545. Memorandum of Discussion at the 450th Meeting of the National Security Council, Washington, July 7, 19601

[Here follows discussion of matters unrelated to Cuba.]

Turning next to the situation in Cuba, Mr. Dulles dealt first with the seizure by Cuba of the oil refineries.2 He said that this seizure could, in the short-term, result in an oil shortage, but that if the Soviets go all out, as they probably will, they can fill Cuba’s petroleum needs. Mr. Dulles mentioned the problem of denying tankers to Cuba for the transport of Russian oil, stating that while he had been abroad he had attempted, with some success, to persuade Onassis not to provide [Page 981] tankers. Secretary Anderson inquired whether Niarchos had not leased some tankers for this purpose. In response, Mr. Dulles indicated that Niarchos had a contract, effective in August, to take oil to Europe from the USSR. Niarchos had promised to try to drag his feet on this contract; he realized fully its implications. Secretary Anderson indicated that some of the commercial banks from whom Niarchos had borrowed money were objecting to his contractual arrangements. Mr. Dulles responded by indicating that any pressure the banks could bring to bear on Niarchos would be useful. Mr. McCone suggested that there was very little the U.S. could do with respect to such contracts because of the considerable liabilities that the tanker-owners incurred if they violated their contracts. Mr. Dulles noted that if the Russians picked up some of the oil that these tanker-owners had contracted to carry, their losses would be reduced.

Mr. Dulles stated that Cuba needs 60,000 barrels of oil per day or 1600 thousand barrels per month. He stated that [less than 1 line not declassified] 8000 barrels were presently on their way to Cuba from the USSR; 700,000 had been shipped by the USSR up to the first of July. He again indicated his belief that, if the Soviets moved vigorously, a shortage could be avoided. However, maintaining the refineries and obtaining spare parts for them would be an important long-range problem for Cuba. Cuba’s reaction to the application of the Sugar Law had been quick, but not so violent as had been expected. Castro did not indicate immediately what sanctions he would apply.3 A labor rally had been called and Castro was scheduled to address a mass protest rally on Sunday.4 Violent action against U.S. property or personnel might occur.

Mr. Dulles indicated that Foreign Minister Rojas [Roa] was to be replaced by a pro-Communist undersecretary in the foreign ministry and that the Chief of the Cuban Army is to be replaced by a Communist who had recently returned from a visit to the Bloc. He mentioned the defections of the Cuban Ambassador to London and the defections of other ambassadors. There were unconfirmed reports, he said, that Raul Castro, who is now in Prague, had arranged to obtain small arms and jet aircraft. There is also an unconfirmed report that he is to visit Moscow. Raul Castro had said that U.S. stoppage of Cuban sugar purchases was not disastrous since Cuba had the support of the USSR and other Socialist countries.

[Page 982]

Mr. Dulles noted that the landing of the Cuban propaganda-laden plane in Ecuador had resulted in strong protests by Ecuador and also that Ecuador had recently expelled the local representative of La Prensa Latina, the pro-Communist Latin American press service. El Salvador, Costa Rica, and Honduras were considering breaking diplomatic relations with Cuba. In addition to the Dominican Republic, Guatemala and Nicaragua have already done so.

[Here follows discussion of matters unrelated to Cuba.]

Mr. Gray introduced Secretary Dillon who stated that he would review where we stood with respect to Cuba. The situation, he said, had three aspects: (a) the actions that we have taken and that we might take ourselves; (b) the actions that we have taken or might take with our allies; and (c) actions by Cuba.

The action taken by the President the day before on sugar5 was likely, Mr. Dillon suggested, to set off a train of events leading to a complete economic break with Cuba. If Castro carried out his threat to seize all or substantially all U.S. investments, the Department of State would be prepared to recommend further action, including invocation of the Trading-with-the-Enemy-Act, the freezing of Cuban assets in the U.S., and the cutting off of all economic transactions. This latter action would accentuate the spare parts problem previously mentioned by Mr. Dulles, and would also affect the availability of certain items needed to operate Cuban industrial plants; for example, chemicals for the Nicaro plant.

Castro’s reaction had been slower than expected. His speech the night before had been aimed primarily at the other Latin American countries where the contest between the U.S. and Cuba will now take place. His speech had been designed to buck up the Cuban case against the U.S.; he had accused the U.S. of being an aggressor because we did not like social reform; he had accused us of being imperialists and opposed to progress. He had also stated that if other Latin American countries obtain portions of the Cuban sugar quota, they could expect the U.S. to cut them off at a later date.

It was important, Mr. Dillon said, for the U.S. to make efforts to ensure that other Latin American countries understand the U.S. position. Most of the governments do understand our position, he indicated, but not the masses. USIA could, he suggested, plan [play?] an important role in this latter respect. It was also important to move ahead on the radio program for Cuba. He said that the U.S. was supposed to start broadcasts from the Swan Island installation very [Page 983] soon. It was important that our side be carried to the Cuban people and that we differentiate our attitude toward the people from our attitude toward the regime.

[Here follows discussion of matters unrelated to Cuba.]

Mr. Dillon indicated that he had recently briefed the National Advisory Committee on Inter-American Affairs6 and that the Committee completely supported the recent U.S. actions. The Committee felt that the situation in Latin America had shifted in the last three weeks to a month from one in which most Latin American Governments believed that the U.S. attitude of patience was the right attitude to one of feeling that the U.S. was letting Castro push us around too much. Therefore, the Committee believed that we should make a demonstration of our strength.

Turning to further actions that were required, Secretary Dillon indicated that he believed it would be useful to reduce to a minimum the number of U.S. citizens in Cuba. If Cuba took over all U.S. businesses, there was not much reason for U.S. citizens to remain there. In this connection, there was one question on which he would like NSC advice. The evacuation of U.S. citizens involved the question of whether we should make a public statement or give other public indication that we have suggested that our citizens leave. Secretary Dillon felt that if Castro takes over American companies, the companies will probably tell their employees to leave. If we were to make a public statement, it might suggest that the U.S. contemplated immediate further actions. The probable reaction of the U.S. public to such an announcement was also not clear.

The President asked Secretary Dillon why the U.S. Government could not say that, since the Cuban Government had taken actions to eliminate their businesses, the U.S. Government thought it advisable for U.S. citizens to go home. Secretary Dillon agreed that this might be a good idea. Mr. McCone pointed out that other U.S. citizens just lived in Cuba—they were not there on business. Secretary Gates stated that approximately 4100 American residents remained in Cuba. The President suggested that perhaps many of those who were not in Cuba on business were staying there simply to avoid taxes. He indicated he was not too concerned as to whether they stayed on or not. Mr. Allen suggested that it might be better and more effective for the U.S. to take quiet action through the Embassy with no public statement. Such action, he believed, would get around immediately in Cuba and would have more effect on Castro than a public announcement. Secretary Dillon indicated that he was inclined to favor such an approach.

[Page 984]

Secretary Dillon then went on to say that the new sugar legislation provides that a portion of the Cuban quota shall be given to the Dominican Republic. The Cubans, he said, had not got hold of this point, but when they did, it would cause trouble. The President said that he had thought that it was not necessary under the law to take such action. While the law gave some the Cuban quota to the Dominican Republic, it also gave the President the right to take action in the U.S. national interest. Secretary Dillon agreed that it might be possible to avoid giving any of the Cuban quota to the Dominican Republic without a change in the law, but that, if the law must be changed, it could be done in the August session of Congress.

[Here follows discussion of matters unrelated to Cuba.]

Secretary Dillon then went on to discuss U.S. actions with other countries. He stated that the Central American countries would break with Cuba and that Panama might join in such an action. The President inquired as to when the U.S. should break relations. Secretary Dillon, referring to a U.S. break in relations with the Dominican Republic, stated that unless everyone breaks with the Dominican Republic, he would see some advantage in keeping someone there against the time when Trujillo is turned out. We did not, however, plan to send Ambassador Chapin to the Dominican Republic. Mr. Dulles stated that, if the Council was discussing a break with Cuba, he would like to emphasize the fact that he would like advance notice of such a break because it would affect certain of his relationships. The Vice President then inquired whether the Council was discussing a break with Cuba. Secretary Dillon indicated that this was the case. The President then suggested that the U.S. should break with Cuba and the Dominican Republic at the same time. The Vice President stated that nothing could cause more trouble within the U.S. than for the U.S. to break with Trujillo first rather than at the same time that it breaks with Castro. He then went on to say that he did not believe that Betancourt could be trusted. Betancourt would take his present line until he got his way with respect to Trujillo but he would not stay with us on Castro. The President interjected to suggest that Betancourt was, however, interested in selling Venezuelan oil. The Vice President stated that Betancourt was an opportunist and that his support within Venezuela is from the Left. He has, the Vice President indicated, the support of people who are pro-Castro. Of course, the Vice President acknowledged, many people who are pro-Castro are not communists. However, the Vice President believed, the U.S. should not, in order to get his support, go Betancourt’s way with Trujillo on the assumption that he would go with us on Castro. Mr. Dulles agreed that we had to [Page 985] watch Betancourt, and that, in particular, we did not trust his foreign minister and certain others in his government. However, Betancourt was all we had to work with.

The President interjected to say that Mr. Randall’s thoughts had suggested to him that one other effect of a movement in U.S. policy of the kind that had been proposed would be to encourage American capital to resume its flow into Latin America. Such a resumption would, in turn, have an effect on the attitudes of Latin American countries.

Secretary Dillon then resumed his presentation on relations with other countries, particularly those outside Latin America. He stated that the U.S. had brought the oil problem to the attention of other governments in an effort to ensure that other countries do not make available tankers to bring Soviet oil to Cuba. We had had some success with Niarchos and Onassis. They realized they would get no charters with American oil companies if they carry Soviet oil to Cuba. The response from the British had been at a relatively low level in the Foreign Office. This Foreign Office source had stated that he was certain that British oil companies would not make tankers available, but that the Foreign Office did not feel it necessary or wise to make representations to British shipping. We had hoped that the British would be more forthcoming. Secretary Dillon said that the response of the Danes had been rather negative and that we had not heard from other governments. He stated that on July 13 the U.S. planned to discuss Cuba in the NATO Council although, in general, we believe that action in the individual capitals is the better approach. Cuban funds, Secretary Dillon stated, had gone mostly to Canada. We may, therefore, want to get Canada to concert action with us if we freeze their funds in the U.S. The President indicated that we should consult with the Canadians in advance of any U.S. actions that we had under consideration and ask for their cooperation if action should prove necessary.

Secretary Anderson stated that we should make clear to our NATO allies that the basis of our concern in the Cuban situation is that the Russians are about to secure a base in the Hemisphere. Since this was the case, it was immaterial whether or not Castro is a card-carrying communist. He suggested that we should point out to our allies that we have given billions of dollars to them for mutual security and that it is important for NATO to align itself with us to prevent developments which would jeopardize the security arrangements of the Western Hemisphere.

Secretary Anderson then went on to discuss the authority under which the U.S. might act against Cuba. In the case of the Suez crisis, the government had acted under the Declaration of 1950. We do not, [Page 986] Secretary Anderson said, plan to act this year under the 1950 Declaration. Therefore, we face the possibility of a new declaration of a state of emergency in the Caribbean on the basis that the Soviets are in the area. If such action were taken, a whole series of further actions could follow; for example, imposition of import controls and seizure of the assets of the Cuban Government and individuals on the basis of the need to create a fund to recompense people who have lost their property in Cuba. The Secretary pointed out that the approximately one million tons of sugar exports to the U.S. which Cuba would lose this year represented 80 per cent of Cuba’s total exports for the balance of the year. If the U.S. declared a state of emergency, the government could say to American industry that it was not in the U.S. interest for industry to ship goods to Cuba. Industry, he felt, would cooperate. He thought that it was inconceivable that the Canadians would not cooperate with us in the matter of Cuban assets in Canada. Turning to the problem of shipping, Secretary Anderson stated that the government probably could not stop foreign-flag vessels from carrying Soviet oil, but if we declared an emergency, we could specify that no ship could be leased by an American company for, say, three to five years, if it had carried oil to Cuba. Secretary Anderson pointed out that there were only two cables out of Cuba and that one went to the U.S. and the other to Britain. If the U.S. invoked the Trading-with-the-Enemy Act, we could eliminate all communications by Cuba with the outside world except by radio.

We should, Secretary Anderson stated, decide whether we were justified in having the President declare a national emergency and then we should find a respectable and juridical basis for such a declaration. Once we block Cuban assets, Secretary Anderson indicated, every central bank around the world begins to worry a little bit. Mr. Southard, the U.S. Representative on the Monetary Fund, believes that this concern will cause an out-flow of gold from the U.S. However, Treasury analysts and the Chairman of the Federal Reserve Board did not agree. Secretary Anderson stated that he would be willing to take this risk. He concluded by saying that State, Commerce, Treasury, and others should decide very quickly what we should do. Although sugar was the most important item, cutting off Cuban exports of sugar would not in itself be crippling.

Secretary Dillon indicated that the government already had a program ready. The question to be decided, he said, was whether we should use the old Korean proclamation or a new one. Juridically, the old proclamation provided a stronger basis for action in the present case than in the case of Suez. Politically, however, it would be better to have a new declaration.

[Page 987]

Secretary Anderson asked whether, if Castro seizes American property and there is a possibility of mob action, the U.S. Government should sit and wait until someone got killed. He believed that this would be a weak-kneed approach. Regardless of who they hold responsible for events in Paris and Japan, the American people are beginning to wonder how much roughing up and how much abuse we can accept. This was not a good posture for the U.S. to be in. Secretary Dillon indicated that he concurred fully with Secretary Anderson’s statement. He said that, once we took the step that we have taken, we had entered the lists. We can only lose or win; it was important that we win.

Mr. McCone indicated his belief that if we had an understanding with our NATO allies, the possibility of a gold out-flow would be foreclosed. Turning to the problem of tankers, he suggested that if Niarchos and Onassis stated that they were not going to make tankers available, the independent tanker industry, which takes its cues from these two individuals, would go along with them. Mr. Dulles indicated that he had said much the same thing to Onassis but that Onassis does not think that the other Greek independents will pay attention to the action he takes. Mr. McCone stated that if Shell and British Petroleum would go along, that would take care of the independent British fleet and the Scandinavian fleet as well. The Scandinavian fleet was pretty well dependent on British business. Shell, he believed, was certain to take action because it was directly involved. Mr. Dillon, in clarification of his earlier remarks, pointed out that the British had made tankers available.

Mr. Hoegh suggested that if the communists had established a base in Cuba, economic warfare would not be enough. The U.S. should charge that the Monroe Doctrine had been violated and should go in and take over. In response to Mr. Hoegh’s comment, the President pointed out that the U.S. would have to prove a number of things before it could take such action. He noted that Mr. Bohlen does not believe that the Soviets will be so foolish as to make an overt military agreement or to establish a base in Cuba. Our policy, the President pointed out, was based on a coalition to stop communism, upon cooperation for our mutual security. As the government made moves, therefore, it had to have American public opinion and Free World public opinion behind it. If you did not, you would have to have an entirely different policy. Mr. Hoegh stated that public opinion in the U.S. would support the sort of action he had suggested. The President said that you could not depend upon expressions of public opinion. Thus, people had called the Japanese affair a debacle and had equated it with the loss of China. You had to lead public opinion on such matters.

[Page 988]

Secretary Gates asked whether it would not be desirable to call a meeting of the heads of state of the OAS at which the U.S. would recommend intervention in Cuba and get other Latin American countries to go with us. Secretary Dillon pointed out that the Dominican Republic problem would be taken up at the Friday OAS meeting and that the Latin Americans had said that they will take up Cuba when the Dominican problem has been disposed of. Mr. McCone inquired why an OAS foreign ministers’ meeting could not take place until sometime between the 25th and 27th of July because Kubitschek is visiting Frondizi.

Secretary Anderson suggested that if we did everything possible with respect to Cuba and then the British and the Germans came in with trade, shipping and so forth, we would look like idiots. If we could not ask for NATO cooperation in such a matter, we were in a very bad position. In response Secretary Dillon again noted that the matter would be discussed in the NATO Council. The President suggested that the trouble was that our allies equated every problem with every other problem. Cuba was equated with Suez and Algeria and our allies say that we did not help them on Suez or Algeria. Actually, however, we had done a lot to help De Gaulle and after Suez we had given credits to Britain and France.

[Here follows further discussion of the Dominican Republic]

Mr. Gray stated that he wished to be clear on what had been agreed. He felt that there had been agreement on the problem of evacuation of U.S. citizens from Cuba and agreement that, either by Presidential interpretation or by amendment of the statute, we would avoid giving the Dominican Republic any of Cuba’s sugar quota. He asked what action was required with respect to Canadian cooperation. Secretary Dillon suggested that the President might send some sort of communication to Diefenbaker. Secretary Gates pointed out that next week he, Secretary Herter, and Secretary Anderson would be meeting with the Canadians and that this problem might be taken up at that time. Secretary Dillon agreed that it could be handled in this way. The President suggested that perhaps a note from him to Prime Minister Macmillan was also required. Secretary Dillon reminded the President that he had mentioned this problem in his last communication to the Prime Minister.7

Mr. Gray inquired as to whether the Council wished to decide at this meeting whether we should rest on the Korean emergency proclamation or issue a new proclamation. The President said that the Attorney General should be brought in before a decision was made on the matter. Mr. Dillon pointed out that in addition to settling the legal [Page 989] question, we would have to prepare for the further actions under any such proclamation. The President observed that if the Cubans began to kill Americans, there was no question but that some such action would be required. The Vice President commented that the law can be a means to an end and that he believed it would better serve U.S. propaganda objectives to have a new declaration. He pointed out that it would be necessary to say certain new things and that this could better be done in a new declaration. Secretary Dillon agreed that a new declaration was the preferred course.

Mr. Gray inquired of Secretary Gates and General Twining as to whether contingency planning for Cuba was ready. Secretary Gates said that the plans were ready and that they covered such possible actions as a blockade, a U.S. naval and marine action, a multi-service action, or a joint action with South American countries.

Mr. Dulles said that the Swan Island radio was ready to go and that it would be a covert rather than an overt operation. The President said that he wanted the Cuban people told that the American people like them and are trying to help them. Secretary Dillon stressed the importance of speed and the President indicated his uncertainty as to the status of the Swan Island radio. In response, Mr. Dulles stated that if we want to run this radio covertly, we had to go through certain forms. Our plans contemplated making USIA the American governmental voice. He inquired as to whether it was desired to shift the Swan Island radio from a covert to an overt basis. Secretary Dillon said that no change was desired but that it was important to get going. Mr. Dulles stated that this facility had been put up in record time and that one remaining requirement was a permit from the FCC.

Mr. Allen noted that since the President had made his statement the day before, USIA had had it on short-wave every hour on the hour. There were not many short-wave sets in Cuba, but experience had proved that in an emergency situation people who do have shortwave sets turn them on. The President inquired why it was not possible to reach Cuba by broadcasts from Key West. Mr. Allen stated that it was not possible to reach Cuba during the good listening hours from Key West because there were so many stations in Havana and the Key West signal was not strong enough to get in over these local stations. The Vice President suggested that the former Cuban Ambassador to Britain might be useful in broadcasts to Cuba. [1 sentence (2½ lines) not declassified]

After Mr. Gray had announced that the Near East paper would be put over until the following meeting, the President briefly mentioned the question of whether he should stay in Washington in view of recent developments. This, he suggested, was something of a dilemma for if he did go to Newport, people would tend to assume that these [Page 990] problems were not important. On the other hand, if he changed his plans, people might assume that the situation was even more grave than it was. Secretary Anderson thought that it would be important for the President to stay for a short while in Washington. Secretary Gates agreed.

The National Security Council:8

Noted and discussed an oral presentation by the Acting Secretary of State regarding U.S. policy toward Cuba and the Dominican Republic, with specific reference to actions the United States is taking or may have to take in the near future.
Agreed that the United States should, under existing circumstances, take the following actions:
In the event that it is decided to advise U.S. citizens in Cuba of the desirability of evacuating the country, such advice should be given by the U.S. Embassy in Havana without public announcement, in the expectation that knowledge of this action would have a greater impact upon the Cuban Government than a public announcement.
Means should be found, including legislation if necessary, to avoid giving the Dominican Republic any of the sugar quota formerly allocated to Cuba.
The United States should seek to achieve simultaneous action against the Governments of Cuba and the Dominican Republic in the Organization of American States.
The United States should develop an additional positive assistance program, preferably through the Inter-American Development Bank, which would be designed in cooperation with the Latin American nations to better mobilize resources for the promotion of economic progress of the Latin American people, particularly through improving and expanding the utilization of arable land. Such a program, including any required legislative proposals, should be urgently developed under the leadership of the Secretary of State in consultation with the Treasury Department and other interested departments and agencies, and the National Advisory Committee on Inter-American Affairs, subject to usual budgetary procedures. Pending preparation of the detailed program, a public statement by the President for early release should be prepared under the leadership of the Secretary of State; this statement would announce that the United States is developing such a positive assistance program, which will be the subject of an appropriate message to Congress and discussion of cooperative action with the Latin American nations. The statement would avoid raising unwarranted expectations as to the additional funds to be provided by the United States and would not be so cast as to create expectations as to legislative action on the program during the current session of the Congress.
Immediate efforts should be made to obtain the cooperation of U.S. allies, especially Canada and other NATO members, in making economic measures against Cuba effective. The forthcoming State–Defense–Treasury discussions with Canada should, among other means, be utilized for this purpose.
The Departments of State, Justice, and other interested departments and agencies should study urgently whether future actions which may be required against Cuba would more approximately be taken under a new Presidential emergency proclamation, rather than under the existing Korean emergency authority. The Department of State should consult with other responsible departments and agencies with respect to its catalogue of such future actions, including among others such measures as termination of tariff perferences, freezing Cuban assets and the imposition of export, transactions, and transportation controls.
Necessary contingency plans for possible action with regard to Cuba and the Dominican Republic, including current military planning, should be kept in readiness
Efforts should be expedited to reach the Cuban people by radio, in order to explain U.S. actions and attitudes and to make clear the friendliness of the U.S. people toward the Cuban people.

Note: The action in b above, as approved by the President, subsequently circulated for appropriate implementation by all responsible departments and agencies, under the leadership of the Secretary of State.9

Robert H. Johnson
  1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Prepared by Robert H. Johnson on July 11.
  2. The Cuban Government seized the Texaco facilities on June 29 and the Esso and Shell facilities on July 1. Ambassador Bonsal delivered a note of protest to the Cuban Government on July 5. For text, see Department of State Bulletin, July 25, 1960, pp. 141–142.
  3. On July 6, the Cuban Government passed a nationalization law authorizing nationalization of U.S.-owned property through expropriation. Ambassador Bonsal delivered a note of protest on July 16; for text, see ibid., August 1, 1960, p. 171.
  4. July 10.
  5. See footnote 3, supra.
  6. No record of this meeting has been found.
  7. Not further identified.
  8. Paragraphs a and b and the Note that follow constitute NSC Action No. 2259. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
  9. At a meeting at the White House immediately following the NSC meeting, the President, Vice President, Gates, Dillon, McCone, Allen Dulles, and Gordon Gray, among others, discussed the U.S. position to be taken at the Geneva nuclear test talks and the difficulties of coordinating policy with the British Government. According to John S.D. Eisenhower’s memorandum of the discussion, the following exchange took place:

    “The President said the difficulty in these decisions is that there are no two-sided problems. He cited Cuba as an example. (Here Mr. Dillon volunteered that Cuba is sending some people to the UN in New York. With Cuba’s predilection to attack the U.S. in the U.N. rather than the OAS, this may have some significance. Unfortunately, since the UN is in New York, we are required to give them a visa.)” (Eisenhower Library, Whitman File, DDE Diaries)