302. Memorandum From Secretary of State Rusk to President Kennedy1
SUBJECT
- The Dominican Republic
You have inquired regarding the assertion that the elimination of the Dominican Republic’s windfall sugar quota will lead to the downfall of Trujillo and his replacement by a Communist-oriented regime.2
Economic Aspects
It is true that the Dominican Government is faced with serious economic difficulties. Foreign exchange reserves are kept secret by the Dominican Government but they are believed to be low. Similarly, the current budgetary position is secret but we assume that by reductions which have been made in the public works program and other civilian costs and by the increased taxes which have been placed on imports and exports and budget will be nearly in balance. The level of business activity is low, credit is scarce, unemployment high and the cost of living has risen.
The principal causes of Trujillo’s economic difficulties are not to be found in our U.S. sugar policy but rather in his excessive military and propaganda expenditures coupled with unwise fiscal, financial and investment policies and his systematic milking of the Dominican economy for his own personal gain. While increasing U.S. purchases of sugar six-fold (the estimated windfall quota for the Dominican Republic between April 1 and December 31, 1961 is about 466,000 tons which at the U.S. price would bring a premium of approximately $22.6 million over the price which could be obtained on the world market) would doubtless help the Dominican economy, it is not proposed to eliminate his historic share of the U.S. market (the Dominican basic quota for the April 1-December 31, 1961 period is approximately 83,000 tons which represents a premium of approximately $4 million over what could be obtained on the world market).
Since Trujillo owns directly or indirectly about 60 percent of the sugar-producing properties in the Dominican Republic, a large part of the [Page 617] windfall accrues not to the Dominican economy but to Trujillo personally. Furthermore, with a personal fortune estimated to be somewhere in the neighborhood of $500 million, a substantial part of which consists of liquid holdings abroad, Trujillo has the personal resources, if he wishes to use them, to provide substantial amounts of capital to the Dominican economy.
Political Aspects
In spite of economic difficulties there is no solid evidence that Trujillo’s fall is imminent. Trujillo rules by force and will presumably remain in power as long as the armed forces continue to support him. While there is evidence of dissatisfaction on the part of a few officers there is as yet no cogent evidence of large-scale defection within the officer corps.
The underground opposition to Trujillo composed of business, student and professional people is believed to by predominantly anti-Communist. They have substantially increased in numbers in recent years but have been unable to move effectively against Trujillo. In addition to opposition groups in the Dominican Republic, there are numerous exile groups located principally in Venezuela, Cuba, United States and Puerto Rico. In some cases these groups have been infiltrated by pro-Castro or pro-Communist elements.
In the event the Trujillo regime should fall the degree of danger of a communist takeover would, according to our intelligence, depend on whether the domestic or the exile groups succeeded in gaining dominance. The danger would be less if the domestic opposition gained power, and it would be increased substantially if infiltrated exile groups should emerge as the next government.
Finally, account must be taken of the adverse effect on our position of leadership in the hemisphere if we support tyranny in the Dominican Republic. Our ability to marshal Latin American support against the Castro dictatorship would be impaired; Venezuela has made it clear that action against Trujillo is a condition precedent to Venezuelan support of collective action against Castro.
Comments have also been requested concerning the progress which has been made in assuring an orderly takeover by anti-Communist elements should Trujillo fall.
Our representatives in the Dominican Republic have, at considerable risk to those involved, established contacts with numerous leaders in the underground opposition. These leaders look to the United States for assistance. They believe in a free enterprise economic system, plan the nationalization of public utilities with compensation to the owners, intend to institute a land reform program based on agricultural cooperatives and the nationalization of idle agricultural land, and intend to confiscate all of Trujillo’s properties. They have agreed on a president to lead them, propose to prevent the re-entry of Communist and subversive [Page 618] agents and to hold elections within a two-year period during which they plan to carry out their program. No financial assistance has been given these underground leaders [2-1/2 lines of source text not declassified].3
These leaders are believed to have considerable support within the country and while they plan immediately to seize control of the government if Trujillo falls, their ability to carry out their plans obviously depends to a large degree on the attitude of the Dominican armed forces. They believe they have important support in the officer corps.
With respect to Dominican exile groups, [less than 1 line of source text not declassified] has established useful working relationships and attempted to distinguish between democratic and undemocratic elements. Conversations with them continue. These exile groups have received limited financial assistance and propaganda assistance in the form of certain radio broadcasts.
Should the underground leaders with whom we are in contact fail to obtain the support of the Dominican armed forces and should they call on the United States for assistance, a question arises as to whether the United States would be prepared to intervene militarily either unilaterally or collectively with other American States. This question needs study and a review of the entire plan is desirable. It is recommended that Mr. Berle’s Task Force be assigned this task.4
There is enclosed a memorandum containing additional background information.5
- Source: Kennedy Library, National Security Files, Countries Series, Dominican Republic, General, January-June 1961. Top Secret.↩
- National Security Action Memorandum 17, approved February 13, directed Secretary of State Rusk to prepare a memorandum setting forth the status of U.S. relations with the Dominican Republic and to analyze the effect of a possible elimination of the Dominican Republic’s sugar quota on the stability of the Trujillo regime. (Department of State, NSAM Files: Lot 72 D 316)↩
- The January 12 decision to authorize such deliveries is described in the Interim Report of the Select Committee to Study Government Operations with Respect to Intelligence Activities, United States Senate, “Alleged Assassination Plots Involving Foreign Leaders,” November 20, 1975, pp. 196-197.↩
- A footnote in Rusk’s handwriting reads: “This has been done.” No record of the Task Force’s deliberation on this matter was found.↩
- Not found.↩