Foreign Relations of the United States, 1964–1968, Volume XXXII, Dominican Republic; Cuba; Haiti; Guyana

104. Memorandum for the Record¹

Washington, June 10, 1965.

SUBJECT

• Dominican Task Force Meeting—June 10, 1965

PARTICIPANTS

• Tom Mann, Kennedy Crockett, Robert Sayre, Richard Phillips,² Anthony Solomon, William Rogers,³ Cyrus Vance, Joseph Califano, Adam Yarmolinsky,⁴ Richard Helms, Desmond FitzGerald, Donald Wilson, McGeorge Bundy, Gordon Chase

1. Economic Situation—Mr. Yarmolinsky, who had just returned from Santo Domingo, reported to the group in writing (see Tab 1⁵ and orally regarding the economic situation in the Dominican Republic.

(a) The Welfare Sector—Mr. Yarmolinsky said that we are in pretty good shape and that there are no real problems.

(b) The Private Sector—Mr. Yarmolinsky said that we are not out of the woods but that, generally speaking, the Dominican Republic is probably no worse off now than it was before the revolution. For example, credit is generally tighter than it was, but probably not much tighter than it ought to be. The port of entry problem is difficult but not insoluble. Major export activity is still going on.

Mr. Yarmolinsky said that, from an economic point of view, it is possible to operate the country for many months without the use of the rebel-held area. While Mr. Solomon agreed that the country could probably limp along for some time, there would be an unusually large number of people unemployed and there would be a heavy burden on us. He added that the major offices downtown contain the books and records, and when a business does not have books and records, it is going to do less business. For example, banks will only make loans they are sure of; they will be very careful if they donʼt know what people owe them.

Mr. Solomon noted that the Embassy had recommended that the U.S. consider supplying Dominican business concerns with working capital. Both he and Mr. Yarmolinsky disagreed with this recommendation and felt that, instead, we should broaden guarantees to banks and push them harder to make loans. The U.S. should not start lending working capital. This would be a Pandoraʼs Box; among other things, it would permit people to stay in business and send their own money out of the country. In this regard, there is a significant flow of money out of the country as well as a disturbing flow of people out of the country (400 per day).

(c) The Public Sector—There was considerable discussion about the problem of paying government servants on June 15. During the discussion, the following dimensions to the problem were noted: First, the total payroll is about 12 million pesos a month to 100,000 people (after the meeting, Mr. Solomon said the figure is probably closer to 90,000). Second, Imbert is now collecting between 5 and 7 million pesos of revenue per month. Third, normal revenue is between 12 and 15 million pesos per month. Fourth, last month we were paying full salaries; the average full salary is something below 200 pesos a month (after the meeting, Mr. Solomon said the figure is probably around 150 pesos a month).

The group discussed at length the question of what to pay government workers on June 15—nothing, one-half salary, a flat 50 pesos, full salary; the group finally decided, after much pulling and hauling, to pay the workers nothing on June 15 and to take another look at the problem in a few daysʼ time. There were a multitude of considerations raised, such as the following: First, nothing terrible will happen if there is a delay; the workers are accustomed to irregular payment. Second, we should wait to see what Imbert is going to do on pay day. Third, a delay with a partial payment at a later date (or, for that matter, no payment at all) might increase the pressures for the government workers to get behind an OAS political solution. Fourth, the people are not working and, in general, it is bad practice to pay people for nothing.

Mr. Yarmolinsky favored an attempt to take Imbertʼs revenue away from him; it would weaken Imbert politically. The group did not agree. Mr. Solomon noted that one would need a huge administrative machine to do this. Mr. Mann did not favor rocking the boat this hard at a time when Bunker was approaching the time for decision. Mr. Bundy said that this step is not crucial to controlling Imbert at this time; we have other and stronger forms of leverage in getting Imbert to go along with an OAS political solution.

2. The group discussed Bunkerʼs recent cable recommending an interim government of technicians to be followed by elections.⁶ Some points:

(a) The group agreed that there ought to be a reinstatement of the 1963 Constitution—with the controversial parts of it suspended until the people have had a chance to make a judgment on them. As a general rule, we should try to use as much of the downtown program as possible; while this will not be enough to win over the more extreme rebels, it will tend to bring some of the moderates along with an OAS solution.

(b) Mr. Mann thought that there should be a constituent assembly in 12 months and elections 6 months afterwards. Most of the group disagreed with this timing. Generally speaking, the group doubted that a provisional government could hang together that long, even with an OAS presence. In this regard, the group agreed that, whatever the length of time of a provisional government, there should be an OAS presence which would be sufficient to keep the military in the barracks.

(c) With regard to the cabinet, Mr. Bundy said that it should probably not be limited to technicians. There is considerable advantage in adding names which are respected by all groups even though they do have some political affiliation—e.g., Messina,⁷ Pastoriza.⁸

(d) The group agreed to send some guidance to Bunker. An uncleared cable, drafted by Mr. Mann and Mr. Sayre after the meeting, is attached at Tab 2.⁹

GC

1. Source: Johnson Library, National Security File, Files of Gordon Chase, Meetings on the Dominican Republic—Planning Group. Secret; Eyes Only. Drafted by Chase. Another record of this meeting is in a June 11 memorandum from Alexander M. Haig, Military Assistant to the Special Assistant to John T. McNaughton. (Washington National Records Center, OASD/ISA Files: FRC 330 70 A 3717, Dominican Republic 092, January–June 1965)
2. Deputy Assistant Secretary of State for Public Affairs.
3. Deputy U.S. Coordinator for Alliance for Progress.
4. Adam Yarmolinsky, Chief, U.S. Emergency Relief Mission to the Dominican Republic.
5. Attached but not printed. “Interim Report Emergency Relief Group,” is a 3-page summary of the economic problems caused by the crisis in the Dominican Republic. The Emergency Relief Group arrived in the Dominican Republic on May 17 and proceeded to distribute food and medical supplies, establish emergency banking facilities in the International Security Zone, and pay the salaries of all public employees for April and May. These tasks were transferred to the USAID mission on June 9 when Yarmolinsky and others returned to the United States.
6. Document 103.
7. Milton Messina, Dominican Ambassador to the United States.
8. Tomas A. (“Jimmy”) Pastoriza, a young progressive Santiago businessman with ties to the oligarchy.
9. Not attached; see Document 105.