208. Summary Record of the 526th Meeting of the National Security Council With the Congressional Leaders1

Various Subjects

The President opened the meeting with the Congressional Leaders by saying that his purpose was to bring them up to date on recent developments. Various Council members would report on current situations. He first called on Secretary Rusk for a summary of developments in Brazil.2

Secretary Rusk summarized our relations with Goulart, including Goulart’s discussion with President Kennedy, and later, in Rio, his discussion with the Attorney General.3 Despite our efforts to persuade Goulart to follow a democratic reform program, and despite our efforts to support the Brazilian economy by making large loans, Goulart had moved toward the creation of an authoritarian regime politically far to the left. The current revolt in Brazil was not the traditional “golpe” of the Latin American variety but rather a combination of governors, government officials and military leaders who had joined together to oust Goulart when they became convinced that he was leading Brazil to economic and political disaster. As to the current situation, the rebel government now has full control of the country. The military leaders in Brazil have long visualized themselves as guardians of the democratic process.

Secretary Rusk described the major problems which the new government in Brazil faces. First are the economic problems which involve renegotiation of large loans coming due shortly and revision of those economic policies of Goulart which had resulted in inflation and economic difficulty. The Goulart men will have to be removed, which [Page 457]means a reorganization of the governmental structure. There is a reasonable prospect now that the new government will turn its attention to the major problems of Brazil. The U.S. did not engineer the revolt. It was an entirely indigenous effort. We now have fresh hope that Brazil can face up to its current problems.

Senator Dirksen asked how much money we had given in grants to Brazil. Director Bell reported that we had made very few grants but had made many large loans. Senator Dirksen then asked if there were any outstanding unpaid loans. Mr. Bell replied that we are now owed approximately $136 million in payments on loans which amount to between $500 and $700 million. Senator Dirksen asked whether Brazil had lived up to its agreement to the stabilization plan we had financed. Mr. Bell replied that we had put up $60 million when they began to implement parts of the stabilization plan. When the Brazilians did not follow through on the plan, we then stopped further assistance.

Senator Hayden asked whether it was not true that the Brazilians had an excellent record of loan repayment. Mr. Bell said no Brazilian loan was in default.

Senator Morse said he thoroughly approved of the way the President and the State Department had handled the situation in Brazil. He said we would have to provide new economic assistance to Brazil but he hoped that the time had come when we could get something for this new aid.

The President replied that we are hard at work with our allies to provide the economic help which the new Brazilian government will need. We are doing everything possible to get on top of the problem of helping the new government.

Senator Dirksen asked about the position the new government would take toward expropriation of U.S. private investments. Secretary Rusk said that we did not know, but that one of the first things we would talk to the new government about would be their attitude toward expropriating U.S. property.

Senator Fulbright asked what effect there would be in Latin America if the coffee legislation4 now before the Senate were rejected, as appeared probable. Secretary Rusk replied that Senate rejection of the coffee plan would be very serious for us and for the Brazilians, as well as to the Latin Americans.

Senator Dirksen said he felt that if the legislation were called up now it would be defeated.

[Page 458]

Under Secretary Ball said that we should look at the coffee agreement in the light of the new Brazilian situation. If the agreement were rejected by the Senate, the new Brazilian government would consider the action a “no confidence” vote. He said he could not stress too much the importance of Senate approval of the coffee agreement. A rejection would be no less than a disaster for the entire Alliance for Progress.

[Omitted here is discussion unrelated to Brazil.]

Bromley Smith 5
  1. Source: Johnson Library, National Security File, NSC Meetings File, Vol. I, Tab 7, 4/3/64. Top Secret. Drafted by Bromley Smith. McCone also drafted a record of the meeting. (Central Intelligence Agency, Job 80–B01285A, No. 2, Memos for the Record, 1 January–5 April 1964)
  2. Shortly before the NSC meeting, Rusk called Robert Adams in ARA: “Sec asked him to put together a dozen examples of appointments that Goulart was making that looked like extremism, and 3–4 good examples of kinds of proposals G was making which seemed to undermine constitutional situation down there. Sec needed them by 1:15 for 2 pm meeting.” (National Archives and Records Administration, RG 59, Rusk Files: Lot 72 D 192, Telephone Calls 3/20/64–4/9/64)
  3. Goulart met President Kennedy during a visit to Washington, April 3–4, 1962. For documentation on the visit, including memoranda of conversation, see Foreign Relations, 1961–1963, vol. XII, Documents 223 225. Attorney General Kennedy met Goulart in Brasilia on December 17, 1962. A memorandum of conversation, transmitted in airgram A–710 from Rio de Janeiro, December 19, is in the National Archives and Records Administration, RG 59, Central Files 1961–63, 033.1100–KE/12–1962.
  4. Reference is to legislation allowing the United States to fulfill its obligations under the International Coffee Agreement of 1962. The bill, rejected by the House of Representatives in 1964, was eventually passed and signed into law in May 1965. (79 Stat. 112)
  5. Printed from a copy that bears this typed signature.