515. Memorandum From Secretary of State Rusk to President Johnson 1

SUBJECT

  • The Peruvian Situation

A Military Junta headed by Juan Velasco, Commanding General of the Army, deposed Peru’s President Belaunde October 3, sending him into exile, installing an all-military Cabinet. As a result of the coup, diplomatic relations are in a state of suspension and U.S. assistance programs are under review. The Revolutionary Government, which appears to be highly nationalistic, justified its action on grounds of general unrest and loss of public confidence in the Government. The new regime particularly stressed the pretext that the August 13 agreement with the Government and the International Petroleum Company (IPC) over the La Brea y Pariñas oil fields was a sell-out. One of the Junta’s first acts was to declare null the Act of Talara, which formed the basis of the IPC settlement, and on October 9 the President announced the expropriation of IPC’s oil fields, refinery, and other assets. In other statements the regime has given no indication of plans for scheduling of elections, but it has stated that all international obligations will be met.

The United States has initiated bilateral consultations through its Embassies with other Latin American Governments on the situation in Peru and the question of recognition, in accordance with procedures established at the Second Inter-American Conference of 1965. Public comment by Department of State spokesmen has been limited to factual answers to questions about the situation and expressions of concern about the coup.

Preliminary indications are that, in addition to those countries which follow the practice of automatically recognizing new regimes on continuing relations, most Latin American countries will resume relations relatively [Page 1069]soon. This would also be true of Western European and other trading nations. Only Venezuela has announced it is severing relations.

The implications of the IPC expropriation are being explored, including all relevant U.S. legislative provisions. These include the FAA and Sugar Act which can require a cutoff of U.S. assistance and of the sugar quota when property owned by U.S. citizens is taken without compensation. Standard Oil of New Jersey, the parent company of IPC, has asked that we take a reserved public position of the IPC take-over pending their own exploration of the possibilities of reaching some acceptable solution with the Peruvian regime.

In the period of “suspended” relations, we are making a realistic attempt to obtain from the military regime indications of its intentions to return to constitutional government within a reasonable time. We are also seeking its views as to international obligations to foreign citizens and property in Peru. While seeking clarification of these points, we are maintaining a flexible attitude to lower level administrative contact with the Military Government so that selectively we can do what we determine to be in our own interest, such as protecting American citizens, obtaining clearance for aircraft, and disbursing on loans to private parties. It is too early to judge when we will make a recommendation to you on resumption of relations.

Dean Rusk
  1. Source: Johnson Library, National Security File, Country File, Peru, Vol. III, 10/67–1/69. Confidential. Another copy indicates the memorandum was drafted by Shumate on October 10. (National Archives and Records Administration, RG 59, Central Files 1967–69, POL 23–9 PERU) Forwarded to the President as an attachment to a memorandum from Rostow, October 14, in which Rostow explained: “Since Rusk’s memorandum was drafted, the Junta has announced its intention to hold a national ‘referendum’ on the question of whether a new constitution is required before any elections are to be held. None of the Latin governments, except Venezuela, is disposed to insist on a commitment to hold elections as a pre-condition for recognition.” (Johnson Library, National Security File, Country File, Peru, Vol. III, 10/67–1/69)