Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

164. Memorandum of Conversation⁰

MC/6

Vanga, July 19, 1960, 11 a.m.

UNDER SECRETARY’S VISIT TO YUGOSLAVIA

July 17–20, 1960

PARTICIPANTS

• United States
  • The Under Secretary
  • Mr. E. O’Shaughnessy, Chargé d’Affaires
  • Mr. Graham Martin, Special Assistant to the Under Secretary
  • Mr. Leonard Weiss, Counselor for Economic Affairs and Acting
  • Director USOM
• Yugoslavia
  • President Tito
  • Leo Mates, Secretary General to President Tito
  • Koca Popovic, Secretary of State for Foreign Affairs
  • Vladimir Popovic, Chairman FEC Council on Foreign Economic Relations
  • Bogdan Crnobrnja, Assistant Secretary of State for Economic Affairs

SUBJECT

• Cuba

Prior to the meeting with President Tito, Mr. Dillon had met privately with Foreign Minister Popovic. (The discussion covered the same points as in the Tito conversation and therefore is not separately reported.)¹

President Tito welcomed Mr. Dillon and, after the usual exchange of pleasantries, invited him to speak on whatever matters he wished. Mr. Dillon indicated that since our attitudes and actions relating to Cuba were apparently not well understood in Yugoslavia, it might be useful to discuss the Cuban situation putting it into its proper historical perspective. Mr. Dillon said that the Cuban problem was important to us and involved rather deep emotional reactions on the part of the American people.

Reviewing our war with Spain, regarded by our people as a war of liberation, he outlined subsequent economic measures taken to aid Cuba. He described the very profitable arrangement which had been provided in more recent times by the US to Cuba with respect to sugar. Under this arrangement we paid Cuba 2$ a pound above the world price for sugar and thus contributed materially to Cuba’s economic well being.

Mr. Dillon recalled that when Batista overthrew the Machado regime he had at first instituted some social reforms of which we had approved. His last regime had relapsed into the same repressive measures of his predecessor and the Cuban people had wanted a change. Mr. Dillon noted that the US had stopped arms shipments to the Batista government, that Castro’s agents had operated in the US with relative freedom, that influential parts of the American press had been sympathetic to Castro, that after his overthrow of the Batista regime he had been permitted to visit the US and had received almost a hero’s welcome. In summary, Mr. Dillon pointed out, on Castro’s coming to power, the US reaction, both popular and official, was sympathetic to the social reforms expected of the new regime.

Then, Mr. Dillon noted, for reasons unclear to us, he started making antagonistic statements. He said the US would attack Cuba when we had no such idea, and indicated he would have nothing to do with the Organization of American States. He started fomenting difficulties in other countries in Latin America and developed close relations with the Soviet Union. We have reluctantly come to the opinion that he is operating as a satellite of the Soviet Union rather than being genuinely interested in social reforms.

Mr. Dillon stated that other countries in Latin America have become disturbed about Castro’s activities. The statements made by Khrushchev regarding his intention to go to Cuba² and other related matters were very unpopular with other Latin American countries. The latter do not wish to have an outside country interfering in the affairs of this hemisphere, and now want a meeting of Latin American states on the Cuban problem.

Mr. Dillon stated that we have the greatest sympathy for social reform in Cuba. While we are concerned about expropriated American property and want to see this matter fairly settled, it is not our first concern. We are concerned, stated Mr. Dillon, about Cuba’s becoming a center of Soviet influence. Because of our geographic proximity and direct effect on our interests we feel very strongly about this matter. Mr. Dillon recalled to President Tito the recent statement of President Eisenhower on this point³ and said it would be a great mistake for anyone to underestimate the seriousness with which not only this administration but any successor administration would regard this matter. We have, however, no intention to attack Cuba as the Castro regime has asserted.

President Tito thanked Mr. Dillon for his candid and lucid exposition of the problem. He stated that the Cuban people should have the opportunity to improve their economic conditions and develop the country in the manner in which suits them best. He was glad to hear from Mr. Dillon that we were not thinking of any “dramatic” action (that is, the use of force) and said he believes that the problem could be settled peaceably through negotiation. He felt that the whole problem has become accentuated by the general deterioration in the world situation. If it were not for this fact, the Cuban affair would be a relatively minor matter. He stated that with good will the problem could be peaceably settled.

He said that he was not familiar with all the details of the internal situation in Cuba and the statements made by Cuban officials. He felt, however, that the cut in the sugar quota was a very strong measure on our part and smacks of economic pressure.⁴ He suggested that perhaps measures, such as a reduction in the price of sugar rather than a cut in the quota with its discriminatory effect, would have been better in the situation.

Mr. Dillon stated that it would have been difficult to cut the price of sugar since we pay this price to other Latin American countries besides Cuba. He noted that a reduction in the price for Cuba only was also discriminatory just as a cut in the quota applicable only to Cuba. He stated that the Cubans had charged that as a result of our buying sugar from them, they were slaves to us, were unduly dependent on the US and wished to diversify. The Cubans have not been taking very good care of their sugar fields. As a consequence while Cuba will probably have a fairly good harvest next year (down only about 10%) our experts tell us there will be a big drop in the year after next and Cuba will not be able to satisfy our requirements and, at the same time, fulfill commitments to the Russians and requirements elsewhere.

Accordingly, Mr. Dillon continued, we felt that a reduction in the quota at this time and the increase of our purchases from other Latin American countries was warranted. He noted that we would still be buying substantial quantities of sugar from Cuba, some 2.5 million tons instead of the previous 3.2 million tons, that is, about 40% of Cuba’s sugar crop as compared with the previous half. Mr. Dillon noted that we intended to buy more sugar from other Latin American countries. Mr. Dillon indicated that these countries felt that the present arrangement, which had been established some 20 years ago, was unfairly favoring purchases from Cuba and that some adjustment was in order.

Mr. Dillon stated that we do not intend to take other measures against Cuba unless she forces us to. In fact, the economic aggression has been the other way, from Cuba not from us. He also noted that, in addition to Cuban measures of expropriation, Cuba has run up an unpaid bill of some $150 million on purchases from the US.

Mr. Dillon agreed with President Tito that the Cuban people should be permitted to develop their economy as they wish. He felt that the regime had gone astray and that it was up to the people of Cuba to correct the situation. He said that we do not want Cuba to become a center of international disturbances and agreed with President Tito that the general world situation had greatly exaggerated the difficulties with Cuba.

As the President later adjourned the meeting for luncheon he thanked Mr. Dillon for the clearness and frankness of his remarks, particularly on Cuba, which gave him a better understanding of that situation.

0. Source: Department of State, Conference Files: Lot 64 D 559, CF 1724. Confidential. The drafting officer is not indicated; approved by Dillon on July 21. The meeting was held in Tito’s villa. See also Documents 165–168.
1. On July 22, O’Shaughnessy prepared a memorandum of Dillon’s conversation with Popovic. A copy was sent to the Under Secretary of State. A marginal note on that copy reads: “Not distributed as considered unnecessary by CDD[illon]—same topics covered in Tito conversation.” (Ibid.)
2. Khrushchev’s proposed visit was announced on June 17.
3. July 9. For text of Eisenhower’s statement, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1960–61, pp. 567–568.
4. The United States cut off Cuba’s sugar import quota on July 6.