sent to the Department of State under cover of despatch 867 from Caracas, April 3, 1959.
2. Mann arrived in Caracas the evening of March 30, 1959, for consultations regarding the U.S. oil imports system.
3. A memorandum of their conversations dated March 31, 1959, is contained in ARA Files, Lot 61 D 319, “Oil Imports Program.”
4. Reference is to the Eleventh Inter-American Conference which was scheduled to meet in Quito in February 1960, but which was delayed at the request of the Ecuadorean government until early 1961 and then postponed indefinitely.