SPECIAL REPORT ON THE IMPLEMENTATION OF NSC 144/1 (LATIN AMERICA)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R003000030001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 16, 2016
• Document Release Date: March 17, 2005
• Sequence Number: 1
• Publication Date: July 8, 1954
• Content Type: MF

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OPERATIONS COORDINATING BOARD
Washington 25, D. C.
July 8, 1954
SUBJECT: Special Report on the Implementation of NSC 144/1
(Latin America)
The attached special report on the above subject is
transmitted for consideration by the Board Assistants on
July 16th. This report covers the period May 1 --June 25,
1954; and was submitted by the working group in response to
my suggestion that a brief statement of the problems in the
implementation of this policy be prepared in connection with
a forthcoming NSC policy review.
suf., / r`Q: 'f d.
liner B. Staats
Working Group Chairman's Memo
to Executive Officer, OCB,
Subj. as above, dated 7/7/54,
with attachment as listed.
NSC review(s) completed.
Executive Officer
Downgraded to CONFIDENTIAL
OCB File No. 54 TOP SECT when removed from attachment.
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COPY NO.
OPERATIONS COORDINATING BOARD
WASHINGTON 25, D.C.
July 7, 1954
MEMORANDUM FOR THE EXECUTIVE OFFICER, OCB
SUBJECT: Special Report on the Implementation of NSC 144/1 (Latin
America)
1. Pursuant to your request, attached hereto, from the Working;
Group on Latin America, is a Special Report on the implementation of
NSC 144/1, "United States Objectives and Courses of Action with Respect
to Latin America,"
2. The Report is a brief statement of emerging problems in the
implementation of NSC 144/1, together with suggestions for their so-
lution by revision of current policy and adoption of additional courses
of action.
Robert F. Woodward
Deputy Assistant Secretary of State
for Inter-American Affairs
Chairman, Working Group on
Latin America
Attachment:
Emerging Problems in the Implementation of NSC 144/1, together
with Suggestions for their Soluticm by Revision of Current Policy
and Adoption of Additional Courses of Action
i
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G PROBL N - THE AWIWIENTATION OF NSC 144/1, TOGET ER WITH
SUGGESTIONS FOR U IRSSOLUION BY RE ON OF CURRENT POLICY AND
ADOPTION OF ADDITION ,SES OF ACTION
1. It Is necessary to re-define and re-emphasize our politic .l arc
economic interests in the. Latin American countries,
a. Insufficient attention has been given within the U.S.
Government to the interests and problems of the Latin Aierican countries
as, a whole. This situation has become particularly acute during the post
World War II situation when the U.S. was clearly placing its major intere_I4
and emphasis in Europe and latterly in Asia. It has now become necessary
to re-state our continuing political and economic interests in the Latin
American area,
be, This might be accomplished bycbanging paragraph 4.b of NSC
144/1 to read as follows:
(1)
"An orderly political and greatly accelerated
economic development in Latin America so that the
states in the area will be more effective members
of the hemisphere system and increasingly important
participants in the economic and political affairs
of the free world."
2. The United tates is handicapped in attaining adequate pro-
duction in Latin America of raw materials essential to our security
a. This objective is set forth in paragraph 4.e of NSC 144/1,
and we are currently laboring under this handicap because of the absence
of any method of assuring reasonably secure markets for these materials.
b. A partial solution of this problem would appear to be a
larger and longer term U.B. program for materials'abcuisition.
3. There are defic encies in current policy and implementing pro-
cedures-pertaining to the equipment standardization objective.
a. Military standardization is set forth in paragraph 4..g of
NSC 144/1 as an objective and as a course of action in paragraph 18.e.
The shortcomings of our present policy are highlighted by the increasing
number of purchases of European military equipment by Latin American
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countries largely because of their inability to purchase such equipment fr(x
the U.S. in the amounts and on the terms desired. An additional reason foa'
our difficulty would seem to be haphazard competition between the sources
of supply in the U.S. and other countries,
b. To remedy this we should be able to offer Latin American
countries competitive prices, more rapid delivery, and better payment
terms, including long-term payments, use of soft currency and barter
deals. Specifically, paragraph lg,.e might be amended along the following
lines:
(1) "Seek the ultimate standardization along U.S,
lines of the organization, training, doctrine, and
equipment of Latin American armed forces, faci)_i-
tating the purchase of U.S. equipment by of eying
the cotun iesof this area competitive prices, more
rapid delivery and credit terms, including long-
payments, use of soft currency and barter deals."
co In order to reduce haphazard competition between suppliers
in the U.S. and other countries, consideration should be given to initiat-
ing a systematic arrangement with friendly countries that are in a po-
sition to supply armaments so that standardization and systematic servicing
would be given more importance in a division of world markets.
4. te' ent of the
U ted-S atga Pgait? .on on colonialism is cesaary,
a, The problems recently faced by our delegation to the Caracas
Conference, where three anti-colonialism resolutions were adopted against
the sole opposition of the United States, together with other related situ-
ations highlighting the necessity of facing this issue continuously into
the unfolding future, indicates the compelling need for a, clear re-atatemen"
of our position on colonialism.
b. This might be accomplished by providing in a re-draft of
iNSC 144/1 the following language which has been recently and repeatedly
used by the Secretary of State and Department of State spokesmen:
(1) 'The U.S., as the first colony of modern history
to i,rin independence for itself, instinctively shares
the aspirations for liberty of all dependent and co-
lonial peoples. It is U.S. policy to help, not hinder.
the spread of liberty. The U.S. has in the past and
will continue in the future to sponsor the development.
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of political independence. The U.S. does not seek
to perpetuate Western colonialism and will not
waiver in the slightest in its conviction that
the orderly transition from-colonial to self-
governing status should be carried resolutely
to completion."
5, There are continuing sources of irritation within the hemis ere
wl.iclz are a bitable for Communist propaganda purposesi,
a. A brief re-statement of some of the continuing sources of
irritation in the hemisphere which plague our relations with the Latin
American countries and which furnish the communists with sources of propa-
ganda are: misunderstandings over the movement of migrant farm labor
from Mexico to the U.S.; resentment in Panama over administration of the
Panama Canal Zone; resentment in Argentina over disposal of U.S. agricultu-
ral surpluses; and misunderstandings which arise over trade, tariffs and
currencyo
b. It is important to take early action to eliminate or reduce
these causes of friction since our failure to deal firmly and constructive-
ly with these problems means the continuance of the internal political situ-
ation in Latin America in which even friendly governments are driven to
seek leverage through a show of acceptance of anti-U.S. support, a maneuve_:
wthich provides invaluable opportunity for Communist penetration. Solutions
to these problems might be facilitated by amending paragraph 5. of NSC 141.e
to include a clause along the following liness
(1)
"Coordinating the efforts of all appropriate
agencies in a systematic program to eliminate such
recognized sources of friction as can be removed
or measurably ameliorated by United States action.."
17D6fense Department suggests the following wording:
"It is the objective of the U.S. to encourage the orderly
transition of dependent and colonial peoples from control by
colonial powers to self-governing states, or integration within
existing Western Hemisphere republics. This objective to be
pursued with conviction, but tempered and propitiously phased
so as not to imperil U.S. relations with our Western Allies."
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6. To combat Cc~unism in the Viestern Hemis here it is necessary
to encoUrae stronger anti-CaarmW.i.st.Rolicies by Latin American coun~riess
a. Recognizing the threat of communism in this hemisphere,
delegates to the recent Tenth Inter-American Conference ati am Cacas ap-
proved a U.S.-sponsored declaration signifying their opp
interference of international communism in the hemisphere collectively.. ndythe~-
tion to take effective measures, individually ernments of
it. The recent reluctance demonstrated by the people and d U.S. governments of
some of the Latin American countries to quickly support S p4-
regard to the recently proposed inquiry into i st Guatemala mai h& -
lights lights the necessity of inducing more vigorous anti communi
by other Latin American countries.
b. Using the Caracas declaration
policies, paragraph 6.a departure14Sfor
encouraging such stronger
144/1 might be amended to read as follows:
(1) "on the basis of &W anti communist declaration
of Caracas and the Ri.o Treaty, achieve through con-
tttation, assistance, and any other means the-most
gffecti-ve possible ac against interventionist
activities by Communists."
7. It is necessary to redefine and develop our fabric of economic
relations frith the Latin American-countries.
a. The circumstances surrounding the Caracas Conference and the
requirements for the formulation of sensitive and apposite U.S. economic
policy to be presented to the Latin .American countries at the forthcoming
to theeLa.need for a re-statement tin American countries~of our
Rio Conference clearly th demonstrate
economic interests ig
b. This might be accomplished by revising paragraph 7 of NSG= 1441
to read as follows:
(1)
"Encouraging Latin American governments to recog-
nize that the bulk of the capital required for their
economic development can best be supplied by private
enterprise and that their own self-interest requires
the creation of a climate which will attract domestic
and foreign private investment into enterprises ex-
pected to make a maximum contribution to economic
development.
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(2) "Assisting Latin American capital to design and.
implement programs for a vigorous and productive
role in economic development.
(3) "Strengthening the existing system of economic
development financing by providing the missing ccmpc-
nent in essential capital needs for high priority pro-
jects through an expanded program of lending and, where
appropriate, through development assistance advances as
a necessary factor in stimul,.ating or supplementing
private investment.`.
(4) "Continuing economic grant programs, where appropri-
ate, including such projects as the Inter-American Righ-
way and the Rama Road.
(5) "Continuing efforts to expand- U.S. trade with
Latin American countries through simplification of
customs procedures and reduction of trade barriers.
(6) "Expanding the program of technical cooperation
with the objective that individual countries may more
rapidly achieve improved living standards through
greatly accelerated economic development."
c. In developing our economic relations with the Latin Americans
it might be appropriate to bear in mind the following suggested approach:
(1) "In cooperating with the Latin Americans for
their economic development we should continue, more
rigorously than ever, to extend our cooperation in
such form and manner as make the Latin American
states increasingly mature and self-reliant, guarding
against the danger of designing or administering and
of the programs in such fashion as. might make the
Latin American states more dependent, psychologically,
politically, or economically. The concept of sharing
responsibility, which is basic to our inter-American
policy, requires mature and more self-reliant states."
$. Our information pro gam in Latin America requires continuing
timely guidance from policy makers,
a. In connection with the propaganda presentation of the Guate-
malan situation, it is necessary to bear in mind that successful informs-
tion treatment of policies is handicapped when those policies or actions
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based thereon are not known sufficiently in advance to allow time for the
preparation of materials vital to influencing public opinion abroad.
b. Accordingly, continuing close liaison is necessary between
appropriate departments and agencies and the Information Agency in the area
of policy formulation,
9. The U a Governmentmust conduct an intensified psychological of-
fensive on the nature of Soviet penetration of Let3.n America, including
substantial strengthening of the intelligence support for such a program.
a, Recent events in Latin America have revealed more clearly
than ever before the nature and extent of Communist penetration of the
Western Hemisphere. In addition Latin American support of Guatemala re-
vealed to a remarkable degree the extent to which foreign-manipulated
minorities could organize, demonstrate and make use of the means through.
lthich public opinion is expressed&
b. In order to achieve such a campaign of exposure, there is an
urgent need for a reappraisal of the techniques and the mechanism available
for our psychological offensive. There is a need for an intensified cam-
paign on the nature of Soviet penetration of Latin America, using local
and graphic examples such as are available in the situations in British
Guiana and Guatemala. This will require a substantial strengthening of
intelligence support for the program, since,without such backstopping,
no real understanding of such situations can be conveyed.
10. An intensified g2gpan of exposure of Soviet penetration of
the Americas must be balanced by an intensified pro-democratic counter
camps in.
a. The exposure of Soviet penetration of the Americas trill,
unless accompanied by a counteracting campaign on the pro-democratic side,
present an unbalanced picture within the Hemisphere.
b. Accordingly, the campaign of exposure must be balanced by
an immediate intensification of efforts to create and emphasize an under-
standing in the U.S, and the rest of the Hemisphere of what must be done
to preserve liberty, and they must be encouraged to create the mechanism
into which such beliefs might be expressed and propagated. This requires
the closest liaison between the Department of State, the Department of
Defense, FOA, the CIA and the USIA.
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c. It is, accordingly, necessary to strengthen the information
program and current developments suggest that the full resources requested
for the Latin American area in FY 1955 are urgently needed,
d. An additional course of action to achieve the objective 'ould
be a greatly increased Technical Trainee Program and Exchange of Persons
Program, especially in The Leader Grant field.
11. Certair.L tin_Aperiean governments have requested U.S, teams
to survey- their armament industries.
a. The Argentine and Brazilian Governments have sounded out the
U.S. recently about sending teams to their respective countries to survey
their armament industries. Similar requests may come from other govern-
ments or could be stimulated by the Department of State informing repre-
sentatives of the other Latin American countries that the U.S. is prepared
to consider requests from them for such survey teams.
b. To meet this situation the following new paragraph might be
inserted under "Military Courses of Action" between present paragraphs 15.
and 16., as follows%
(1)
"At the invitation of individual Latin American
states, the Uro-ted States, at its discretion, should
send teams of experts to those states to study the
problems of armament production for the purpose of
assisting them in the development of their munitions
and associated industries, providing (a) the sendirE
of each team conforms with the Inter-American Treaty
of Reciprocal Assistance and theplanning of the
Inter-.Amariean Defense Board, (b) the sending of a
team would not imply any commitment on the part of
the U.S. to follow the survey with financial assist-
ance to implement its recoommendations, and (e) the
Latin American state would bear the expenses of the
survey teams."
12. Delete paragraph 18.d of 14,50 14-4/1.
a, Since the course of action set forth in paragraph l8.d is
already covered by paragraph ll,g, it might be appropriate to delete para-
graph 18.d from a revision of NSC 144/1.
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13. It is necessary to establish priori atment for Latin American
problems irithin the U. _ bureaucra es*.
a. It is axiomatic that Latin American problems are not accorded
uaappropriate
the I-Agh priority consideration which should their
red ti i in
Conseque the ntly, pattern
the 148, bureaucracy*
with the Latin American countries continues in an un-energized state and
should be accelerated to a marked degree.
b. In order to accomplish this objective it might be appropriate
to consider inclusion of the following language in any re-statement of our
-relations with Latin America:
(l) "The difference between high and low priority
in a bureaucracy like ours manifesto itself in the
Every-
expedition with which problems are handled.
thing possible should therefore be done by the
agencies of our Government to give expeditious
treatment to the day-to-day problems in our relations
with the Latin American states--especially the com-
mercial and financial problems,, The the
supply and training problems.
should not be allowed to feel that matters of vital
importance to them are of such little consequence
in Washington that they get lost or bogged down in
our bureaucracy."
14. S*ec fi Fief policy ps~ers are needed for certain a n American
cam dies.
a. paragraph 3 of NBC 144/1 states that ""policies toward par-
ticular country situations, such as those in-Argentina and Guatemala, are
left for subsequent papers." Although NSC 5419 establishes Policy in
the event of Guatemalan aggression it does not deal with the situation in
Guatemala as a whole or with the problem of reduction or elimination of
the strong Communist influence in that country. There are at present no
policy papers for the countries above specified*
b. Since the lack of a policy statement on Guatemala has made
the current operations difficult, and since there is the noted absence ?)f
other specific country papers, it might be appropriate to papers prepare, as a
matter of priority and in the order indicated, policy plowing countriess
(1) Guatemala
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Argentina
Venezuela
Brazil
Chile
Nexico
Honduras
Bolivia
Panama
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