464. Memorandum From Edward E. Rice of the Policy Planning Staff to the Assistant Secretary of State for Policy Planning (Smith)1

SUBJECT

  • Cuba

I suggest, if there arises another case of alleged hostile intrusion into the Cuban airspace similar to that which recently occurred, that we offer Cuba the free loan of some World War II type planes (e. g., P–51). The offer, even if refused, would have good impact in Cuba.

It would be good policy to discourage US investment in plantations in countries which have not had their social revolutions. We should be backing land reform for such countries, as we did with long-term political success in Japan. We should cooperate with any non-Communist group which is in power and is willing to put it into effect. A social revolution successfully carried out under non-Communist auspices, as in Mexico, is like an inoculation against Communism. This is a sound principle which we should back in preference to any short-run interests.

My policy for Cuba would be as follows:

(1)
Declare that the US Government regards with sympathy the wish of patriotic Cubans to be masters in their own house and efforts designed to reduce wide disparities of income there.
(2)
Declare that we must and will do what we can, within the limits of our policy of non-intervention, to protect legitimate American economic interests in Cuba. At the same time take a fairly relaxed attitude as to what can be accomplished until Cuba’s revolutionary fever has burned down.
(3)
Try to determine for ourselves which US investments: (a) have been exploitative and have drained off high profits while paying low wages; (b) stand in the way of Cuban land reform; or (c) have followed enlightened policies and can make a continuing contribution to the Cuban economy. And then give differentiated treatment, in representations to the Cubans, to these differing categories and corporations.

With policies of this sort, we would be in a position to approach the Mexicans, who have had their social revolution, and suggest they offer the Cubans the advantage of their experience. Mexicans in Havana would be better than Soviet advisors and more acceptable than Americans.

Implicit in what I suggest above is the need to determine the facts about the returns which have been enjoyed on US investments in Cuba. If we find that returns have often been very high, it will be good ammo for the policy of not bleeding too hard for the US corporations. High returns on foreign investments justified by high risks are incompatible with a high degree of US Government protective action. It seems to me that this is especially true of corporations in the sugar field which have enjoyed high profits at the expense of the US consumer under our quota policy. If our findings are significant, we will want to discuss them with appropriate Congressional leaders—whose understanding we have got to win if we are to implement any good long-run policy for Cuba.

  1. Source: Department of State, S/P Files: Lot 67 D 548, Cuba 1959–1961. Confidential. Drafted and initialed by Rice. Copies were sent to Morgan and Ramsey.