214. Telegram From the Embassy in Brazil to the Department of State1

2790. 1. President Castello Branco received me in Brasilia Tuesday afternoon2 for one and one-quarter hours. At start, I presented him book on White House, recently published Portuguese translations of LBJ biography and collection of speeches, and Kennedy half dollar. All were graciously acknowledged.

2. I said purpose of visit was to review general situation prior to Washington consultations3 and learn Castello’s state of mind after two months in office. President asked if I had seen Juracy Magalhaes recently (I had done so late Tuesday morning) and then showed me staff report on areas of friction abroad, including chapters on AMFORP, Hanna, CTB, French contentious cases, and remittance of profits, saying that work on resolution of all was going forward rapidly. Then showed me separate mimeographed bill on profits remittance revision, which would receive final cabinet consideration Thursday and go to Congress promptly thereafter. President emphasized systematic staff [Page 468] work as basic feature his administration, saying he felt pleased with progress considering that neither he nor ministers had expected to be in office and therefore had lacked period of advance preparation. He mentioned main legislative items of housing, taxes (in two phases), bank reform, agrarian reform, the strike regulation law, all as indicating real progress in governmental process. He said threefold goals of inflation containment, development, and reform were no mere slogans, but genuine objectives which were being fleshed out in administrative and legislative measures. We had a little interchange on need for popular slogans to win broad support, which president acknowledged but said he approached with wariness, considering damage done the country by such past slogans as “petroleum is ours,” and “reforms with or without the constitution.”

3. President then said he had great interest in Alliance for Progress and its effective application in Brazil. Said he felt threefold program entirely in line with charter of Punta del Este, also actively interested in having social as well as economic side maintained, noting special importance of social side in northeast. He said investments in human beings essential even for effective economic development there, and he rejected argument that social benefits would come automatically from promotion of industrialization. President talked warmly of recent Recife meeting with Kubish.

4. I then turned conversation to political side, saying that cancellation Kubitschek political rights would raise serious questions abroad and asking how he would explain it if in my place.4 President first traced formal steps in procedure, stating that charges and requests for cancellation came from three ministers, that evidence was carefully collected, National Security Council considered and recommended, and he then acted. As to reasons, he said they were both past and future. In past, despite Kubitschek’s substantial contributions to development of country, these had been made without regard to financial responsibility and with large scale corruption, including personal enrichment Kubitschek and his friends. In addition, Kubitschek had wooed Communist support, and had paid price of letting them get into the governmental [Page 469] machine, where as previously they had been working on students and trade unions and others outside. He said that among other things, Kubitschek had dismissed Lucas Lopes, who now one of Kubitschek’s leading defenders, as Finance Minister at insistence of Prestes. As to future, cancellation of mandate and therefore candidacy was essential to safeguard country against rebuilding of same phenomena of corruption and Communist infiltration from which country had suffered in last decade. Kubitschek had been intending to base his candidacy not merely on PSD, but on Goulart supporters in PTB and on Communist collaboration. President said he recognized that procedures had distasteful aspects, not meeting usual norms of right to defense or judicial review, but he felt that conditions of country initiated by Kubitschek himself and greatly intensified by Goulart had made exceptional procedures indispensable to effective clean-up and replacement of country on sound track of honest democratic government. June 15 would end this phase, any further clean-up actions taking place under normal National Security Law S. President noted that popular reaction to Kubitschek cancellation had been very small. The Congress was debating subject at that very moment, and he expected PSD speeches denouncing injustice and making some sort of manifesto, but he did not believe PSD would obstruct governmental program.

5. I then asked whether he planned to issue any sort of official declaration or justification of action on Kubitschek. President replied that something of sort was being projected, on basis partial rather than full dossier, since full revelation would be embarrassing to nation. I urged strongly desirability of issuance some form official justification, emphasizing importance of this to public opinion abroad. President appeared to be impressed by my emphasis on this point.

6. I then speculated on political effects, including likelihood that PSD might now turn to Kruel as candidate, and danger militarization of whole political process, noting concern in foreign press and public opinion of possible slide into military dictatorship. (This whole political discussion was conducted with caution, since I am still developing personal relationship with Castello Branco of type permitting candid treatment such matters.) President replied he well aware concern of excessive militarization but absolutely confident that action his government would dispel this concern. Pointed out that military candidates in Brazil had never gotten much enthusiasm, even from the armed forces noting such cases as those Monteiro, Lott, etc. Also said he would require any officers desiring to be candidates to take leave from jobs, said they could not use their offices as campaign headquarters in the way Lott had done. He said, incidentally, that Kruel had telephoned a few days ago to indicate his personal endorsement of cancellation Kubitschek political rights.

7. I then raised question of possible prolongation Castello’s own mandate. On this, he was reticent, although indirectly indicating reluctance [Page 470] consider anything which appeared to be of personal benefit to him. We discussed in this connection length of necessarily unpopular austerity phase of anti-inflation effort, which he said might be much longer than six months but he hoped would be over by first anniversary of revolution next April. Also said that essence of his government would be noninvolvement in campaign. Remarked with smile that Lacerda had had anti-Goulart issue as major campaign weapon, and might in future become anti-Castello, although he hoped that Lacerda’s future political posture would become more positive than negative.

8. As conversation concluding we covered smaller points. President said had discussed C–130 project with Air Minister earlier same day, with negotiations to proceed. Details will go through JBUSMC.

9. In response to question on embarked aviation, President said he would settle this within few weeks. Issue could be settled only by President, and he intended to resolve it once for all. Then remarked that Kubitschek had bequeathed country two aircraft carriers, the Minas Gerais and Brasilia, one anchored uselessly in Guanabara Bay and the other anchored uselessly in the central plateau.

10. President inquired on relation timing my return and Juracy Magalhaes arrival in Washington. Said he placed highest hopes on Juracy’s effectiveness as Ambassador. In addition to formal credentials, he is giving Juracy personal letter to LBJ.5 He also mentioned Lacerda’s mission to Europe and US to help explain revolution, and indicated hope President Johnson might be able receive Lacerda.

11. President then asked me about US political party convention prospects, Presidential elections, and other aspects current US scene. We also talked of common acquaintances, President speaking of Colonel Walters in terms of affection and respect. Conversation ended on most cordial note, leaving me impression real progress in melting reserve which is one of Castello’s personal characteristics.

12. Comment. My general impression was extremely favorable. I did not encounter any nervousness or anxiety on Castello’s part, despite fact that Kubitschek action obviously tough decision. On contrary, impression was rather one of calm resolve to get on with problems of clean-up, administrative rebuilding, and positive program. I also noted feeling of greater confidence on economic subjects, together with full backing policy lines recommended by Campos.6

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 17 US–BRAZ. Confidential; Priority; Limdis.
  2. June 9.
  3. Gordon was scheduled to arrive in Washington on June 13 to review the status of economic assistance to Brazil. (Telegram 2695 from Rio de Janeiro, May 29; National Archives and Records Administration, RG 59, Central Files 1964–66, AID(US) 9 BRAZ) He was one of six Ambassadors in Latin America to meet President Johnson on June 18; see Document 18. According to Rusk’s Appointment Book Gordon also met Rusk on June 18; no substantive record of the meeting has been found. (Johnson Library) The next day the Department reported that AID had approved a $50 million loan to Brazil for balance of payments assistance. Although the agreement was to be signed immediately, the actual disbursement of funds was made contingent on settlement of the AMFORP dispute. (Telegrams 1776 and 1778 to Rio de Janeiro, June 19; National Archives and Records Administration, RG 59, Central Files 1964–66, AID(US) 9 BRAZ) The United States and Brazil signed the loan agreement on June 23.
  4. On June 5 the Department suggested that Gordon convey to Castello Branco the “seriousness” of international reaction to the suspension of Kubitschek’s political rights. (Telegram 1697 to Rio de Janeiro; ibid., POL 29 BRAZ) In telegram 1716 to Rio de Janeiro, June 9, Mann also recommended that Gordon express to Castello Branco “the mounting concern which we feel here” regarding actions taken under the Institutional Act: “The failure on the part of the Brazilian Government to follow due processes of law and to proceed in a democratic manner will increase our difficulties in responding to Brazilian requests for economic assistance.” (Ibid.) The Embassy reported that telegram 2790 had arrived after “Ambassador’s call on Castello Branco in Brasilia and on eve his departure for U.S.” (Telegram 2818 from Rio de Janeiro, June 11; ibid.) Mann reported on the “Kubitschek thing” in a telephone conversation with the President, June 11; see Document 16.
  5. Magalhaes evidently delivered the letter when he presented his credentials to President Johnson on July 9. (Johnson Library, President’s Daily Diary)
  6. In a June 15 memorandum to Bundy, Sayre offered the following comment: “All reporting indicates Brazil is seriously proceeding on reform measures. Unfortunately there is an undercurrent that the U.S. owes Brazil assistance because it threw out the Communists.” (Ibid., National Security File, Country File, Brazil, Vol. IV, 4/64–8/64)