244. Information Memorandum From the President’s Special Assistant (Rostow) to President Johnson 1

SUBJECT

  • Brazil

A political struggle within the army continues in Brazil—with the result in doubt, and the prize being de facto control of all levels of government. President Costa e Silva issued another “Institutional Act” on December 13 under extreme pressure from his fellow generals—he hopes to use its extraordinary powers sparingly, but he is being pressed hard to widen the political purge and to clamp down permanently on [Page 544]the Supreme Court, the press, and other opposition expression so that the “work of the Revolution” can be finished in peace. He may be unseated by his military colleagues if he continues to resist invoking more extreme repressive measures.

Meanwhile, the country stays quiet, helpless to affect the course of events. To varying degrees labor, church, students, journalists, “intellectuals”, and most politicians are shaken and temporarily cowed. Most businessmen and some politicians applaud the tougher government line on “subversion and corruption”. Censorship is now technically lifted—but newspapers must practice a form of rigid “selfrestraint” or face confiscation.

Moderate civilian politicians urge the U.S. to wait quietly on the sidelines—not publicly denouncing the dictatorial trend—but holding back any new aid commitments until the struggle between moderates and radicals in the army is resolved. Our Embassy in Rio de Janeiro also advocates this course. State has followed this line since December 13—while maintaining normal diplomatic, aid, and military contacts, we have been “reviewing” our assistance programs, a polite way of saying “no new commitments.”

So far, the Brazilian Government has not disputed our posture on aid. The Finance Minister hopes we will soon release $50 million from the 1968 program loan—an installment due in December for which Brazil’s self-help performance fully qualifies. However, we are holding up this release until the political picture clears somewhat, in part in anticipation of strong negative reactions from the Congress, should we release quickly.

Unless Costa e Silva presses for the money—which he has not done to date, Secretary Rusk believes we should hold this important decision for the next Administration.

Walt
  1. Source: Johnson Library, National Security File, Country File, Brazil, Vol. VIII, Filed by LBJ Library, 7/65–1/69. Confidential. The memorandum indicates the President saw it.