333. Telegram From the President’s Special Assistant (Rostow) to President Johnson1

CAP 67779. Ecuadorean PL–480 Loan: Special Factors Involved.

When we informed Covey Oliver of your decision on the PL 480 loan to Ecuador, he expressed deep concern.

I told him to prepare a memorandum to you giving his reasons why he considers it important to make the loan. This is his message to you:

I am working very hard on trying to turn the Ecuadorean President’s attitude toward the Alliance for Progress around. I cannot promise success, but I have fair Hopes. Your Ambassador there has been active and helpful, and I have spent about three hours with the AID Director there2 on this topic while he was here.

The Ambassador, the Director and I believe that there is a reasonably good chance that if handled as a good teacher would handle a lagging and defensive pupil, we might bring President Arosemena up from the bottom of the Alliance class to the median level. (The Ambassador has written me (eyes only)3 that if allowed to drift and sour even more, this man might do something foolish, such as declaring a prominent Embassy official persona non grata. This latter should not be taken as a threat but as an indication of the President’s basic psychological problem: he was a late starter on what the Alliance is all about, and he has yet to catch up with the other presidents in understanding.)

Another factor, very important in Latin ways of looking at things, is that my able predecessor pretty well made what the Ecuadoreans consider a commitment about this PL–480 loan—at least it seems that he did not spell out to the Ecuadoreans all the steps involved in getting final approval.

A new Ecuadorean Ambassador will be presenting credentials to you on September 12. The denial of the loan will make it hard for me to carry on my special course for Ecuadoreans with him, as I had expected.4

  1. Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Secret. A notation on the telegram indicates that the President saw it. Oliver’s original memorandum to the President, September 7, is ibid., Memos to the President, Walt W. Rostow, Vol. 40.
  2. L. Paul Oechsli.
  3. Not found.
  4. According to the President’s Daily Diary, the new Ambassador, Carlos Mantilla Ortega, presented his credentials to the President in a brief meeting (12:23–12:28 p.m.) at the White House on September 12. (Johnson Library) Johnson met Oliver immediately following the reception (12:28–1:04 p.m). No substantive record of either conversation has been found.