The US and Latin America: Eisenhower, Kennedy and Economic Diplomacy in the Cold War 9780755624386, 9781350153233

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For Helen and Leo

ACKNOWLEDGEMENTS

Writing a book, as many people have said so well before me, can be a lonely and difficult task. Yet it can also be supremely rewarding – as the assistance and support received from others, and the opportunity to share ideas with so many excellent scholars, helps to provide a sense of community that is such a necessary part of the research and writing process. In writing this book I have accrued numerous debts and it is a real pleasure to be able to thank a few people here. First of all, those that supervised me at the postgraduate stage – David Ryan, Ian Jackson, Mark Sandle and Scott Lucas – were of fundamental importance in helping me to move from being a fairly raw undergraduate to a scholar whom, I hope, they can now feel proud of. Their encouragement and ideas were invaluable in helping me to conceive a viable project; their advice and patience were equally important at moments of difficulty and when the process of writing a doctoral thesis felt like it was beyond me. I am also very grateful for De Montfort University for taking a chance on me – twice – and for providing the institutional and financial support that allowed me to complete my PhD. Further financial support was offered by grants from the Dwight D. Eisenhower and John F. Kennedy foundations. Like any historian I was reliant on the wise counsel and superb advice offered by the various archivists at the repositories I visited for this project, who assisted me in tracking down various collections and files, and who patiently guided me through my first attempts to conduct archival research. Parts of Chapter 3 were originally published as ‘A Perfect (Free Market) World: Economics, the Eisenhower Administration,

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and the Soviet Economic Offensive in Latin America’ in Diplomatic History in 2008. I am grateful here for the editor’s permission to republish sections of that research. Since 2008 I have had the good fortune to be part of the American and Canadian Studies Department at the University of Nottingham, which has proved to be a perfect home in terms of encouragement and in furthering my ideas about the field I work in. Being in a department with so many talented scholars who are all interested in different aspects of my wider subject area has been truly inspiring. Liz Monaghan, Ian Brookes and Alex Simcock were fine company in shared offices and helped to lighten the more stressful times that academic life can sometimes impose. Beyond that I could legitimately list all of my colleagues at Nottingham for their help, advice and support; at times it has felt like we’ve been plugging away on the front line together and it simply wouldn’t be as much fun doing so without their friendship and collegiality. However, rather than do that I will instead name a few whose friendship has been especially welcome. Celeste-Marie Bernier, Maria Ryan, Stephanie Lewthwaite, Richard King, Spencer Mawby, Robin Vandome and Christopher Phelps have all read parts of this project or endured listening to me talk at length about it and I am most grateful for their support. Judie Newman, Sharon Monteith, Pete Messent, Graham Thompson and Peter Ling, meanwhile, have all offered leadership, mentoring and advice that has helped to make the murky waters of academia a little easier to navigate. Celeste-Marie Bernier, in particular, has proved a great comrade-in-arms while working together on the editorial team for the Journal of American Studies. Matthew Jones, now at the LSE, has proved a steadfast colleague and supporter. As a young historian I couldn’t have hoped to have had a better mentor and example of the sort of scholar I would aspire to be. Beyond Nottingham many people have offered advice and assistance, critiqued and challenged my ideas, and generally provided the sort of companionship that can make working in academia such a joy. Kaeten Mistry has been a firm friend throughout, always offering to read something I’ve written, generally there to serve as a sounding board for ideas, and happy to talk for hours about the state of the field. He has read every page in this book and offered thoughtful comments on each chapter. It would be no exaggeration to say that I don’t think it could have been done without him. David Milne has also provided great

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friendship and support, as well as being willing to read chapter drafts at short notice. To have a writer as talented as David say that he couldn’t find too much to complain about when reading my prose was a real compliment. Tom Allcock, who I first met as an MA student in one of my earliest classes at Nottingham, has gone on to become a fine scholar of US policy toward Latin America in his own right and is someone who has also willingly read chapters for me and pointed out where I am going wrong. Marilyn Young and Jason Parker both read various versions of the introduction and, on each occasion, offered thoughtful and penetrating comments. James Siekmeier read several early chapters and offered smart advice and good suggestions. Others, finally, offered much in terms of providing an opportunity to air ideas, offering feedback and critiques, or just being good friends: Tony Badger, Bob Brigham, David Ekbladh, Thomas Field, Lloyd Gardner, Tanya Harmer, Ann Heiss, Alan McPherson, Andrew Preston, Sarah Snyder, John Thompson and Dustin Walcher. Andy Rotter, Frank Costigliola and the participants at the 2012 SHAFR summer institute at the University of Connecticut provided an exciting and profoundly stimulating intellectual environment that will live long in the memory. Uta Balbier, Mark Storey and Nick Witham all offered the sort of companionship that is necessary when trying to survive academic conferences. Apologies to anyone I have missed off here. Most importantly of all, my family have provided a bedrock of support that has allowed me to pursue a career that I enjoy and, at the same time, served as a haven to return home to after research and conference trips. My parents managed to remain calm in the face of my erratic course toward university and then, eventually, on to doctoral study while eschewing anything that might be considered a proper career; my brothers and sisters, meanwhile, all provided love and kinship in their own particular ways and made sure that I never got too far away from my roots. My biggest debts, however, go to Helen and Leo. Helen has been my biggest supporter almost from the day that I first met her, and has remained my closest friend through over a decade of being together. She also has a knack of asking deceptively simple questions that cut to the heart of what it is that I am trying to say and make me realise that, whatever it was, I haven’t yet said it clearly enough. I am profoundly fortunate to have met someone who adds so much to my life. Becoming a father while in the midst of finishing a PhD and trying to

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start a career unsurprisingly posed a few challenges, but as he gets older and sassier the joys of seeing Leo develop into his own person never seem to diminish. It would be stretching things to say he has contributed to the writing of this book, but he has certainly made the process a lot more fun. He hasn’t yet reached the point where the intricacies of US economic policy during the Cold War grab his interest, but once he gets past musing over why there hasn’t been a ‘Welsh Revolution’ and whether, in the fullness of time, evolution will once again result in dinosaurs roaming the earth, I’m hopeful that he might one day at least read these acknowledgements and the first few pages of the introduction and concede that, perhaps, his daddy is a bit more than just very silly.

INTRODUCTION

20 January 1961 was a crisp winter’s day in Washington, DC: the air was icy and penetrating, a thick layer of snow covered the ground, and the thousands of people lining the mall huddled closely together in an effort to see off the worst of the cold. In front of them, backed by the magnificent rotunda of the Capitol building, the newly sworn-in president, John F. Kennedy, delivered his inaugural address. One of the most quoted of all inaugurals due to its eloquence and powerful commitments to waging the Cold War more effectively, it also contained within it a firm pledge to the countries of Latin America that the United States would back them in their quest for economic development. The new administration, Kennedy stated, would create a ‘new Alliance for Progress’, one that would ‘assist free men and free governments in casting off the chains of poverty’. At the same time, he continued, the guiding principles of the Monroe Doctrine would be reaffirmed: any attempt by ‘hostile powers’ to undermine the security of the area would be met with a determined response. ‘This Hemisphere’, Kennedy proclaimed, ‘intends to remain the master of its own house.’1 The new president’s stance on Latin America was the culmination of a steady critique of his predecessor’s policies that had been unfolding throughout the 1960 campaign. In October, in a speech that was due to be delivered in Tampa but which was ultimately cancelled, the draft had called on Kennedy to state that while ‘the Cold War will not be won in Latin America – it may well be lost there’.2 Shortly after Kennedy’s election, meanwhile, the New York Times, the leading establishment newspaper, had reaffirmed these views. ‘The sentiment is growing here’,

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a report noted in November 1960, ‘that the United States is approaching its last opportunity to regain the prestige it has lost among the Latins and to return to a position of leadership in the Hemisphere.’3 Perhaps the most damning assessment, though, came in the first debate between Kennedy and his Republican opponent, Vice President Richard Nixon. ‘Can any American looking at the situation in Latin America feel contented with what’s happening today’, Kennedy had asked, ‘when a candidate for the presidency of Brazil feels it necessary to call – not on Washington during the campaign – but on Castro in Havana, in order to pick up the support of the Castro supporters in Brazil?’ Later, after Nixon tried to recover some ground, Kennedy accused the present administration of having ‘ignored Latin America’.4 Just two months after his inauguration, in an attempt to make good on the promises made in the speech, Kennedy announced the Alliance for Progress – a vast, multi-billion-dollar aid programme for Latin America that was intended to galvanise the area’s development and, within ten years, foster modern economic, social and political structures. The western hemisphere, Kennedy vowed, would become the flagship model for the effectiveness of US modernisation policies; in doing so, his administration would see off the Cold War threats that were now seen as engulfing the region. Tellingly, while Latin America was now being presented as a concern with respect to the Cold War, Kennedy’s recommended solution lay firmly within the economic sphere.5 Sitting behind Kennedy on that bitingly cold day was the now former president, Dwight D. Eisenhower. Like all politicians, he recognised the need for his successor to stake out some distance from previous policies. And yet, Eisenhower would have bristled at some of the criticisms regarding his hemispheric approach. Inter-American relations, of course, had undoubtedly worsened since the end of World War II as a combination of heavy-handed US policies – exemplified by the move to oust the leader of Guatemala in 1954 – and a refusal to agree to a more engaged economic policy provoked mounting dissatisfaction. Still, Eisenhower did not believe that this downturn was solely a consequence of misguided policies pursued during his two terms in the White House. True, he would have accepted that inter-American relations had grown far less cordial during his presidency; and true, he would have accepted that certain policies – particularly intervention in Guatemala – had caused much of this disenchantment.6 But he would

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not have accepted the second part of Kennedy’s critique: that his administration’s economic approach toward the region had been fundamentally wrong-headed. Again, he would have concurred that his policies had not been viewed with any great enthusiasm by the Latin Americans. At the same time, however, the outgoing president retained a firm conviction that his administration had been on the right lines when it came to economic policy. Short-term Cold War objectives were important to the administration and needed to be prioritised; long-term success and harmony in the area could only be achieved, though, on the basis of sustainable and enduring development brought about by a model that prioritised the role played by private, not public, capital. It was a stance that had been at the heart of Eisenhower’s economic approach in the area throughout his presidency. By the start of 1961, therefore, the two men held vastly differing views of the correct economic approach to be taken in the region. Eisenhower, whose policy had proven flexible enough to accommodate change in order to address emerging problems, continued to hold that his model, led by private capital, was the only viable way toward sustainable economic progress; Kennedy, fired up by the potential of modernisation theory and the belief that development was achievable in ten years, was on the cusp of launching a more aggressive approach to this issue that would make far greater use of public funds to catalyse the area’s advancement. Both presidents shared a fixation on the primacy of the Cold War; they also shared a view that, in Latin America, the ultimate path to success lay in the field of economic relations. This book is the story of how the two administrations forged their economic policies toward the region, and the reasons why, ultimately, Eisenhower’s model proved to be the more enduring of the two. At the same time, it is a tale of inherent tensions within US policy – as the core goals of strategic security and economic progress pulled against one another and exerted an increasing influence on the US position. *** The narrative that follows is structured around three key questions that demonstrate the importance of examining more closely the economic aspects of US policy toward Latin America in this era. First, why, despite the discontent that it prompted in the region, did the Eisenhower administration prove to be so wedded to its stance on models of

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development led by private capital? Second, what was the relationship between wider Cold War considerations and US economic policy in Latin America – where were the points of accord, where were the points of divergence, and what affect did these tensions have? And third, why did Kennedy’s attempts to steer US policy in a significantly different direction ultimately result in a reversion to an approach strikingly similar to that pursued by Eisenhower? Existing interpretations of Eisenhower’s approach to foreign economic policy have, for the most part, continued to be framed by Burton Kaufman’s landmark study that posited that an initial approach of ‘trade not aid’ soon gave way to ‘trade and aid’ as the Cold War spread beyond Europe and Asia and as mounting concerns about Soviet attempts to court developing nations compelled a change in US thinking.7 Such an argument, however, does not work in the case of policy toward Latin America. Previous studies, while noting the consistency of Eisenhower’s approach during his first five years in office, have seen this as stemming from a policy of neglect given that the US had more urgent concerns elsewhere. This began to change, these works continue, in the late 1950s. Following the events of the Nixon trip and the Cuban Revolution, US policy makers are seen as finally recognising that the region was becoming increasingly unstable and that urgent action was required in the economic field in order to stymie antiAmerican sentiments. New economic initiatives were implemented and, indeed, are often seen as foreshadowing the changes that would take place under Kennedy.8 A closer look at the administration’s economic approach, however, reveals more about their intentions and the constancy of their policy. Some scholars, of course, have identified an economic angle and argued that, rather than fighting Communism, the United States was fixated on quelling Latin American economic nationalism. This argument, though, focuses too heavily on instances of intervention – Guatemala, Cuba and, to a lesser extent, Bolivia – and does not provide enough detail on the hemispheric vision that the administration had when it came to issues of development.9 For the economic policies pursued in the administration’s first term were not driven solely by the need to focus greater attention elsewhere; Eisenhower and his advisers, in fact, had a clear sense that the region’s long-term security depended on it being successfully guided toward modernity, and that this should be done by prioritising the role

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that could be played by private capital and the adoption of US-style capitalism. Clearly, this model was vague and indistinct. It was based more on the abiding faith that the recovery from the Great Depression to the booming economy of the 1950s had fostered a generation of American policy makers than on any detailed examination of how modern capitalist economies could be achieved in Latin America. Their adherence to this approach in Latin America was total during their years in office and it was the defining feature of their economic approach. Aid would only be used in urgent circumstances. At all other times, the focus would be firmly on the role to be played by private capital. Of course, the policy put forward in 1953 was subject to revisions and changes during Eisenhower’s two terms in office. Some modifications, like greater use of funds from international lending institutions, would emerge as a response to funding blockages in certain economic fields; others, such as the consideration of commodity agreements and price stabilisation, would be seen as necessary due to the fact that no amount of wise counsel would succeed if the price of coffee collapsed. And, as with any administration, there were bureaucratic disagreements aplenty, as officials from different departments who hailed from different social, educational and intellectual backgrounds disputed the best way of achieving US goals. But the central guiding belief – that the best and most sustainable way toward Latin American development lay in adopting a close variant of US capitalism – continued to endure. This faith in the utility of US economic policy to foster long-term solutions remained prominent under Kennedy, despite significant changes in the methods used to pursue that objective (and it is this, as we shall see later, that largely explains the reversion to the Eisenhower model when the alliance ran into difficulties). An abiding belief that the US model would succeed, moreover, was crucial in providing the Eisenhower administration in particular with the ammunition to discount Latin American complaints regarding their policy. Between 1945 and 1961, Latin American leaders, diplomats and political organisations consistently called on the United States to launch a Marshall Plan for the region. The geographic proximity of the two areas, they argued, and the endemic nature of poverty and social and economic underdevelopment, demanded a more substantial response. Appeals like these gained little traction in the 1950s, however, as US officials continued to hold that any weakening on this point would rob

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Washington of its leverage when it came to persuading the countries in the area to adopt what they believed to be the appropriate policies. Some changes were implemented in response to Latin American criticisms, but there was never any wavering on the central guiding principle. Even in the Kennedy years this remained generally true. For while the deleterious impact of failing to engage more assiduously with Latin American economic suggestions – coupled with the impact of the Cuban Revolution – provided much of the impetus for the alliance, the shape of the programme was very much one determined in Washington.10 Also vital here were long-standing racial traits, which had always influenced US perceptions of the Latin Americans.11 Paternalism and condescension, of course, had typified US attitudes toward the region since the advent of US independence. This remained true in the Cold War. From George Kennan’s blistering condemnation of the region and its benighted history in 1950, to Lyndon Johnson’s recurrent paternalism and scathing criticisms over a decade later, the documentary record in this era is peppered with racially inflected language and critiques.12 As underdevelopment replaced skin colour as a marker of backwardness, these patterns were further reinforced as the language of development and modernisation became more commonplace in US policy discussions. At the same time, however, there was a more ‘positive’ way in which race influenced US thinking (though here I use the phrase advisedly, and in the sense that it meant that US officials saw the area as better than other areas, rather than in the sense of it being beneficial or particularly enlightened). While undoubtedly viewed as being inferior to white, Anglo-Saxon Americans, the region’s population was nevertheless viewed as being more promising as an economic prospect than that of somewhere like Africa.13 Ultimately, then, these elements combined to create an innate belief among Eisenhower’s advisers that their various economic approaches in the region were the correct ones and would, eventually, lead to success. Their confidence on this front, of course – like Kennedy’s after 1961 – was largely misplaced. As history has unquestionably shown us, the course of Latin American development has been unremittingly complex and far from predictable; the idea that US officials could determine a regional development strategy that would succeed, therefore, was always far-fetched and likely to fail. This would have been true, moreover, if Latin American politics had been static and subject to little change.

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The period between 1950 and 1965, though, was one of significant social and political flux in the region and made US efforts to forge a successful economic strategy almost impossible.14 And yet, clearly, US policy makers felt that singular developmental approaches offered the best chance of success. Indeed, it was not until the mid-1970s that Zbigniew Brzezinski, the national security adviser to Jimmy Carter, recognised the inherent wrong-headedness of such an approach.15 As the book that follows demonstrates, this is of great significance when it comes to understanding US policy toward the area in the Eisenhower and Kennedy years. For it was the sense of certainty that a successful economic policy would safeguard the region that provided the opportunity for the second phase of the book’s focus – the tensions between the strategic imperatives of the Cold War and the nature of Washington’s regional economic vision – to come to the fore. *** Tensions between the two major aspects in US policy were often evident during the period covered by the book. At times, these two aspects were in harmony with one another and served to reinforce the US position; more often, though, there was an inherent tension between economic and strategic goals that proved increasingly problematic. Put simply, what made sense strategically did not always marry with abiding economic beliefs. Largely, existing studies have taken the view that Eisenhower’s policies were focused on the role to be played by private capital, that this was an approach born out of US neglect of the region, and that substantive changes only occurred in the late 1950s when Cold War concerns mounted exponentially.16 Some scholars, however, have countered this and suggested that the administration’s approach was far more fixed and was not simply determined by Cold War considerations.17 Economics feature more heavily in the literature on the Kennedy years, when the alliance was implemented and the road toward economic maturity was accorded greater prominence. Newer studies, focusing on the role played by modernisation theory in determining US policy after 1961, have offered a different interpretation of the approach taken when Kennedy came to office. Like the majority of works on the Eisenhower era, though, these studies tend to view the economic angle solely from the perspective of the Cold War.18

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Consequently, there still is no work that deals more fully with the interrelationship between the strategic and economic aspects of US policy – and, moreover, that looks at the way the pursuit of one hindered the other.19 Undertaking such a study is important, however, for what it tells us about the centrality of economics in US Cold War policy and the effect that this could have on broader strategic objectives. Crucial here is the assumed compatibility that US policy makers believed to exist between Cold War exigencies and deep-rooted economic principles. The Cold War in the Third World, after all, was largely driven by the superpower competition between Washington and Moscow to secure adherence to their economic systems.20 In the 1950s, this process was given an extra edge by two further developments: the waves of decolonisation that swept across Asia after 1945 and Africa after 1957, and the related emergence of a coherent non-aligned movement that sought to be independent of either the United States or the Soviet Union. Policy makers in both the White House and the Kremlin recognised by the mid-1950s that, in a zero-sum game of competing ideologies, expanding their influence in these underdeveloped areas was of increasing importance.21 In such circumstances, US officials could often be intemperate toward neutralist leaders and nations who, they believed, were failing to grasp the severity of the Cold War.22 Nonetheless, the administration also came to recognise that it would need to find a way of working with, rather than against, these powerful movements. ‘The Eisenhower administration’, as Kenneth Osgood has noted, ‘found itself embroiled in an intense political and psychological competition for the loyalties of these newly emerging states’ – a competition in which the administration ‘consistently labelled anti-colonialism and nationalism as greater threats to American influence in the Third World than communism’.23 US officials did worry, to a certain extent, about the spread of neutralism to Latin America. While there was no sign of a Latin American nation joining the non-aligned movement, policy makers in Washington were concerned that inter-American ties could be weakened if neutralism took hold. As early as 1955, an intelligence estimate recognised that if neutralism were allowed to develop unchecked then, at some point, it could lead to the US ‘becoming less able to count on strong UN majorities for positions which it wishes to espouse; the Latin American countries, for example, may take more independent

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positions’.24 Furthermore, it was an issue that continued to trouble US officials. In NSC 5902/1, the administration’s final regional policy document, the necessity of improving inter-American cordiality in an effort to nullify the threat of neutralism was again made clear. ‘A significant drift by Latin America away from its traditional alignment with the United States towards a position of “neutralism”’, the report stated, ‘would profoundly alter the world political balance to the disadvantage of the United States.’25 The solution to this potential problem was, as it was elsewhere, to establish a connection between the US and nationalist aspirations, and the best way of achieving this was through successfully fostering economic development.26 This assumed compatibility between strategic necessities and economic objectives suffused the approaches taken toward Latin America. Both administrations had a clear belief in the idea that progress and security could be pursued simultaneously. They were not wholly wrong in adopting this stance. As we shall see, there were a series of episodes in the 1950s where the United States was able to utilise economic methods to shore up a strategic situation in a way that was consistent with abiding economic principles. This was especially true in Bolivia, where the potentially radical economic direction of a revolutionary government was stymied through economic assistance in a way that, it was hoped, would lead to the embrace of an approach sympathetic to the US model. The same was true, more controversially, in Guatemala. Here, the United States undermined and eventually overthrew the A´rbenz government – a move that, at least in part, was designed to ensure a return to a US style of economic management. Moreover, the Alliance for Progress received widespread acclaim in the region in the period immediately after its launch. Far more often, though, the opposite was true: what made sense in strategic Cold War terms was at odds with the prevailing thrust of the administration’s economic policy. At various points, in fact, the US opted to hold firm on a developmental issue even though they recognised that they could have bolstered their political position by yielding on an economic point of principle. Crucial here was the innate desire of the Latin Americans to pursue their own goals and interests. While many Latin American governments were supportive of the West’s position in the Cold War, they did not see this as their priority at a time when underdevelopment and poverty were rife throughout the region. Nor, as

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the difficulties encountered by the Kennedy administration amply demonstrated, could this tension be resolved simply by committing to more extravagant aid programmes.27 In the Eisenhower years, the administration’s unwillingness to depart from its firm economic beliefs imposed a constant tension upon their regional strategy – not always, as noted above, but often enough to ensure that the situation was getting worse rather than better. As Latin American injunctions against US policies became recurrent and more forceful, the steadfastness of the administration’s economic stance eroded inter-American comity. But, if this was true for Eisenhower, it was even more evident under Kennedy as the Alliance for Progress began to implode as a result of what Michael Latham has termed ‘the tension between containment and development’.28 By pledging to help shape modern economic structures in the region within the space of a decade, Kennedy’s approach actually exacerbated this tension in US policy and compelled the need for a further reappraisal less than three years after the alliance was launched. As this book will make clear, inter-American economic relations only reached such a point of crisis once Kennedy took office. Under Eisenhower they had been fractious, undoubtedly, yet remained cooperative. The tensions within US policy were making the situation worse, but the changes implemented by Eisenhower and his advisers had proved sufficient, for the time being, to ease mounting problems. Kennedy’s approach, however, brought things to a head as, if the alliance did not prove an immediate success, many of the ties holding inter-American relations together would be under even greater stress than they had been before. In the short term it succeeded in bolstering hemispheric accord and improving Washington’s strategic position; in the mid- to long term, however, this was soon undermined as the economic realities became clear and tensions began to increase. *** As the alliance’s early promise began to fade and then erode more rapidly in 1962 and 1963, the answer to the third key question – why Kennedy’s approach resulted in a reversion to Eisenhower’s policy within just a few years – can be identified. Announcing the alliance and setting out a vision to modernise Latin America in ten years was one thing; creating the necessary bureaucratic infrastructures and securing the

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funds from Congress was quite another. Moreover, it soon became clear that prompting the Latin Americans to fully cooperate – by tackling existing economic problems and producing country-specific development plans – would be far from straightforward. Perhaps the most important reason for the inability of the alliance to get off the ground, however, was that it was always far more of a political gesture than an economic one. It was intended as a tool to help shore the area up with respect to the Cold War, and made far too many assumptions about economic relations. Indeed, as Thomas Field has argued with respect to Bolivia, strategic outcomes were integral to the alliance right from the off. ‘The closer historians study President Kennedy’s foreign policy in individual countries’, he writes, ‘the more heavy-handed it appears. From its very inception, political goals drove the Alliance for Progress, and the administration’s fierce ideological bent served merely to exaggerate and radicalize the level to which Washington intervened.’29 To put this another way, the alliance’s focus on meeting strategic goals, combined with the overwhelming difficulty of implementing its economic mechanisms in an area where theories of modernisation were not overly applicable, ensured that it would not be long before the initial impetus wore off and searching questions started to be asked about the new developmental approach. In pursuing their belief that, of all the underdeveloped areas, Latin America was most suited to demonstrating the effectiveness of their new, modernisation-driven approach, the Kennedy administration removed a central part of their predecessor’s policies that, in retrospect, had proved to be an unrecognised success. In its steadfast refusal to alter its central economic tenet – that largescale financial assistance was no way to foster sustainable development – the Eisenhower administration had ensured that there was as a constant point of negotiation between themselves and the Latin Americans. Well aware that the Soviets lacked anything like the requisite financial resources to offer any viable developmental funding to the countries of the area, Eisenhower’s policies had in fact succeeded in ensuring that, despite widespread disagreements, there was enough common ground to guarantee future cooperation. Castro’s revolution complicated this, without question, but not to the extent that made it unviable. Once the alliance ran into serious difficulties, therefore – by its first anniversary, in March 1962, it was coming under sustained fire both at home and in Latin America – pressure began to mount from within the

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Kennedy administration for greater emphasis to be placed on the role that private capital should play in shaping the region’s development. Some advisers, particularly those most ideologically wedded to principles of modernisation, denounced such a move as regressive and marking a retreat to Eisenhower-era policies. But as the strategic situation in the region seemed to be worsening, and as any progress in shaping economic advancement via the alliance seemed limited at best, there was a chorus of voices calling for an increase in the role that private capital might play in channelling the necessary funds to the area. These suggestions, coming at a time when cutbacks in US economic strength and the foreign-aid budget were really starting to bite, combined with Kennedy’s declining faith in the role that modernisation-style policies could play in the region to make the president far more amenable to emphasising private, rather than public, capital. When asked about his view of the alliance in August 1963, Kennedy noted that he was continually ‘depressed’ by the problems the United States faced in Latin America. A greater effort was needed, Kennedy suggested, but his tone was far from hopeful: ‘So I say on the second anniversary, we have a long, long way to go, and in fact in some ways the road seems longer than it was when the journey started. But I think we ought to keep at it.’30 Two further points warrant a brief mention here. First, this revised assessment of the two administrations’ economic policies does not, in any way, amount to a celebration of Eisenhower’s policy. His approach to shaping the region’s development might have proved more enduring than Kennedy’s, but his administration still enacted numerous policies that wrought significant levels of misery on the people of Latin America. Whether by supporting the overthrow of A´rbenz in Guatemala, or backing authoritarian leaders that adopted a pro-US stance, Eisenhower’s approach was as damaging as that pursued by other US leaders during the Cold War.31 Where Eisenhower’s approach was more successful than Kennedy’s, then, was in his administration’s capacity to contain Latin American economic and populist aspirations in a more effective way than their successors did.32 Second is the issue of what a successful economic strategy in Latin America in the years covered by this book might have looked like. In 1961, Kennedy’s withering assessments of Eisenhower’s approach struck a chord with many observers of the region and, with the simultaneous rise of modernisation theory, prompted a consensus that large levels of aid could dramatically improve the existing situation.

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Development could, as Robert Packenham argues, lead to ‘good things’: ‘democracy, peace, non-Communist governments, good will, international understanding’.33 Development and modernisation fell out of vogue in the late 1960s, however, as their more negative consequences became more apparent. With the passage of time, and after further demonstrations of both the enduring nature of development and its limitations in more recent conflicts, scholars have begun to question the wisdom of development aid and to consider afresh what an enlightened approach to foreign economic policy looks like.34 In 1961, Eisenhower’s policy looked like a failure and Kennedy’s policy, at least at first, looked like an enlightened solution. The course of Latin America’s emergence as a modern capitalist area since then, however, suggests that Eisenhower’s policy was not, perhaps, so wrong after all. It was far from perfect, but given how complex and irregular Latin American development has been it does give pause for consideration.35 These three arguments – that the Eisenhower administration remained firmly committed to its long-range development strategy in Latin America until it left office, that endemic tensions between economic and strategic considerations in the area increasingly bedevilled the Eisenhower and Kennedy administrations, and that Eisenhower’s economic policy proved to be more enduring than Kennedy’s – thus form the heart of the book that follows and are pursued across six chapters. The bulk of the book, Chapters 1 to 5, examines the evolution of the Eisenhower administration’s economic policies in the region; the final chapter, meanwhile, looks at the impact that Kennedy’s launching of the alliance had on the endemic tension within US economic strategy in the area. *** For a long time, Latin America was only considered in passing when it came to assessing US policies in the years prior to Kennedy’s death. The flashpoints – Guatemala and Cuba – were studied in great depth, but too little work was undertaken on the broader regional strategies that made up the hemispheric approaches pursued in an era when the Cold War reached its mature phase and began to branch out into the Third World. This was especially true with respect to economics, a field that, relatively speaking, remains underexamined in the years after 1945. The reason for this, as David Engerman notes, is that ‘economic issues

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unfolded slowly, only rarely becoming the sort of critical flashpoint that is the stuff of Cold War historiography’.36 Yet crisis was not the norm during the Cold War; understanding US policy requires us to look more closely at less climactic occurrences.37 Economic relations and the formulation of economic strategy are thus of great consequence when it comes to understanding the course of America’s Cold War. Furthermore, this is especially true in an area like Latin America where Soviet influence was so limited. Here, unlike other areas of the Third World, US policy would fixate on ensuring the region’s long-term security in a situation absent any immediate Communist threat. Economic progress would lead to stronger political institutions, a gradual move toward democracy, higher wages and better infrastructure, and in time create a Latin American middle class who would implement the sort of political processes that sat neatly alongside US objectives in the Cold War. If the region could be guided toward economic prosperity, it would remain squarely within Washington’s sphere of influence and any longer-term Communist threat would be nullified. It was the sort of approach that US policy makers were eager to implement in other areas of the world – particularly Europe and Asia – at times when stability seemed to be at hand. Consequently, the argument outlined here demonstrates the continuing validity of US-centric studies with respect to the Cold War. Local studies, featuring voices that were previously underrepresented, can tell us much about the course of international relations. In the case of Latin America, moreover, studies drawing on multinational archival bases have illustrated the crucial role that shifting political, economic and social trends played in the course of inter-American relations in the years after 1945, with some scholars even talking about an inter-American Cold War taking root that was of a markedly different hue to that in evidence elsewhere.38 Officials in Washington, though, continued to perceive the Cold War as the stand-off between themselves and the Soviets, and further understanding the role that foreign economic policy played in that process is of significant importance. In the case of Latin America, as demonstrated in this book, it helps us to understand why the US pursued such an unpopular policy for so long and to identify the abiding faith that American leaders had in the capacity of liberal

INTRODUCTION

15

economics to shape a safer and more prosperous world. Ideologically committed both to this and to the waging of the Cold War, US officials proved unable to adequately perceive, or resolve, the tensions apparent in these policies in Latin America. Most importantly, it illustrates why, when Kennedy stood before the American people on that freezing Washington morning and pledged a more engaged policy toward the hemisphere, it marked a worsening, rather than an improvement, in inter-American relations.

CHAPTER 1 FORGING A GRAND STRATEGY

NSC 144/1 and the Eisenhower administration’s new regional policy ‘President Eisenhower’s interest in Latin America began when he was a student in high school’, wrote his brother Milton in his memoirs. ‘While I, nine years younger than he, was absorbed in Horatio Alger and Motor Boy books, he was reading, for sheer pleasure, every history available in our home and the Carnegie Library of Abilene. A few dealt with the Americas, and he became fascinated’.1 During the course of his pre-presidential career, however, his postings and commissions had not – aside from one brief spell in Panama – afforded Eisenhower any significant opportunity to immerse himself in the region. Despite his purported affinity for Latin America, therefore, the newly inaugurated president had little practical experience of the region as he entered the White House. Like many elite figures of his time, he leaned eastward, toward Europe, rather than west or south. His policies toward the area would be characterised by cool pragmatism as opposed to any sense of misty-eyed romanticism.2 Born in Texas in 1890, but raised in the small town of Abilene, Kansas, Dwight D. Eisenhower grew up in an age when the United States’ role in the world was undergoing a profound change. As America emerged as an international power at the dawn of the twentieth century, the belief that many Americans had in the providential nature of their nation increased significantly. The precise nature of America’s role in the world was a topic of serious debate, but the view that the US was now a

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17

fully fledged international power was not.3 A product of the lessons derived from life in small-town America and the shifting parameters of the nature of America’s international role, Eisenhower’s education and early career hardly marked him out as someone destined for the presidency. High school had been negotiated easily enough, but life as a cadet at West Point nearly proved his undoing as a tendency for pranks, poker and tobacco saw him constantly running into trouble with his commanding officers. Eventually, he made it through to the other side, joined the Army proper, and ascended the ranks. Through a mixture of hard work and no little fortune, he made his name and his reputation during World War II as the commander of Allied forces in Europe as the war neared its end. Eisenhower became the public face of the Allied assault against mainland Europe following D-Day. Victory in Europe gave Eisenhower a major public profile and reputation as a war hero.4 When he returned to the United States, therefore, it was little surprise that he was courted so vigorously by both political parties, who recognised that this sweeping popularity could be translated into an unassailable number of votes. Initially, he was far from keen. By 1952, however, concerned about the direction of American foreign policy and the nation’s trajectory, he was persuaded that the time was now right and agreed to stand as the Republican candidate.5 John Foster Dulles, the man Eisenhower asked to craft his foreignpolicy position in the election and on whom, eventually, he would settle as his Secretary of State, had a very different route to high office. Born two years before Ike and raised in upstate New York, Dulles had seemingly been destined to be Secretary of State from childhood. Though his father was a Presbyterian minister, his grandfather and his uncle both served as Secretary of State, and Foster was subjected to a rich education in the art of international diplomacy. A highly successful legal career working for Cromwell and Sullivan had been punctuated, at various times, by his being part of the US delegation to the Versailles Peace Conference; becoming a leading voice on American internationalism in the years before World War II; and, during the war, leading the Federal Council of Churches Commission on a Just and Durable Peace. After the war he gave up his legal career, advised Republican candidate Thomas Dewey in the 1944 and 1948 elections, served briefly in Congress, worked as a consultant for Harry Truman’s administration, and helped to draft the peace treaty with Japan that was signed in 1951.

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By 1952, in spite of this trajectory, it was beginning to look as if Dulles would never achieve his destiny.6 Along with Eisenhower, though, he would form an effective partnership that oversaw US foreign policy for most of the 1950s.7 Never close friends, but respectful of one another’s abilities, the two men set out to wage the Cold War more effectively, and more efficiently, than had hitherto been the case. In the campaign against Democrat candidate Adlai Stevenson, Dulles’s foreign-policy statements had lambasted the incumbent administration for swinging ‘erratically from timid appeasement to reckless bluster’ and pledging that ‘our nation will become again the dynamic, moral and spiritual force which was the despair of despots and the hope of the oppressed’.8 And yet, despite the grandiose promises to roll back the Iron Curtain, Eisenhower’s foreign policy would not depart that radically from what had gone before. NSC 162/2, which formed the heart of what became known as the New Look, was finalised in the administration’s first ten months in office; its aims were to present a less apocalyptic vision of the Cold War, to construct a new approach based around massive nuclear retaliation and fiscal responsibility, and to make more prominent the importance of psychological warfare and covert action in achieving US objectives. Nevertheless, as George Herring has argued, this was essentially Containment Mark II: ‘It sustained the principles of containment while altering the methods used.’9 While the New Look came to define the administration’s approach in most areas of the world, its applicability to Latin America was more limited.10 Doctrines of massive retaliation did not apply to the situations that the administration faced in the region; the threat posed by the Soviet Union, meanwhile, remained negligible. Covert operations and psychological warfare would both feature, but – apart from Guatemala – these were of a different order to similar policies pursued elsewhere in the global South. Indeed, the administration would see much that they agreed with in the policies they inherited from their predecessor. The Truman administration’s initial positions toward Latin America after 1945, through a series of political and military pacts, had served to shore it up against any potential Soviet or Communist incursion. Eisenhower and Dulles would see little need for change in these aspects of policy. Where they did differ, however, was in the economic field. When they looked at the state of inter-American relations, the Eisenhower

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administration believed that their predecessor had not done enough to put US policy toward the region on a sound economic footing. True, they had strongly rejected calls for a hemispheric Marshall Plan. But the new administration did not believe that Truman had been firm enough when it came to loans and economic aid; this was particularly true in terms of balance-of-payments assistance and help in combating the problems of high inflation. With such trends unlikely to be curtailed unless corrective measures were implemented, one of the administration’s key objectives would be to try and reshape the nature of inter-American economic relations. Underdevelopment, not Soviet machinations, was the main problem confronting them – and the answer, Eisenhower and Dulles felt certain, lay in encouraging Latin American leaders to adopt what the United States believed to be more appropriate forms of economic management. Accordingly, they would swiftly set out a new policy document for the region that reaffirmed the strategic aspects of Truman’s policy but sought to offer a far firmer stance on economic matters. NSC 144/1, finalised in March 1953, stressed that aid and assistance would be curtailed in all but the most urgent of circumstances; much greater encouragement would be given to persuade the Latin American nations to be more open to the potential of private capital; and, in the short term, a series of public-relations efforts would be initiated to foster a climate of greater cooperation. Moreover, the central principles that underpinned this – the desire to limit the extent to which foreign aid was used to drive economic advancement, the belief that development was both desirable and sustainable, and the willingness to utilise state guidance or financing in areas where immediate action was required – were consistent with the principles set out in the New Look. *** The immediate catalyst for the process that led to the formation of a new national security strategy was the death of Soviet leader Josef Stalin, just six weeks after Eisenhower was sworn in. After several weeks of indecision, the administration eventually determined a response in the form of a presidential speech intended to put diplomatic pressure on Moscow. By this point, however, they were playing catch-up: some weeks before, the new Soviet leadership had stolen the initiative by calling for peaceful co-existence with the West and setting the Kremlin’s

20

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foreign policy in a new direction.11 The lack of certainty as to what the United States should do in response to Stalin’s death persuaded Eisenhower and Dulles that a reappraisal of national security policy was needed. Operation Solarium, an intensive bureaucratic process, was subsequently launched and tasked with redefining US objectives and the methods that would be used to achieve them. Though the main focus was understandably on how they would wage the Cold War more effectively, this period also saw the notion of development becoming more important in US strategy, which would come to have significance with respect to Latin America.12 Eisenhower had referenced the importance of development in his inaugural address, noting that the ‘impoverishment of any single people in the world means danger to the well-being of all other peoples’.13 At a subsequent meeting of his National Security Council (NSC), the president even mused on the possibility of the US being at the vanguard of an effort to solve global underdevelopment.14 ‘It may be possible to secure’, Eisenhower suggested at a meeting on 11 February, ‘the money and resources necessary to enable the world to reach a decent economic position.’ He was quickly cautioned against such a move, however, by his fiscally conservative Treasury Secretary, George Humphrey, who stated ‘very emphatically’ that ‘from now on this Government must pay its way, and that all major policy recommendations should be accompanied by an estimate of how much it will cost to execute them’.15 Despite Humphrey’s attempt to dissuade the president, the issue arose again in the debates that took place after Stalin’s death. At an NSC meeting on 11 March, Eisenhower intervened in a spat between Foster Dulles and his adviser for psychological warfare, C.D. Jackson, over whether the administration should seek to provoke discord in the Soviet bloc, to note that he had received some correspondence recommending that the US should focus on its ‘determination to raise the general standard of living throughout the world’. ‘We do need something dramatic’, the president went on, ‘to rally the peoples of the world around some idea, some hope, of a better future.’ Any response to Stalin’s death – which looked likely to be a presidential speech – should emphasise this idea and focus on ‘the common man’s yearning for food, shelter, and a decent standard of living’.16 The Chance for Peace address – the speech that served as the administration’s response – thus contained within it a clear sign that

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21

combating underdevelopment would be a part of the new administration’s policy. Brokering peace between East and West, Eisenhower told the Society of Newspaper Editors, would provide the opportunity to ‘declare war’ not ‘upon any human enemy but upon the brute forces of poverty and need’.17 As the process of forging the New Look gathered pace across the summer and autumn of 1953, however, it was clear that the administration had a very particular view on how development might be pursued: it was to be supported, but it would have to be cost-efficient. In an NSC meeting on 30 July, George Humphrey reaffirmed this central point, stating that ‘assistance to other countries should be on the decline in the near future’.18 The final meetings to conclude what would become NSC 162/2 reaffirmed this stance, agreeing that a limitation ‘would be placed on further economic grant aid and loans “based on the best interests of the United States”’. The position on foreign aid would be flexible if the provision of financial assistance was deemed to be strategically vital; but, if the situation in an area was relatively stable, the model of development led by private financing and the markets would be to the fore.19 The final version of NSC 162/2, while recognising the importance of developing countries by noting that their evolution ‘into more stable and responsible nations, able and willing to participate in the defense of the free world, can increasingly add to its strength’, did not foresee sustained financial interventions by the US to achieve this. Economic efforts to improve relations between the US and the developing world, Clause 12(d) of the document stated, would take place in an environment where ‘it should be possible in the near future to eliminate most grant economic aid, if coupled with appropriate US economic and trade policies’.20 Development was clearly recognised as being of great importance, therefore, but it should be pursued in a manner that was in keeping with the views of the administration’s leading figures. Here, Eisenhower’s views were crucial. His economic views lay somewhere between New Deal liberalism and faith in the individual and the markets so redolent of conservatism. To put it another way, Eisenhower believed that to successfully manage economic progress – whether at home or abroad – required a prudent combination of limited state action and the transformative effects of the free market.21 It was a stance exemplified, in 1956, by his passing of the Interstate Highway Act, which used the

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financial and legislative power of the federal government to galvanise the creation of a national network of highways.22 He subsequently outlined his stance more clearly in his memoirs. ‘Our economic strength had developed, historically, freely and without artificial and arbitrary governmental controls’, he wrote. ‘In times of national emergency . . . controls had a role to play, but our whole system was based on the assumption that controls were not the answer.’23 It was an approach that, in the coming years, would perfectly define his administration’s policies in Latin America. *** When US officials looked at the world in 1953 they were confronted by a range of problems. In Europe, simmering tensions with allies and enemies alike had prompted a situation that, while stable, was far from ideal; relations with the Soviets, especially in the wake of Stalin’s death, were proving unpredictable; in the Middle East, meanwhile, difficulties were apparent in Egypt and Iran; and, in Asia, relations with the Chinese were increasingly troublesome while the looming French collapse in Indochina was about to compel the United States to assume the burden of opposing Ho Chi Minh’s Communist nationalist forces. Latin America, while far from placid, seemed to offer much more in the way of opportunity for US officials eager to bolster Washington’s position in the Cold War. With Moscow posing no real threat, and with Communism only a minor political movement, the area seemed to be ripe for success. This was particularly true in the economic sphere. Whereas in other areas of the world any attempts to forge tighter economic relations would have to start from rather limited beginnings, there were already substantial intra-hemispheric financial links in place by 1953. These were outlined in a speech in Columbus, Ohio in late 1953 by John Moors Cabot – the administration’s first assistant secretary of state for Inter-American affairs, who later fell out of favour with Dulles after pushing too hard for a change in policy and was reassigned to the embassy in Stockholm. ‘Our $7 billion of trade with our sister republics is greater than our commercial trade with Europe or any other part of the world’, Cabot noted. ‘Our $6 billion of investments in Latin America surpass those in any other single area except Canada.’24 The region also provided significant levels of income for US firms. In 1952, a Department of Commerce report noted, the earnings of US

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23

firms in the area had risen to $888 million from $616 million two years earlier.25 And with Latin American economic performance on the rise, it was clear to US officials that this was an area where economic factors could be of great utility. Poverty, overreliance on single products such as coffee, high inflation, chronic balance-of-payment problems – all were endemic and all were a concern to US policy makers. Nevertheless, these pre-existing links bolstered the belief that economic progress could be achieved in the area.26 Hence there was a firm sense that Latin America provided a real opportunity and was, as such, of significant importance to the new administration. The stakes on the developmental front were thus high, as Eisenhower and his advisers were certain that the region’s future rested on its capacity to be guided toward economic modernity. As a result, and as Eisenhower explained in his memoirs, achieving this was vital no matter the cost: We all realized that the fundamental problems of Latin America – which stem from lack of capital; overdependence on the sale of primary commodities; severe maldistribution of wealth; illiteracy; and poverty – would take a long time for the nations themselves to correct even with all the outside help they deserved. No matter how much help we extended – and United States aid to Latin America increased markedly during the 1950s – we realized that we were going to run into difficulties in our relations with individual states before the day came when the major causes of those difficulties could be erased.27 If economics seemed to provide the solution to ensuring the region’s future, however, US officials also clearly recognised the area’s strategic importance and were not afraid of using hyperbole in an effort to gain broader support for their approach. Foster Dulles had highlighted its place in his wider world view in a high-profile essay, ‘A Policy of Boldness’, published in Life in 1952. If the United States did not face up to its global responsibilities, Dulles warned, this would give ‘100% cooperation to the Soviet Communist effort to encircle and isolate us, as a preliminary to a final assault. Once Asia, Europe, Africa, and probably South America were consolidated against us, our plight would be desperate.’28 Similarly, in his confirmation hearings before the Senate in

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early 1953, Dulles informed the Foreign Relations Committee that ‘conditions in Latin America are somewhat comparable to conditions as they were in China in the mid-thirties when the Communist movement was getting started’.29 More specifically, the annex to NSC 144/1 – the administration’s first regional policy statement, which will be discussed in more detail below – highlighted the fact that in ‘a global war, the security of the Western Hemisphere and US access to all of its resources and manpower would be essential’.30 Under President Truman, the creation of the United Nations, the Rio Pact and the Act of Bogota´, while all not without their controversies, had created a system of political and military allegiance in the Americas that, for US officials, seemed to tie the region firmly to Washington.31 The most recent intelligence, moreover, made it clear that there was little prospect of the Soviets gaining a foothold any time soon. ‘The Communists will not be able to establish a Communist government anywhere in Latin America’, the CIA reported in late 1952, ‘either by constitutional process or by revolution’.32 In forging a regional policy, therefore, the administration saw economic relations as a vital part of their hemispheric strategy. Close political and military relations were, to a large extent, taken for granted; if stronger economic links could be forged, too, then the US position in the wider Cold War would be strengthened immeasurably. This would be to the fore as the administration pieced together NSC 144/1 just weeks after coming to office. *** On 18 February 1953, Eisenhower’s National Security Council convened to discuss a number of broad policy issues relating to basic national security, disarmament, Iran, and the United Nations. First on the agenda, however, was an intelligence briefing on Latin America by the director of the CIA, Allen Dulles. As he had in the Army, Eisenhower viewed good staff work as being a vital part of effective decision making, and his NSC structure would reflect that by providing a forum for extensive discussions and the production of reams of related paperwork that also resulted in the administration’s foreign-policy processes becoming rather ponderous.33 DCI Dulles, as he often did, focused on the problems facing the United States in his NSC briefing that February morning. The general

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25

situation, Dulles informed them, was ‘deteriorating not only in terms of cordiality of relationships with the US but in the economic and political spheres of most of the Latin American states’. Furthermore, he continued, the region was proving to be susceptible to four major trends: ‘economic nationalism, regionalism, neutralism, and increasing Communist influence’. All were of concern, Dulles went on, but there was no pressing cause for alarm. Even in the most problematic case – that of Guatemala, which Dulles described as marking ‘an approaching crisis’ – there was no recommendation for immediate action.34 As the meeting dispersed, work began on forging a new regional policy document among the mid-level national security staff. Within a few weeks, a draft was ready to be discussed by the principals. Also produced at this time was a detailed annex, which set out the region’s importance, identified some of the key trends and difficulties affecting inter-American relations by 1953, and gave a sharper illustration of how US officials saw the area. Broadly speaking, the report noted, there were three entrenched problems which adversely affect our relations with Latin America: (1) A widespread tendency toward immediate political change which produces instability, weakness, and demagoguery; (2) a great disparity in wealth and power between the United States and Latin America which, aided by old prejudices, keeps alive anti-Americanism and stimulates economic nationalism; and (3) communism. Social progress in the region was seen as being slow, while an absent middle class, flawed political leadership and a lack of readiness among the wider populace to play a political part were all seen as major causes of instability. A further problem, the report continued, was that the region had emerged in a very different manner to the US and that this was blighting its advancement. Independence in the nineteenth century had not been accompanied by major social, economic and political upheaval as had been the case in the United States; this had resulted in the Latin American nations’ retaining too many traits of the former colonial powers – Spain and Portugal – who, themselves, had not advanced beyond the ‘level reached’ in ‘medieval times’. Subsequent exposure to the sort of progress evident in America had thus led to increased ‘unrest’.35

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These trends, the report went on, had been exacerbated by an unwillingness among the Latin Americans to accept that their own problems were the reason they remained underdeveloped. Allegations of US colonialism, it explained, had been used to elide the ‘rationalization of their own political, economic and social limitations’. This, unsurprisingly, reinforced the prevailing view among observers in Washington that development was the answer and would have to be shaped by the United States. Ultimately, the annex called for a policy of cooperation – as opposed to the other suggestions of compulsion and detachment – that would be focused on creating a ‘hemispheric community, each nation contributing to the whole to the best of its ability’ in a manner that would adhere to US short- and long-term goals.36 Its firmest recommendations, though, were in the economic sphere. ‘The area as a whole’, it noted, ‘is economically underdeveloped and inadequately equipped to cope with its problems.’ Increased productivity, economic diversification, internal financial stability – all were desperately needed and the state of inter-American relations would be ‘greatly affected by the role’ the US played ‘in helping Latin America to solve these problems’. Long-standing financial principles, however, would not be rejected: development was still believed to be ‘primarily the responsibility of the governments and peoples’ and should be encouraged by the ‘stimulus provided by foreign capital and technical skill’. The administration’s objective, therefore, was to ‘facilitate the supporting role of US capital in developing Latin American economies’ whilst also recognising that some ‘governmental assistance’ would be necessary in ‘areas where it is unrealistic to expect the necessary job to be done by domestic financial resources supplemented with foreign private capital’.37 Unsurprisingly, these same sentiments informed the draft document that the NSC met to discuss on 18 March. Most of the meeting was given over to discussing the economic aspects of the proposed policy. Harold Stassen, head of the Foreign Operations Administration and a figure who would often clash with other advisers in an effort to secure greater bureaucratic importance for his own role, began by suggesting that the Latin American nations needed to be offered greater encouragement to implement sound business practices. Noting that he was generally happy with the report, Stassen argued that

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27

it failed to take into account with sufficient force one point that he felt to be of very great importance. It did not reflect the need for Latin American capitalists and business men to provide better treatment for their workers and to take a more progressive and responsible role in the development of the economies of their countries. Treasury Secretary George Humphrey supported Stassen with his own recommendation. ‘If we could find a few first-rate business men and send them as our ambassadors to the key Latin American nations’, Humphrey said, ‘it would do far more good than any amount of money we could dole out.’ The most telling part of the discussion, arguably, was with respect to a pending $300 million Export-Import (EXIM) Bank loan to Brazil. Ultimately, as we shall see in the following chapter, the administration was compelled to pay the full amount. The debates that took place over the issue, however, were a clear sign of the direction that the administration’s economic policy was heading in. Humphrey, indeed, cited it as a prime example of the problems that persisted in US economic policy and stressed the view that similar requests had to be forestalled. Following a word of support from Under Secretary of State Walter Bedell Smith, Humphrey noted, ‘this sort of transaction obviously needed to be much more carefully policed by this Government . . . these matters had very serious implications . . . and would be necessary for us to cut off in the near future’.38 The final version of NSC 144/1, agreed at the end of the meeting, brought all of this together. Tellingly, it began with an exposition on the importance of development: There is a large trend in Latin America toward nationalist regimes maintained in large part by appeals to the masses of the population. There is an increasing popular demand for immediate improvement in the low living standards of the masses, with the result that most Latin American governments are under intense domestic political pressures to increase production and to diversify their economies. A realistic and constructive approach to this need which recognizes the importance of bettering conditions for the general population, is essential to arrest the drift in the area toward radical and nationalistic regimes.39

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Here, then, was the clearest definition of the Eisenhower administration’s answer to the question of how to safeguard the region’s longterm security. To be sure, the document also contained guidance on how the military situation could be shored up in the area, and outlined the region’s position in the wider Cold War framework. Concerns in Washington that Latin American leaders did not take seriously the nature of the global struggle against Moscow suffused the document.40 Nevertheless it was clear that implementing a successful economic policy was believed to provide the most secure road to long-term stability. As NSC 144/1 went on to note, The United States should seek to assist in the economic development of Latin America by . . . [e]ncouraging Latin American governments to recognize that the bulk of the capital required for their economic development can best be supplied by private enterprise and that their own self-interests require the creation of a climate which will attract private investment . . . [c]ontinuing the present level of International Bank loans and Export-Import Bank loans and, where appropriate, accelerating and increasing them, as a necessary supplement to foreign private investment . . . [u]ndertaking a thorough study of the means by which we can assist Latin American capital to play a more vigorous and responsible role in economic development of the area. Finally, and in clear reference to the Brazilian case, the document strongly advocated that the United States ‘encourage the institution of necessary Latin American government fiscal, budgetary and other measures which are indispensable to economic progress in the area through utilisation of the International Monetary Fund, the International Bank, the ExportImport Bank, and other appropriate means’.41 *** Though it was prepared in some haste, the finalisation of NSC 144/1 nevertheless marked an important moment; for in its prioritising of success in the economic field, the document set up the central tension that would come to define US policy in the area between 1953 and 1963. Wholly persuaded of the importance of Latin America’s strategic position, and equally convinced that US-style development provided the

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best answer to the question of how to ensure the region’s long-term future, the administration had committed itself to the idea that these two approaches were fundamentally important and compatible. It was a stance exemplified by an internal State Department report, which argued that ‘if we maintain that Latin America is vital to us in the free world struggle against the Soviet bloc, we must also recognize that [the] vitality of Latin America is proportionate to its economic and political strength’. ‘Fortunately’, the report continued, ‘they have a driving urge toward economic development’ with ‘which we can cooperate to achieve our common ends’.42 How, though, should this new policy be implemented? On the strategic front, the suggested course of action was fairly clear: Truman’s policies of binding political and military alliances would be extended, and Washington would commit itself to supporting regimes that were equally strident in their pro-Americanism and anti-leftism.43 Economically, though, there was a need for a change if the problems evident under Truman – chiefly a tendency to sanction too much in the way of aid – were to be rectified. In July, Eisenhower outlined his thinking on this front to his Cabinet and stated the need for developing quickly an effective policy to replace one which he characterized as: ‘we put a coin in the tin cup and yet we know the tin cup is still going to be there tomorrow’ . . . [and] stressed the need for getting Latin American countries to search out private capital.44 But despite the clarity of the administration’s objectives on this front, implementing the necessary changes could not happen immediately. Before too much progress could be made, in fact, there was a need to prepare the ground in public relations terms for a shift in the US approach. As was the case elsewhere, the administration believed that an effective propaganda strategy could help to achieve this.45 This propaganda effort would be accompanied by an attempt to instil a sense of equivalence onto inter-hemispheric relations, whereby smaller nations would be treated identically to larger ones. Examples of these efforts had been evident in 1952. In October 1952, the then candidate Eisenhower had set out his views on hemispheric relations in a letter to a member of the Latin American Chamber of

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Commerce. ‘It must be the common aim of all of us’, he wrote, ‘to strengthen and develop still further the bonds of friendship and mutual esteem which make possible our cooperative effort for peace and prosperity . . . I am confident that there will be in future years’, he went on, ‘a continued development of the economic cooperation which contributes so greatly to the prosperity of all our nations.’46 Richard Nixon adopted a similar line during a post-election visit to Mexico City. ‘One of the major objectives of the new administration in the United States’, Nixon told the Mexican Congress, ‘will be to develop the most friendly relationships between the United States and Mexico and other American republics.’47 More sustained efforts on this front, though, began soon after NSC 144/1 was finalised. John Foster Dulles provided the first attempt, with an address to the Organization of American States (OAS) in March that the New York Times called the ‘first official step toward what the Eisenhower administration hopes will be the restoration of a firm and effective relationship between the United States and Latin America’ and an attempt at ‘assuring the American republics that they need no longer feel neglected’.48 Three weeks later, on Pan-American Day, the administration upped the stakes as the president spoke to the OAS and told them, Ours is an historic and meaningful unity. It is triumphant testimony . . . that peace and trust and fellowship can rule the conduct of all nations . . . I know that these facts, these simple ideals, are not new. But they are given a new, sharp meaning, by the nature of the tension tormenting our whole world . . . I do not think it unjust to claim for the government and the people of the United States a readiness, rarely matched in history, to help other nations improve their living standards and guard their security . . . In terms of economic policy, Eisenhower was relatively coy – merely mentioning, almost as an aside, that ‘private investment has been the major stimulus for economic development in this hemisphere’ – and had not gone beyond the vague, if sweeping, nod of support above.49 But, in public relations terms, the speech was hailed as a great success. Prominent Republican Nelson Rockefeller, who continued to hold a keen interest in Latin America, was fulsome in his praise. ‘You did a great service for Pan-American Union with the speech you did for the president’, Rockefeller told Eisenhower’s speech writer Emmett Hughes.

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‘It was the best any of us could remember.’50 A progress report on NSC 144/1, meanwhile, made a similar point – acclaiming the president’s speech as ‘the outstanding instance during the period of sympathetic attention to Latin American representatives’ that ‘may have considerable appeal to Latin American sensibilities’.51 Later in the year, after the president’s brother Milton had been sent on a fact-finding tour of the area, a great effort was made to extract every last ounce of public relations benefit from the trip.52 After reading his brother’s subsequent report, the president wrote to him and explained that he felt strongly that ‘it should not be tucked away’ in some planning group; instead, Eisenhower went on, ‘it might be wise to get it published in full (I think there are a few points where there would have to be deletions in order to save the feelings of our South American friends)’.53 Foster Dulles agreed. Publicising the report heavily, Dulles wrote to the president, would both convey US interest in the area and provide Milton with ‘further prestige in the public mind as an authority with penetrating understanding in the field’, and ensure that he could ‘be of great use in the future to the Administration in important matters pertaining to Latin America’.54 Other recommendations in this area were also being proposed. Harry Guggenheim, a former ambassador to Cuba, suggested to Eisenhower that he appoint an ‘Ambassador at Large’ for the region as the current set-up was ‘not properly organized to give the sensitive South Americans the feeling that they are really important in our scheme of things’. Eisenhower concurred. ‘If we should deem it desirable to continue the work Milton started by getting some outstanding American to accept the post of Ambassador at Large’, he told Walter Bedell Smith, ‘I would be quite ready to go along with such a plan.’55 Throughout 1953, then, the administration pursued a coherent and determined approach to using high-profile public relations gestures as a way of improving inter-American relations. And, to a not insignificant extent, they believed these efforts had been successful. Fostering closer relations, however, was only the first phase in the administration’s approach; the next stage, which was more important, was to use this as a springboard to improve Latin American receptivity to US economic proposals. ***

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While undertaking these efforts to provide a boost to inter-American relations, however, US policy makers also recognised that verbal commitments to foster development in the region would increase calls from Latin American leaders for greater levels of assistance.56 It was a point recognised by Willard Beaulac, a career diplomat who had spent a good deal of time in Latin America. Over lunch one day, Beaulac told Emmet Hughes that the problem for the United States was in managing expectations. ‘One thing most people don’t understand about propaganda’, Beaulac explained, ‘is that it’s the quickest way to build up the ego of the fellows you’re trying to propagandize . . . these countries fast get the impression they must be awfully important to us when we spend so much time and money trying to cultivate them’.57 Beaulac’s warning, despite its harsh tone, was similar in content to those that were emerging from within the administration. In August, the Operations Coordinating Board (OCB) – an inter-departmental body created to coordinate the implementation of policy – made a comparable point. ‘The Latin Americans must be convinced of the friendliness of the American people and Government towards them’, one OCB analyst noted; They must be convinced that we like and appreciate their culture, that we value their friendship and that we respect them as political equals. The solution does not lie in the field of propaganda. In order to convince the Latin Americans of these truths there must be more than official declarations and aspirations.58 Evidence of potential problems, though, did little to dent US confidence in their economic stance. Emerging theories of development in Latin America, especially those proposed by Raul Prebisch and the Economic Commission for Latin America (ECLA), which suggested that Western capitalism actually harmed developing nations, were seen as more of a nuisance than a serious alternative.59 They also remained sanguine when confronted with negative appraisals in the media and when early progress reports on NSC 144/1 could only cite limited advancements on the economic front.60 In July, for example, the first progress report noted that ‘little further progress has been made in improving the climate for private investment in the Latin American countries’; a second report, though identifying signs of improvement, also recognised that this was limited to Argentina, Chile and the Dominican Republic.61

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Indeed, there were enough signs of apparent progress to offer solace to US officials concerned at the lack of immediate success. For instance, the EXIM Bank – a long-standing provider of loans to foreign recipients – saw its lending capacity in Latin America significantly reduced: from $147 million in 1952 to just $7.2 million in 1953. Instead, the main body through which loan requests would be processed became the World Bank (or International Bank for Reconstruction and Development) – an institution that could be relied upon to apply strict banking criteria to any loan decision, with loans only being made if they were financially viable and if the applicant nation’s economy was perceived to be sufficiently stable.62 Progress might not have been immediate, but this was to be expected: the administration recognised that its developmental vision would take time to come to fruition and that, in the meantime, they could further their objectives by keeping the region strategically secure. The fullest account of the administration’s policy at this point, however, came after the aforementioned trip to the region by the president’s brother, Milton. Although it has subsequently been deemed a missed opportunity, it nevertheless serves as a useful bellwether in identifying the evolution of US thinking.63 Upon arriving back in Washington after his brief four-nation tour in August, Milton Eisenhower proclaimed that ‘all of the South American republics were undergoing a “tremendous development” reminiscent of the United States in the nineteenth century’ and that future development was being imperilled by a ‘lack of dollar exchange and investment capital’. The most important task for the United States, Time subsequently noted, ‘is to strengthen our economic relations’.64 In the interim period between his return and the production of his final assessment, the Washington Post noted that direct US investments in the region now stood at some $5.7 billion while the assets held by US companies totalled $7.4 billion. ‘As an investment area for the United States’, the report explained, ‘Latin America leads all other regions of the world’. Assistant Secretary of State John Moors Cabot, meanwhile, used the announcement of an aid package to Bolivia to reaffirm US faith in the main principles of an economic vision that, for an approving Washington Post, should serve to ‘dissipate the Latin feeling of neglect by setting guidelines for relations with the United States’.65

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When the report eventually emerged in the late autumn, it provided an appraisal of US policies along with a series of minor adjustments to address emergent problems. For the most part it reaffirmed the central tenets of NSC 144/1. Implementing this policy, the Eisenhower report suggested, held ‘tremendous complications’ and would require sustained ‘wisdom and patience’. At the same time, the report also highlighted a growing convergence between North and South America that provided the prospect of closer cooperation. The independent cultures of the United States and the South Americans, Eisenhower wrote, were now ‘cross-fertilizing each other, to their mutual enrichment’, and ‘cultural diversity is not so great as to be a real impediment to development of that understanding on which effective cooperation among our peoples can surely be built’. Problems were in evidence, to be sure, not least the continued misunderstanding typified by the fact that Latin American leaders called for greater levels of US public and private financing while, at the same time, legislating against them. Nevertheless, Eisenhower explained, the United States and the Latin Americans, when it came down to it, wanted the same things. ‘Virtually all the Latin American people’, he wrote, ‘seek the goals of permanent peace, independence, rising levels of economic well-being, and attainment of the basic values of Western civilization’. Development was, thus, the ‘key to better relations between the United States and the other American Republics’. If the right policies were pursued, he noted, then the next generation would ‘witness enormous development’.66 Recommendations for policy shifts were fairly minor. Improved levels of understanding needed to be cultivated, and any advancement toward democratic rule in the area should be hailed, as this would ‘surely contribute to understanding and goodwill’. He also called for modifications in existing economic approaches in an effort to address a particular problem: ‘practices in certain Latin American countries deter the flow of private and public capital needed for economic development’, he warned, and he ‘urged’ his brother and Congress to ‘take a long-range view in considering how we may strengthen our economic relations with Latin America’. Latin American leaders, he went on, continued to feel aggrieved at the fact that billions of dollars in aid had been sent to Europe and Asia; this had been made worse by the fact that, rather than aid, Latin American leaders were seeking loans ‘to satisfy [their] driving demands for broad and immediate economic development’. As such, he

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recommended that ‘public loans for the foreign-currency costs of sound economic development projects, for which private financing is not available, go forward on a substantial scale’. Ultimately, he explained, helping Latin America to ‘meet their great aspirations will redound to their benefit and to ours’.67 *** Though short on specific policy recommendations, the Eisenhower Report nevertheless reaffirmed many of the central facets of the administration’s policy while also highlighting areas – particularly in the steps being taken to channel economic capital to the region – that could be improved. Early in the new year, steps were taken to implement some of the report’s suggestions as part of the NSC 5407 process of updating existing national security policy. Proposed changes to the Mutual Security Program in Latin America, indeed, took their cue almost entirely from Milton Eisenhower’s suggestions. Calling for measures including the maintenance of a ‘national lending institution to make sound development loans’ which might not be ‘made by an international agency’, the report also highlighted the need for ‘even more rapid development’ in Latin America that would depend upon ‘three principal factors, all of which may be affected by internal political considerations . . . (1) realistic country development plans, (2) availability of investment capital, and (3) technical progress’. Substantial difficulties, however, remained in place. High inflation, chronic balance of payments problems, declining levels of gold and dollar holdings, a rising population, and a falling food supply – all were undermining the administration’s economic objectives. And though public loans could be increased to tackle the lack of available capital, the prospects for improved levels of private investment were not overly propitious. Though investment levels had increased after 1950, these were less substantial than had been the case elsewhere: investment between 1950 and 1952 in Latin America was up 25 per cent as opposed to a figure of 48 per cent in other areas. Worse, an upsurge of some $582 million worth of private capital in 1952 – of which $278 million was net inflow of new capital and $304 million was undistributed subsidiary earnings – had fallen by 1953 to $417 million – with the figure of undistributed subsidiary earnings remaining static and a net inflow of just $113 million in new capital.68

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Evidence of continuing problems, though, simply strengthened the administration’s belief that adherence to the US model of economic progress was the only viable solution. Robert Woodward, a mid-level State Department official, reaffirmed the prevailing view in a speech in Cambridge, Massachusetts in January 1954. ‘Some of the Latin American countries are now aware that private investment has been the Aladdin’s lamp which has magically raised living standards in the United States’, Woodward told the audience. ‘They are discovering that this lamp need only be rubbed in the right way to create miracles for their own countries – toward fulfillment of their economic aspirations.’69 Equally, the Senate Banking and Currency Committee concluded in March that that the United States should buy more goods and services from the region in return for greater Latin American efforts to ‘encourage’ the influx of private capital and ‘keep government out of business’.70 A stark example of how wedded US officials were to their economic approach, and an equally sharp demonstration of how its developmental stance could prove incompatible with their strategic goals, came in March 1954 at the tenth Inter-American Conference in Caracas, Venezuela. By far the biggest motivation for US involvement was their desire to secure hemispheric support for a move against the Guatemalan leader, Jacobo A´rbenz (who, as we shall see in more detail in the following chapter, the United States had decided to try and oust). Their efforts to achieve this in Caracas, as numerous scholars have demonstrated, were a vital part of the process leading to A´rbenz’s removal from power in June.71 However, the conference also had an economic component, too, as the Latin Americans saw it as an opportunity to engage the United States in a diplomatic forum to discuss underdevelopment.72 Prior to the conference some officials recognised this and warned that, as well as honing its political strategy to achieve its strategic objectives, the United States also needed to determine its economic approach. The danger, as ambassador to the OAS John Dreier wrote in a memorandum for John Moors Cabot, was that the United States would go to Caracas unprepared to counter Latin American proposals. ‘The clarification of our positive economic program’, Dreier wrote, ‘remains the largest and most important business to be accomplished if this Conference is not in fact to mark a considerable decline in the vitality of our inter-American relations.’73 Cabot, who agreed, sent the report to Dulles, recommending

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that the administration should rapidly implement some of Milton Eisenhower’s suggestions to help ‘create a favourable background for our delegation’.74 The OCB made an almost identical suggestion. ‘Latin Americans are dissatisfied with the present state of their economic relations with the United States’, a planning report for Caracas warned, and these ‘complaints will be voiced’ during what ‘is expected to be a difficult meeting for the US’.75 In addition to the efforts to secure regional support against A´rbenz, then, the Caracas Conference also needs to be considered for its economic ramifications. After all, it would have been far easier for the US delegation to achieve their objectives if they had made grandiose economic promises to the Latin Americans. Yet there was little chance of this happening. To be fair, the pre-conference planning sessions did recognise that financial inducements could be used to motivate Latin American support. During the conference, meanwhile, word was sent to the American delegation that they could use promises of loans as a lever and that, if necessary, Milton Eisenhower could be flown in to provide moral support. A promise to attend a future regional economic conference was also made.76 Nevertheless, the US position was strikingly clear: private capital could and should shape Latin American development and, on this, the United States would not be moved. In his opening address, Dulles noted that he wanted to ‘see the economies of our American friends and neighbours more vigorous than in some cases they are’. Domestically, Dulles noted, ‘private capital and free enterprise constitute the great source of our own economic well-being’. This was free to go to Latin America, he continued, but ‘private capital cannot be driven. It has to be attracted. Therefore, the decision rests with you’.77 A week later, after listening to numerous discussions about inter-American economic relations, Dulles set out his vision of US policy in the region. Economic progress, Dulles argued, was at the heart of inter-American relations – and this, he continued, went beyond simply defending against Communism. ‘We seek economic welfare’, he stated, ‘because, here in the Americas, we believe that all human beings, without regard to race, religion or class, should have the opportunity to develop in body, mind and spirit.’ This should be achieved, he continued, ‘within the framework of a free-enterprise economy which places a primary responsibility upon private effort’ and which would aid the development

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of a ‘population of individuals who work hard, who invent, who save, who share’. Washington, he vowed, ‘will not continue to be satisfied merely with good political relations in this hemisphere. We also want good economic relations’.78 His deputy in Caracas, Samuel Waugh, followed this up with an equally strong statement. Post-war development in the area, Waugh told them, had been ‘spectacular’ and this had come as a result of private enterprise. ‘Foreign capital can hasten that process’, he argued.79 Furthermore, the final economic agreements at Caracas were in line with these sentiments. If the battle to secure a resolution against A´rbenz had been difficult, the results in the economic sphere were largely in keeping with US wishes. Resolutions on bolstering trade and agrarian reforms – which were believed to depart too far from the US vision – were left unsigned; the final resolution, meanwhile, contained a clause that stated that the climate for private capital should be improved and that ‘the American countries maintain and adopt suitable economic measures, including monetary and fiscal, for the purpose of encouraging economic development and maintaining conditions favourable to the flow of private investments’.80 Following the conference the US view was that, on the whole, it should be viewed as a success. A resolution against A´rbenz had been secured, albeit not one as forthright as originally hoped, and the line had been held on the economic front. Still, the key question remains: why, if they were so determined to gather support against A´rbenz, did the administration not prove more willing to alter their economic stance and make their task easier? The answer is that, while they could indeed have made securing a resolution far simpler, economic and strategic concerns in Latin America were seen as being two sides of the same coin. One reinforced the other. Tellingly, as post-Caracas appraisals made clear, the US delegation had pursued this line even though they recognised its unpopularity. While at the conference, Dulles reported to the NSC ‘he had encountered much unhappiness and anxiety with respect to the commercial and financial policies which the Administration was following’.81 Similarly, an internal State Department assessment noted the divergence in US and Latin American perspectives. ‘The Latin American countries’, noted the report, ‘fell short of their objective of firm commitments by the United States on key economic issues’ in spite

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of the fact that they had been far better prepared than at previous meetings and were armed with reams of data supplied by Raul Prebisch and ECLA.82 There was, nevertheless, one flaw in the administration’s position: in obtaining the resolution the United States had been compelled to agree to a regional economic conference later that year, where it was believed there would be ‘additional pressure for specific and concrete commitments by the US, based on the premise – which is not new – that if there is unity in the Western Hemisphere militarily and politically, this should also extend to the economic field’.83 US officials, of course, did not entirely disagree with this point, but they were determined that the region’s economic advancement should be managed in a way that was sustainable. Their first 14 months in office had seen them pursue this strategy with great vigour, while assuming that it was compatible with their broader strategic efforts. Signs were already emerging, however, that there was an inherent tension between these two aspects of policy. This had been partially evident in Caracas. Examining the implementation of NSC 144/1 more widely, though, offers a clearer illustration of how it was beginning to manifest itself.

CHAPTER 2 STRATEGIC AND ECONOMIC INTERVENTIONS FROM GUATEMALA TO THE RIO CONFERENCE

At the local inn in Princeton one weekend in May 1954, in the shadow of the looming Gothic architecture of the university, a group of state and nonstate officials convened for a two-day discussion about American foreign policy. Their task, as defined by CIA director Allen Dulles, was to determine whether ‘we have firmly persuaded the people of that area [postcolonial] that it is better to be in our economic orbit than in the Soviet orbit – to put it brutally’. What was needed, David McDonald, the president of United Steel Workers, added, was a ‘manifesto’ that the ‘people of the world can understand’.1 Over the course of the next two days, the participants worked to hone new, more dynamic approaches to foreign economic policy that could help US efforts to court the world’s developing nations. At the end of the first day, a position paper was produced that set out the perceived relationship between development and success in the Cold War. ‘The growth of the free world economy is important to us for much more than economic reasons’, the paper explained: We believe material progress to be a necessary foundation for more far-reaching American aspirations for a civilization in which human dignity, freedom, and respect for the individual can flourish, and in which societies based on these principles can effectively defend themselves.2

CHAPTER 2 STRATEGIC AND ECONOMIC INTERVENTIONS FROM GUATEMALA TO THE RIO CONFERENCE

At the local inn in Princeton one weekend in May 1954, in the shadow of the looming Gothic architecture of the university, a group of state and nonstate officials convened for a two-day discussion about American foreign policy. Their task, as defined by CIA director Allen Dulles, was to determine whether ‘we have firmly persuaded the people of that area [postcolonial] that it is better to be in our economic orbit than in the Soviet orbit – to put it brutally’. What was needed, David McDonald, the president of United Steel Workers, added, was a ‘manifesto’ that the ‘people of the world can understand’.1 Over the course of the next two days, the participants worked to hone new, more dynamic approaches to foreign economic policy that could help US efforts to court the world’s developing nations. At the end of the first day, a position paper was produced that set out the perceived relationship between development and success in the Cold War. ‘The growth of the free world economy is important to us for much more than economic reasons’, the paper explained: We believe material progress to be a necessary foundation for more far-reaching American aspirations for a civilization in which human dignity, freedom, and respect for the individual can flourish, and in which societies based on these principles can effectively defend themselves.2

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Clarity of purpose, however, did not translate into equally clear action. Thus, while a second position paper highlighted the fact that ‘the primary means by which the US will seek to lead the free world toward greater economic progress must be the means of free enterprise rather than “planned economy” or “hand-outs”’, disputes soon arose as to what this meant with respect to actual policy.3 In the months that followed, in fact, some of the key architects of the Princeton papers would become disenchanted with the approaches being taken by the Eisenhower administration. Chief among the discontented was Walt Rostow – a fervent anti-Communist and staunch advocate of US-funded development. In the wake of the conference – strongly encouraged by Jackson – Rostow and his MIT colleague, Max Millikan, authored a new proposal for US foreign economic policy. The proposal called for Washington to pour its financial resources into aiding economic progress in the Third World, and in 1954, 1956 and 1957 they repeated their calls for a $20 billion international loan fund to provide a catalyst for Third World development. Such grandiose schemes, unsurprisingly, found little favour with the architects of US economic policy, Treasury Secretary George Humphrey and President Eisenhower. But while Rostow and Millikan would struggle to find common ground with Humphrey and Eisenhower, it was clear that bringing economic advancement and the liberal capitalist system to the world’s underdeveloped areas was becoming an increasingly prominent part of US Cold War policy.4 Furthermore, the outcome of the Princeton meeting can be situated alongside a broader debate that took place in the first half of 1954 over what the US approach to this issue should look like. While Eisenhower was certain that Rostow’s model was too profligate and unlikely to succeed, he did want his administration’s policy to be clarified. And, as this took place, it became clear that the preferred approach, wherever possible, was for development to be shaped by private capital and trade. ‘The system toward which we must work’, Eisenhower announced in a speech to Congress in January, ‘is one which will provide increasing opportunities for mutually advantageous trade among the free nations, and which can operate without the repeated extension of grants-of-aid from any nation.’5 A specially appointed task force, the Randall Commission, reaffirmed this in their blueprint for foreign economic policy. Though it contained a number of problems, the report made clear the administration’s developmental preferences. In the speech he gave to

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announce the commission’s findings, Eisenhower noted that his approach consisted of four interlocking parts: ‘Aid – which we wish to curtail’, ‘Investment – which we wish to encourage’, ‘Convertibility – which we wish to facilitate’, and ‘Trade – which we wish to expand’. Soon afterwards the president went even further. ‘We must distinguish between an emergency and a chronic malady, between a special case and a general rule’, he explained. ‘I subscribe, therefore, to the principle that economic aid on a grant basis should be terminated as soon as possible consistent with our national interest.’6 As with many sweeping policy statements in the Cold War, it would soon prove necessary for the administration to be more flexible on this as they sought to combat increasing Soviet efforts in the Third World. Nonetheless, these deliberations were of the utmost importance in Latin America; here, where any Soviet threat remained minimal, the United States could pursue their preferred economic approach far more readily. Through its first 15 months in office, as we have seen, the administration had shaped a regional policy that saw Cold War security and development via private capital as being mutually reinforcing. Progress had been steady at best, but enough advancement was discernible for US policy makers to remain sure they were heading in the right direction. As compromises had to be made elsewhere in the developing world in order to stave off strategic threats, the policies pursued in Latin America were far closer to the administration’s preferred economic approach outlined above. By examining four cases – Argentina, Brazil, Bolivia and Guatemala – the first section in this chapter will illustrate the administration’s quest to shape regional development in the correct way. Each nation posed different problems for the administration, yet in each case they found a response that accorded with their economic principles. Though they were able to work out a solution, however, each case pointed to emerging tensions as the steadfast nature of US economic policy started to grate with Latin American leaders more interested in meeting their own objectives than in playing their part in Washington’s wider Cold War struggle. The second section will look at the effect that US attempts to implement NSC 144/1 across their first two years in office had on their regional strategy, and outline the changes that were believed to be necessary in a revised document in the autumn of 1954 ahead of a regional economic conference in November. Stresses were starting to

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emerge, though, and some advisers started to dispute the idea that US policy was bound to succeed. Such warnings were ultimately rejected, but the course of events in 1954 foreshadowed problems that would emerge with more force in the years ahead. *** Some appraisals of US policy in the region in early 1954, while restrained, were nevertheless complimentary about perceived successes. ‘Last week’s cables’, a report in Time noted in January, ‘carried a notable list of advances in Latin America’s trade and commerce, chalked up with the aid of US private enterprise.’7 Internally, the tone was more guarded. A progress report finalised in May recognised that ‘existing policy appears to be satisfactory’, but that the benefits derived had, so far, been limited. Lending had continued at more or less its usual rate – with the World Bank and EXIM Bank agreeing new loans worth close to $70 million (though the majority of this, some $42 million, was headed to two projects in Brazil) – while more work was needed to limit the impact that US trade barriers were having on Latin American exports and encourage Latin American leaders to adopt prescribed stabilisation and currency reforms in concert with the International Monetary Fund (IMF).8 Progress, though, was not expected to be immediate – and, as such, the steady advances being made were not seen as cause for alarm. Moreover, in their approach toward Argentina, Bolivia and Brazil – three countries important to US goals where relations were strained – the administration found different ways of bringing these countries round to Washington’s way of thinking. Each, as we shall see, required a different approach, but the outcome was the same in all three. However, as would become more apparent in Guatemala, tensions within US policy were starting to show. As the United States pursued its goal of persuading the Latin Americans to embrace private capital they were also undermining the region’s strategic stability. Argentina posed major problems. Despite an economy that showed signs of promise and a long history of links to civilised Europe, Argentina remained on the margins of inter-American relations due to its policy of neutrality during World War II.9 Following Juan Pero´n’s assumption of power in 1946, US–Argentine relations had become increasingly strained. Pero´n was determined to try and use the presidency as a vehicle

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for revolutionising Argentine social and economic structures and, in doing so, he believed it would be necessary to forge a third way between capitalism and socialism. Progressive and repressive in equal measure, Pero´nism sought to bring prosperity to all of Argentine society. In doing so, however, he soon found himself at odds with US officials, who were wary of his rejection of orthodox capitalist processes, his suppression of the media, and his habit of making powerful anti-American comments. In response, the Truman administration sought to nullify his position. By the early 1950s, neither Truman nor his Secretary of State, Dean Acheson, saw any immediate prospect of an improvement.10 Yet Argentina’s importance in regional economic terms ensured that the country needed to be brought in from the cold if the Eisenhower administration’s approach was going to succeed. Effecting this change would not be easy, however, as Pero´n was unwilling to back down in his dispute with the press and the US Congress were opposed to dealing with a leader infamous for his anti-American outbursts.11 For Pero´n, the quest to reshape Argentine society outweighed any desire to be seen as acceding to US wishes. However, the impasse was broken with Milton Eisenhower’s visit to Argentina during his 1953 tour of the region and, despite his brother’s scepticism, relations improved almost immediately. In his memoirs, Milton Eisenhower apportioned the transformation to Pero´n’s acceptance of US principles. ‘As I delivered a brief speech on how a free press operates – something obviously unknown to him – I took from my pocket a new editorial from the New York Times which heatedly criticized an action taken by President Eisenhower’, he wrote. ‘A dawn of understanding – or something – flashed on his face. As we stood up, he said solemnly: “Freedom will be restored to your news agencies, newspapers, and magazines within forty-eight hours”.’12 This, coupled with the extravagant reception laid on by Pero´n for his visitor, shaped Milton Eisenhower’s perception of the Argentine leader and led to his subsequent recommendation that ‘it would be a serious mistake not to capitalize on President Pero´n’s attitude’. No such thing was true, of course. Pero´n altered his stance because it now suited his interests, not because he had been inspired by the actions of the president’s brother.13 The upshot, though, was that the Argentine leader now made a conscious effort to side more openly with Washington, while US officials sidestepped complaints from other Latin American nations regarding the decision to deal openly with a former pariah state. By October, Pero´n

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was declaring that ‘the small difference with the United States’ had been ‘completely settled’ and was hailing the ‘great personality of Gen. Eisenhower’.14 Both Eisenhower and Pero´n, then, saw more to be gained by cooperation than by discord at this point. Notably, later disagreements – over Pero´n’s failure to back the United States against A´rbenz, and a move against the interests of American companies – did not have the sort of negative impact that they would have had a year or two earlier.15 Still, Washington recognised that it had to tread carefully. Warmer relations with Pero´n might well benefit the US – and clearly, any long-term hemispheric strategy to galvanise economic performance could not succeed if Argentina was ostracised – but this had to be done in a way that did not provoke too much anger among those in Congress or in Latin America who remained opposed to him. In briefing a State Department official about to join the embassy staff in Buenos Aires, for example, Foster Dulles told him that great care must be taken to ‘respond to Pero´n’s favourable orientation’ without upsetting ‘our good friends of long-standing’.16 As relations improved further, though, efforts were soon made to normalise the bilateral economic partnership. In 1954 two EXIM Bank loans – of $2.52 million and $12.3 million – were sent to Pero´n’s government.17 Soon after, in August, a State Department appraisal noted that ‘real progress’ had been made: Pero´n now leant much more heavily toward the West, while ‘sincere efforts’ were being made to ‘improve the atmosphere for foreign private investment’ and had led to a ‘marked resurgence of interest on the part of United States investors in Argentina’.18 By September, Pero´n was informing the visiting Henry Holland – a man wholly convinced of the importance of private capital, who spoke fluent Spanish and had replaced Cabot as the State Department’s leading Latin Americanist – that he proposed to ‘place greater emphasis on private enterprise, doing everything that he can to encourage it to take over production and business in the country’, and agreed that ‘Government should do everything possible to encourage private enterprise to invest in the country’s economic development and without discrimination between domestic and foreign investors.’ Loans, he argued, should be discouraged. ‘Of any amount loaned, 50 per cent would be stolen by Government officials and the remainder inefficiently invested . . . Latin American Governments, his own included, are notoriously poor builders and administrators.’19

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While much of this, undoubtedly, was Pero´n courting Holland for his own ends, the United States could also derive satisfaction from the sense that an improvement had been brought about and that, finally, the government in Buenos Aires was adopting the sort of economic principles that the Eisenhower administration believed to be so important. Moreover, Pero´n backed up his blandishments with action. Revolutionising Argentine laws to ensure substantial protection for foreign investments was liable to be a tough sell politically, and relations between US companies and the Argentine government would remain problematic.20 Nevertheless, Pero´n did go all out to woo potential investors. After securing a deal in Argentina to manufacture cars and trucks there, US industrialist Henry Kaiser announced, ‘In all my life, I have never met anybody as effectively dedicated to the promotion of an automobile deal as General Pe´ron.’21 By December, and during another visit by Holland, the extent of bilateral economic cooperation was highly evident. During the conversation, Holland painted the United States and Argentina as ideological bedfellows – committed to the stance that ‘views private enterprise as the principal factor in economic development’. Some of this, assuredly, was Holland adopting his own form of flattery, yet the fact that such a conversation could take place would have been unimaginable 18 months earlier. In US eyes, their policy had succeeded. Argentina had been rehabilitated, now leant far more heavily toward the West, and was adopting economic policies in line with US recommendations.22 But there was also a cost involved. In prioritising a rapprochement in US–Argentine relations, the Eisenhower administration sent a signal to the other countries of Latin America. If progress had been made in terms of bolstering the region’s security and economic potential, a blow had undoubtedly been delivered to notions of unity as Pero´n’s past misdeeds were too easily forgiven for many in the area who remained opposed to him. *** Brazil posed a different set of problems. Whereas the problem in Argentina lay in bringing a major nation in from the cold, the difficulty in Brazil was in realigning the bilateral relationship in a way that brought US relations with Rio de Janeiro into line with those elsewhere in the hemisphere. Though the relationship had declined since World War II, there was still a sense that Brazil enjoyed better treatment than other Latin American nations.23 A successful economic approach in the

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region required a thriving Brazil; at the same time, however, the Eisenhower administration believed that its approach had to be seen as being fair-minded. Strategically, then, there was a need to ‘normalise’ US– Brazilian relations and bring them into line with the rest of the hemisphere. Economically, however, there was an equally pressing need to encourage the government of Getu´lio Vargas to address a series of chronic financial problems. A lack of economic diversification, balance of payments arrears of approximately $612 million, soaring inflation and a rapidly decreasing level of foreign capital flowing into the country – all were hindering Brazil’s drive for modernisation and some officials in Rio were suggesting, despite a clear political risk, that this now ought to be tempered in a bid to prioritise stability over progress.24 In terms of US policy, therefore, this required an approach that downplayed any lingering closeness in the bilateral relationship while, at the same time, taking decisive steps to persuade the Brazilian government to implement the desired economic measures to combat existing problems and embrace US recommendations. A clear example of how this would look in practice came with the aforementioned debate over the $300 million EXIM loan. The key point, irrespective of the fact that Brazil ultimately got its way, was that the administration’s intention was either to forbid the loan or to cut it dramatically. While one State Department official cautioned that ‘our failure to lend . . . will create a serious risk that Brazil will become more nationalistic and less cooperative in its relations with us’, the majority of advisers within the administration – and especially Foster Dulles and George Humphrey – were deeply opposed to providing the loan.25 Dulles, for example, told the president that the US should ‘give them $100 million and expect them to work it off with their creditors and not be blackmailed, for once we start paying out it will become a tremendous financial burden, for any country who wants to yell “communism” will come in for loans’.26 Ultimately, the charge that this course of action would lay the administration open to allegations of having reneged on a deal agreed by its predecessor forced Eisenhower and Dulles to cede. Even so, the broader point remained clear: the administration was determined to instil a new approach when it came to lending.27 In the months that followed, the administration sought to move more decisively on this front and disabuse the Vargas government of any notion that the provision of loans to finance development and solve

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pressing financial problems would continue. The justification for this approach stemmed from the belief that the economic situation in Brazil was, if anything, getting worse and that the United States had to act quickly to compel corrective measures.28 They remained firm on this matter, moreover, even when one report noted that it was provoking significant unhappiness. ‘Brazil is annoyed’, the report explained, ‘by the fact that whereas formerly Presidents of the United States and Secretaries of State treated Brazil as an important country, she is now relegated, along with Haiti and Honduras, as another Latin American republic.’29 Just how determined the Eisenhower administration was on this front could be seen in their attitude toward the Joint Brazil – United States Economic Development Commission (JBUSEDC) – a bilateral funding body set up by President Truman, which was intended to identify worthwhile funding projects and channel the necessary funds to them in an effort to secure Brazil’s support for the ongoing war in Korea.30 In April 1953, the Eisenhower administration informed Vargas that they were closing the JBUSEDC – a move that led, unsurprisingly, to vehement protests from the Brazilian leader that the commission had not completed its work. Though Vargas was undoubtedly correct on this matter, the United States was in no mood to negotiate. The commission, Dulles confirmed in response to Vargas’s entreaties, would close once its pending work was complete. Even this, he went on, would only take place if Brazil took steps to tackle its economic problems. Development in Brazil, Dulles wrote to the US ambassador in Rio, had to be ‘within Brazil’s borrowing capacity to prevent the over-extension of credit and default of repayments’.31 Over the next 18 months, the United States continued to pursue a steadfast stance on matters of development, even when it led to political acrimony, and even when it exacerbated mounting political tensions in Brazil that ultimately led to Vargas’s suicide in August 1954. US officials proved unyielding in the face of Brazilian requests. This was typified by Henry Holland’s response to Brazilian suggestions that a bilateral economic board be created. Such a move, Holland informed the Brazilians, was impossible. Instead, ‘on an informal basis, and without the creation of any Board and without the announcement of any policy’, they ‘could rest assured that when economic matters arose between our countries that merited their attention they would be taken to Secretary Dulles and other cabinet members’.32

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Though the United States did not cause the disintegration of the Vargas government, its inflexible economic approach had hardly helped to ease a worsening political situation. Washington’s response, however, was to shake its head at the country’s failings, appoint a new ambassador, and start to work with officials in the new government to implement the appropriate policies.33 The prevailing view, as a CIA analyst informed the NSC, was that little had changed: ‘although the new cabinet was competent, experienced, conservative, and pro-US’, the analyst explained, ‘it would have to face a number of difficult problems, including inflation, a foreign exchange crisis, lack of parliamentary majority, and national and state elections’.34 Consequently, despite the fall of the Vargas government, the US approach would remain fundamentally unchanged. As in Argentina, success had seemingly been forthcoming in Brazil, as bilateral relations had been normalised, efforts to limit the amount of loans sent to the country had been implemented, and a strong line was being adopted in terms of the steps that the new government in Rio ought to take to address its economic problems. Advancements in the financial sphere, though, again came at a cost. If the Eisenhower administration had begun the process of changing the bilateral economic relationship, they had done so by weakening the political relationship between Washington and Rio. *** Following a period of political and economic upheaval in Bolivia, a left-leaning government (the Movimiento Nacionalista Revolucionario – MNR) headed by President Paz Estenssoro had come to power in early 1952. Eager to challenge the status quo, the MNR offered a significant challenge to the US vision of hemispheric affairs. As a consequence of the revolution, there was a very real fear that the nation’s economy would collapse and destabilise the region. If this happened, the road would potentially be open to radicalism and further dissent from the existing order; it would provide significant ammunition, moreover, for radical groups in other nations who wanted to move out from under Washington’s shadow.35 Much of the danger that events in Bolivia posed for US interests had arisen out of the fact that, at least in part, it had been the intransigence of the Truman administration that had provided the catalyst for the MNR’s

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successful overthrow of the existing government. The tipping point had come when the Truman administration and the Reconstruction Finance Corporation (RFC) compelled the Bolivians to ‘dismantle the pre-war international tin cartel’ that had dominated Bolivia’s export economy.36 Fears of the new government’s radical nature deepened as rumours grew that it planned to nationalise Bolivia’s largest three tin mines. Bolivia’s ambassador in the United States, Victor Andrade, sought to reassure Truman’s State Department that only the three major mines would be nationalised and that compensation would be offered to their owners.37 Little progress toward a solution was made during Truman’s last months in his office, as neither he nor Acheson proved able to reach a deal on tin exports and raised the prospect of the United States being accused of practising economic brinksmanship and pushing the Bolivian people to the verge of starvation as the economy teetered on the edge of collapse.38 At first, the Eisenhower administration sought to address this stalemate in US– Bolivian relations by force. Dulles told the Bolivians that the offer of a new one-year tin contract that had previously been made was now off the table and that any future agreement would rely upon the government in La Paz taking corrective economic steps.39 The looming prospect of an economic collapse in Bolivia, however, soon came to define the US view of the situation. Financial assistance, rather than diplomatic and economic coercion, might provide the most effective way of alleviating the problems being faced and guiding the MNR back toward more appropriate policies. Channelling aid to Bolivia and agreeing a new tin contract, John Cabot told one meeting, would help to ‘meet the immediate economic crisis’ and ‘provide a stimulus to economic diversification, which appears to be the only long-run solution’. Eisenhower and Dulles both supported this stance, and both rejected the counterarguments of George Humphrey who feared this would set a dangerous precedent. The United States, Dulles noted, needed to find ways to adopt sound business practices and economic approaches across the region. In Bolivia – unlike in Argentina and Brazil – this meant agreeing to extend substantial financial assistance to bring about an acceptable way forward.40 At a cabinet meeting on 3 July, Cabot’s approach was finally confirmed and a new one-year tin contract was agreed.41 Eisenhower subsequently wrote to Paz Estenssoro and announced that the United States would not only purchase more tin, but also send food aid in order to stave off a famine. ‘The Government of Bolivia is already

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taking wise and courageous measures of self-help looking toward the diversification and stabilization of the Bolivian economy’, Eisenhower wrote, ‘but unfortunately these measures cannot produce their full effect in time to prevent severe suffering by the people of Bolivia.’42 Economic catastrophe was avoided, then, and the hope was that this would serve to allow the government in La Paz to implement measures that would allow greater progress and recovery. Yet, before long, the fears that Eisenhower’s advisers had consistently put forward when opposing financial assistance in the area were proven to be well founded. ‘After mid-1954, when emergency US aid will be exhausted’, a national intelligence estimate explained, ‘the government’s stability and political orientation will depend greatly upon its ability to obtain additional outside support.’43 At this point, the administration would need to decide if it was willing to agree to a further injection of aid; if they did, however, it would increase the chances of Bolivia becoming more dependent on US financing and less able to fund its own economy. For US officials in 1954 the largest fear was that economic collapse in Bolivia would lead to radicalism and withdrawal from the regional economy. Accordingly, a decision was taken to recommence smelting at the RFC’s facility in Texas and to purchase a fresh consignment of tin from Bolivia. The United States did not need these supplies in a strategic or economic sense, yet they were believed to provide the only logical way of ensuring a steady flow of capital to that troubled nation. It could not be a long-term solution, as the Washington Post argued in May, but there was no escaping the fact that Bolivia was not believed to be ‘ready to stand on its own feet and tin remains the principal source of dollar exchange’.44 By mid-1954, the administration had sent aid worth some $14.5 million to Bolivia in an effort to stave off collapse and push that country toward a more appropriate form of development. Just as important, however, was the perception that this approach had been a success and would lead, in time, to the right developmental path being adopted. As Time noted in late 1954, ‘In La Paz last week, Bolivians gave the US an uproarious show of thanks . . . Bolivia still needs more loans and grants. But it has a better chance than ever before, because it has now completed – with US help – an economically vital road.’45 Events in Bolivia, unlike those in Brazil or Argentina, demonstrated that the US would utilise economic assistance if the situation seemed to warrant it. Without US aid, the Eisenhower administration believed that

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the Bolivian economy would have imploded and the government of Paz Estenssoro would have collapsed. Aid was in no way seen as a viable long-term option, but it was seen as providing enough breathing space to allow the government in La Paz to stabilise the economy and encourage greater levels of private investment.46 This, in turn, would theoretically lead to a regime that was secure, oriented toward the United States, and far less radical than it might otherwise have been. The problem, however, was that the administration’s wariness with respect to economic aid was well founded. Ensuring stability in Bolivia would prove to be an expensive commitment as the hoped-for results failed to follow; it would also stymie the capacity of the Bolivian government to adopt their own developmental decisions as they became trapped in a cycle of requiring more aid to meet pressing problems. Worse, the underlying problems never really went away and would re-emerge with great force in the early 1960s as the revolution became much more radical and of deep concern for US officials.47 *** In spite of the lack of symmetry between the approaches taken in Argentina, Brazil and Bolivia, US officials could nonetheless view them all as having led to successful outcomes and as being broadly in keeping with the policy set out in NSC 144/1. Political and strategic stability had largely been strengthened, and progress had been made in terms of guiding all three toward the appropriate form of development. Events in Guatemala were markedly different, though, as the full impact that imposing Cold War assessments of indigenous nationalism could have became clear. Again, the Eisenhower administration could point, in the short term, to the fact that it achieved its goals in Guatemala: a regime opposed to the United States, and allegedly in cahoots with the Communists, was nullified and the CIA’s fingerprints on the operation were smudged enough for the facade of plausible deniability to be maintained. Yet short-term success masked long-term problems. Latin American fury at the intervention, visceral at first but then evolving into something deeper and more potent, would cast a long shadow over inter-American relations in the years and decades that followed. Furthermore, the removal of A´rbenz, while consistent with the policy in NSC 144/1, was nevertheless an extreme act that did little to aid the regional drive to encourage hemispheric economic cooperation.48

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Difficulties had been mounting in US– Guatemalan relations since the revolution of 1944, but it was not until the election of Jacobo A´rbenz in 1951 that the enmity became entrenched. Under the revolutionary regime, Guatemala had gained a widened electoral franchise, empowered labour unions, removed feudalism, and moved to initiate major land reform measures. Though similar trends were evident elsewhere in the region, none were as ambitious or far-reaching as those in Guatemala. Sweeping changes, of course, led to emerging tensions as embedded elites fought back against A´rbenz’s reformist agenda. The United Fruit Company, in particular, was highly perturbed at the reforms, which threatened their stranglehold over the Guatemalan economy. Able to make use of prominent links to high-profile American leaders, especially after Eisenhower took office, United Fruit were soon able to heighten fears that the regime in Guatemala was, at the very least, inspired by Communism. In 1952, an initial CIA plan to remove A´rbenz had been shelved as hopes of keeping it covert began to look unrealistic.49 Though the situation was not deemed critical by the time Eisenhower took office, it was fast approaching the time when the White House would have to make a call as to how far they were prepared to go to conspire against A´rbenz.50 As allegations that A´rbenz was a communist become more commonplace, both publicly and in private, the pressure on the administration to act soon began to mount.51 As a National Intelligence Estimate noted in the spring of 1953, Guatemala has frequently taken occasion to demonstrate its independence of US leadership and in general has been less cooperative than could be desired . . . Moreover, the regime has systematically been hostile toward US private economic interests in Guatemala. Detriment to Hemisphere solidarity would not deter Guatemala from any course of action suggested by its own interests.52 A´rbenz’s actions, in other words, came to be seen as undermining the credibility of US leadership in the Western hemisphere. Allen Dulles, in a memorandum penned in March 1953, wrote, ‘They have flaunted us and consistently got away with it. It is time they were brought to realize that this could not continue.’53 Once this viewpoint took hold, US

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officials interpreted it in the way that made the most conceptual sense: the threat in Guatemala was of Cold War concern because it threatened US power and, as such, was a potential benefit to the Soviets. If the regional situation provided the grounds for US antipathy toward Guatemala, the global context of the Cold War provided the permissive framework that allowed escalation to take place.54 Still, the belief that A´rbenz was a Cold War threat did not compel the Eisenhower administration to rush headlong into intervening. They were eager to solve what was becoming an increasingly prominent problem, but they also recognised that intervention would have consequences. John Leddy, the State Department officer in charge of Central America and Panama affairs, outlined this and advocated a cautious approach in a memorandum to John Moors Cabot in the spring of 1953. ‘We have not given in to various pressures for direct intervention’, he wrote, which would be in violation of our fundamental Latin American policy and solemn treaty commitments . . . we believe that the Guatemalan situation requires most delicate and patient handling and that the dangers to our interests from inadvisable action should be fully weighed against any immediate lure to dispose of the problem abruptly.55 If possible, then, the administration was eager to avoid outright intervention even though, if necessary, they were prepared to go ahead. But as other approaches unsurprisingly failed to achieve the desired outcome – steps such as arming Guatemala’s neighbours in the hope of provoking the Army to rise up against A´rbenz – the pressure to move ahead with CIA plans to bring about his removal only increased. By the end of 1953, CIA efforts to train an insurgent force and undermine the stability of the A´rbenz government were well under way and Eisenhower had given his assent for this to proceed. The hemispheric agreement reached at Caracas in March 1954 that provided tentative OAS support against A´rbenz, though hardly the bold declaration that Dulles had been hoping for, nevertheless served as the veneer of legitimacy that US officials believed necessary. News that Guatemala had received a shipment of obsolete weapons from Czechoslovakia provided the final piece of the jigsaw. Now, at last, A´rbenz could be seen to be a

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Communist with ties to the Soviet bloc and the OAS had backed a move against him through the Declaration of Caracas.56 Such justifications, of course, fooled very few people; they were more to salve US consciences than they were to persuade people of A´rbenz’s guilt. On 22 June the United States was ready and the operation began. Led by exiled Guatemalan Carlos Castillo Armas, a small insurgent force was inserted into Guatemala and began to head toward the capital. US airplanes buzzed Guatemala City and dropped pro-Armas leaflets in an effort to provide support, despite Eisenhower believing that this might be too overt a display of American involvement and needing some lastminute persuasion from Allen Dulles in order to go ahead. Recognising that his time was up, A´rbenz fled and Castillo Armas was installed as his successor.57 Eisenhower told a White House press conference soon afterwards of his ‘great satisfaction’ that the ‘Communists’ were leaving Guatemala. Later, during an address at a state fair in Illinois, he went further and proclaimed, ‘In Guatemala, the people of that region rose up and rejected the Communist doctrine, and said in the spirit of the agreement at Caracas, “You shall not come here and establish yourselves”.’58 Similarly, Operation PBSUCCESS was begun by the CIA to sift through Guatemalan government offices and locate damning evidence of A´rbenz’s collusion with Moscow. The juiciest and most incriminating pieces (which were few and far between) were quickly released to the press. And, in order to demonstrate the new-found amity in US –Guatemalan relations, Vice President Nixon would visit the country in February of the following year, before Castillo Armas himself was accorded a full state visit to the United States in November.59 Few beyond the confines of the administration, though, were convinced that this was a moment to celebrate. In Latin America and beyond, the intervention provoked outbreaks of anti-American sentiment. In Germany, a CIA report detailed, ‘newspapers normally sympathetic to the US position reacted very unfavourably to Guatemala’.60 Covert propaganda operations were undertaken in Europe, Asia and the Middle East in an effort to stem the tide of bad press; in Britain an attempt was even launched to persuade the Guatemalan ambassador in London to make a statement ‘favourable’ to Washington. In Latin America, the protests were more concerted. Angry demonstrations broke out in cities across the region.61 The intense anger

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was stated clearly by Oscar Weiss, a socialist leader in Chile, who wrote that the United States ‘has lost forever the friendship of the peoples of Latin America’.62 In the immediate context of the Cold War, the intervention in Guatemala is unsurprising. Given the administration’s efforts elsewhere in Latin America – to create a climate of closer cooperation; to convey the sense that all nations, big or small, would be treated the same; and to encourage Latin American governments to embrace the power of private capital – it appears far less logical. Removing A´rbenz undid much of the progress that had been made since 1953 in cultivating closer interAmerican relations. Consequently, it would have a damaging impact on US efforts to encourage wider Latin American acceptance of their economic principles. Nevertheless, by the summer of 1954 the administration could make the case that, in Argentina, Bolivia and Brazil, they had made significant progress in implementing NSC 144/1. Festering disputes had been tackled in two of them, another had been brought into line with policies being pursued elsewhere, and the long-term project of fostering sustainable economic growth had been furthered in all of them. They could even make this case about Guatemala. But a schism had undoubtedly been revealed between the administration’s fixation upon short-term Cold War security and the longer-term process of securing the region’s support by shaping its economic development. Debates that were about to erupt during the planning process for the forthcoming Rio Economic Conference would throw this issue into sharper focus. *** Perceptions of success in the region did little to dispel the administration’s annoyance that it had been compelled to agree to participate in a hemispheric economic conference in November 1954.63 Planning for the conference began in earnest over the summer, at the same time that debates about the place of foreign aid in US policy were continuing to unfold. Despite the passage of the Randall Commission’s final report in the spring, the administration continued to debate the circumstances under which emergency aid would need to be utilised and how this could sit alongside their preference for patient and sustainable economic progress funded by private capital. These discussions were particularly intense with respect to Asia. Robert Bowie, a key national

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security assistant, questioned at a meeting in August 1954 whether ‘we should always favor the countries loudest in espousing our aims’ while ‘leaving vast areas with huge populations to fall to the Communists as their desire for better living is not met?’64 In Latin America, though, aid would continue to be seen as something to be used only in the most exceptional of circumstances. At the same meeting in which Robert Bowie outlined the importance of aid in Asia, Henry Holland reaffirmed this central point. ‘We should urge accelerated economic development in Latin America’, Holland explained, ‘and should make a substantial contribution in capital and technical knowledge.’65 When the administration came to reassess its policy in advance of the Rio Conference, then, it was framed within this wider context of viewing Latin America as being different when it came to the question of development. Accordingly, US officials would use the need to reconsider their policy in advance of Rio as an opportunity to bolster certain aspects of their policy. Once any lingering hopes of withdrawing from the Rio Conference had been discounted, the administration’s attention turned to developing a new regional policy statement (that would become NSC 5432/1). A clear indication of the key goals in redrafting existing policy was set out in an early draft. ‘Economic development in Latin America’, it noted, ‘must be speeded up by increasing Latin American trade, helping to finance sound projects, and encouraging a climate conducive to private investment, but without providing grant aid except to fulfil special commitments and in emergency situations.’66 Before too long, however, disagreements started to emerge over various aspects of US policy – from how much wider Cold War concerns should influence Washington’s approach, to the extent to which the EXIM Bank should have its lending policies adjusted. Much the most sustained criticisms, though, came from the Foreign Operations Administration (FOA) and, in particular, its head, Harold Stassen. A former governor of Minnesota, perennially eager for greater influence, Stassen sought to use the debate over NSC 5432/1 to further the FOA’s bureaucratic clout.67 From June onwards, Stassen and the FOA criticised existing policies and charged that ‘economic policy toward Latin America is inadequate’.68 The FOA’s concern was that, in their hurry to sidestep Latin American proposals, the administration would prompt increased

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ill-feeling in inter-American relations. ‘It appears to be the viewpoint of many members of the Sub-Cabinet Committee’ to determine policy for the conference, one FOA official reported to Stassen, ‘that we should be ready with a defense at Rio, anticipating how we can throw back the Latin American requests, rather than to have a positive approach as to what we have to offer’.69 Others, too, had raised similar concerns. Robert Woodward, the sub-cabinet committee chair, wrote in one memo that ‘it has now become necessary to restate our continuing political and economic interests in the Latin American area’ as ‘there are continuing sources of irritation within the hemisphere which are exploitable for Communist propaganda purposes’.70 An OCB report in September, meanwhile, called for the ‘development of a partnership by and between the US Government and its citizens with the individual Latin American Governments and their citizens for our mutually advantageous economic existence and development . . . why not try “good partners” as a successor and continuation of “good neighbour”?’71 It was not the case that critiques such as these had no impact on thinking within the higher levels of the administration; Eisenhower and his closest advisers recognised the importance of effective publicrelations policies and were attuned to the prospect that Communist propaganda efforts might start to gain ground. But, with Moscow having few tangible interests in the area, the majority of advisers feeding into the debates about Latin America continued to hold that the United States should seek to embed its economic approach rather than amending it in an effort to court greater levels of satisfaction. At the end of June, a paper prepared by the sub-cabinet committee highlighted the importance of economic factors and the ongoing emphasis that would be placed on sustainable modernisation: The United States recognizes that it is in the mutual interest of the United States and the other American republics that economic development in all American states be encouraged. The United States also recognizes that the economic development of each of the American states will depend primarily on that state’s resources and on the internal measures which it takes to facilitate the development of these resources. Such measures will not only have a great influence on capital formation within each of the states but will go far to determine the volume of public and private financing

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which it will receive from abroad . . . in considering loan applications, the United States will view more favourably those where the proponent country has taken measures that are designed to improved the investment climate and has adopted practices to stabilize and strengthen its economy from an investment standpoint.72 Stassen did not disagree with these sentiments – in fact, he had written to one official in July and recommended setting up a ‘conference of private investment interests in the US and Latin America’ – but he did believe that, in addition, it would be wise to channel extra parcels of economic assistance to the area.73 Both the Treasury and the State Department were opposed to these measures; in September an open dispute broke out over this issue.74 On 2 September, with Eisenhower absent, the NSC met to discuss a draft of NSC 5432. Stassen immediately complained that an ‘explosive situation was developing in Latin America’ and that the United States was ‘in a rut with respect to that area’. The draft document, while good, was nevertheless deemed ‘inadequate’. Moreover, Stassen continued, the only way that a ‘favorable climate’ for private capital would be created was through ‘US governmental action’. Few others at the meeting shared his concerns. Walter Bedell Smith cited a parsimonious Congress as precluding measures of the sort Stassen was advocating; the deputy director of the Bureau of the Budget, meanwhile, stated his belief that the United States ‘could not afford to substitute government aid and capital for private investment’. Later, Henry Holland also disputed Stassen’s argument and noted that successfully implementing the document would ‘result in a realization of US objectives’.75 Stassen’s injunctions thus had little impact on the final version of NSC 5432/1 bar sanctioning an increase in EXIM Bank lending to the area, but, even then, each individual case would be subject to presidential approval and would have to be demonstrated to be ‘in the basic US interest’. Beyond this, advocacy of a system based on private investment remained the centrepiece of US economic policy: While recognizing the sovereign right of Latin American countries to undertake such economic measures as they may conclude are best adapted to their own conditions, encourage them

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by economic assistance and other means to base their economies on a system of private enterprise and, as essential thereto, to create a political and economic climate conducive to private investment, of both domestic and foreign capital.76 The implications of this for the position to be taken at Rio seemed clear. The key points, as an interim report by the sub-committee outlined, were that the US approach make a positive ‘contribution’ to the region’s economies, that the United States not be seen to ‘evade or procrastinate’ on Latin American proposals, and to convey the impression that the United States was ‘genuinely interested in promoting the welfare and progress of the region’.77 Great emphasis was being placed on how the US position was presented, a fact clearly seen in their efforts to encourage Canadian attendance in Rio. Officials from the State Department had proactively sought Canada’s involvement, the Canadian ambassador reported back to Ottawa, in order to convey the impression that ‘a country that keeps its own house in order may expect an inflow of foreign capital and that this need not weaken its sovereign independence’.78 Yet if US policy for Rio was clear, Stassen still found one final opportunity to interpose his views on inter-American relations at a preconference meeting of the NSC on 15 November. It was the setting for an acrimonious dispute between Stassen and George Humphrey, the latter of whom had been chosen to head the US delegation to Rio in a move that had caused some consternation for those who considered him too dogmatic. The two men clashed over the language in a particular clause of NSC 5432/1 – clause 9(d) – which Humphrey had wanted to rephrase so that it committed the United States to a less ‘sympathetic’ position on Latin American economic proposals. As the argument ground on, Eisenhower cautioned Humphrey about being too rigid on economic matters in an attempt to placate Stassen. By the end of the meeting, though, it was clear that US policy leant more heavily toward the Treasury Secretary than toward the head of the FOA as Eisenhower proposed that if any ‘programs turn out to involve United States financial support’ Humphrey should ‘indicate that we cannot agree at once’ and inform them ‘that the case must be taken up with the “head of the nation”’.79 By the time he arrived in Rio for the conference, then, Humphrey was in a strong position. He had seen off Stassen’s challenges and ensured that the United States would not be committed to any projects that

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prioritised political glad-handing over developmental and fiscal idealism. And even with Eisenhower’s warning about adopting too strict an approach ringing in his ears, the fact that he and the similarly minded Herbert Hoover Jr had been allowed to lead the US delegation demonstrates the president’s wish for the economic line to be held. From the outset, Humphrey made the US position on economic relations strikingly clear. US policy, he told the conference in his opening remarks, was driven by two beliefs: that the road which will lead most surely and most directly to the goals which we seek is that of the vigorous free enterprise system . . . the other is our belief that we as governments should reduce to a minimum the scope and duration of our own intervention in the fields of commerce and industry. Wherever these principles had been applied, Humphrey continued, ‘they have brought improvements in the lives of our peoples’.80 Though this stance unsurprisingly proved unpopular with the Latin American delegations, it was alleviated by two factors. First, criticisms of existing policy offered by several visiting Congressmen (who were observing the conference) helped to translate Humphrey’s brusque ‘no’ on the issue of aid into something more moderate. Second, in keeping with Milton Eisenhower’s earlier recommendations, increased flows of EXIM loans were approved as a way of pumping more funds into Latin American economies.81 At the same time, as the New York Times explained, it was made clear that this ‘was to be an encouragement to free enterprise rather than a displacement of it’.82 The clarity of the administration’s position at Rio demonstrated how determined they were to pursue their economic strategy in the area. Long-term success could only be assured if sustainable development could take root. This was an approach, furthermore, that US officials believed to be ill-served by continual Latin American requests for different policies and more meetings. ‘There are certain representatives at this conference’, Henry Holland told his colleagues in Rio, ‘who favor the adoption of a resolution to hold meetings similar to the one in which we are now engaged every year.’ In order to ‘avoid’ this he recommended that the United States agree to a conference in Argentina in 1956 (a move that was unanimously agreed upon).83

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After the conference, US officials congratulated themselves on a job well done and celebrated the fact they had avoided any ugly confrontations with disappointed Latin American delegations (though this, largely, was due to the fact that Holland had toured the region beforehand and appreciably lowered expectations).84 Some in the administration even believed that diplomatic relations had improved over the course of the conference. Toward the end of the meeting, Herbert Hoover Jr informed Dulles that the ‘atmosphere is friendly, appreciative of our position, and has definitely improved throughout’.85 At a cabinet meeting on 3 December, Humphrey offered a fuller appraisal. Admittedly, he began, there had been some discontent to start with due to rumours of divisions within the US government over being ‘generous or restrictive’; once this had been clarified, though, he believed that deals had been reached that would be ‘satisfactory to the Latin American countries’. At the meeting’s close, the president ‘emphasized’ his belief that there ‘could be considerable accomplishment derived from smaller private meetings with foreign leaders for the purpose of encouraging the flow of private capital’.86 *** For all the wide-ranging events that had taken place in 1954, the outcome in terms of the administration’s economic policy in the region was essentially unchanged. Modifications had been made to the policy set out in 1953, but the fixation on sustainable development, achieved in a manner compatible with abiding US principles, remained very much to the fore. In December 1954, Eisenhower outlined his views in a letter to his brother, Milton, which exemplified the basic thrust of his economic approach to the area and its place in the wider Cold War world: We should not forget, however, that countries like Burma, Thailand, and the remaining parts of Indo-China are directly open to assault. This does not apply in South America . . . in the case of the Americas, I do not believe that loans are more appropriate than grants. Gifts do not encourage a partnership effort. Loans, I think, are calculated to do so. The difference between South America and Asia, in my own mind, is this. In the case of South America we want to establish a healthy relationship that will be characterized

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by mutual cooperation and which will permanently endure. This will apply whether or not the Communist menace seems to increase or decrease in intensity.87 In the months and years ahead, this would remain the case even as evidence of Latin American anger with US policies – particularly the intervention in Guatemala – continued to proliferate.88 It was a point that Eisenhower would make, early in the new year, during his budget statement to Congress. ‘Latin America, an area with which we have wellestablished trade and investment relations, has a great need for capital for economic development’, the president stated. ‘Nevertheless, if Latin American countries follow a policy of encouraging private investment, domestic and foreign, they should be able to continue to raise the capital needed for further economic growth.’89

CHAPTER 3 CONFRONTING MOSCOW?

The Soviet economic offensive in Latin America and the US response, 1955– 7 On 16 January 1956, just over a year after the culmination of the Rio Economic Conference, Soviet premier Nikolai Bulganin offered to ‘expand diplomatic, economic, and cultural relations, extend technical assistance, and conclude training arrangements with Latin American nations’.1 The Soviet Union, he told a reporter from Pravda the following day, ‘stands for the development of trade with countries of Latin America on the basis of mutual advantage’.2 It was, by some distance, the most overt attempt by Moscow to extend its influence in the region – and marked a further extension of the approach implemented by the new Soviet leadership after Stalin’s death in 1953, which had seen the Soviets adopt a far more proactive stance to courting the underdeveloped nations of the world. For over a year, in fact, the Eisenhower administration had been wrestling with the problem of how best to tackle this new phase in Soviet policy. Globally, the administration had embarked upon a wide-ranging effort to sharpen the role that foreign aid played in its policy and to more effectively publicise existing efforts in Asia, Africa and the Middle East. A series of lengthy debates over US aid policy illustrated the ongoing struggle between developmental idealism and strategic necessity as many officials accepted that increased levels of aid would be necessary to see off the Soviet threat. It was a tension later captured neatly by Foster Dulles, who told the NSC in April 1957,

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Of course all of us would like to see our economic objectives in the under-developed countries achieved through the use of private capital investment. But some of the most critical of these underdeveloped countries existed under conditions where they will have to be able to see genuine hope of a transformation provided by the West, or else they will turn to the USSR.3 The collision between, on the one hand, the East–West competition over shaping development in the Third World, and, on the other, the struggle of newly emerging nations in the global South to become viable sovereign nation-states provided an urgent context for US discussions over its approach toward the developing world.4 The emergence of the Soviet Economic Offensive (SEO) in Latin America, however, challenged the administration to consider again the relationship between its economic and its strategic interests in the area.5 As Harold Stassen had warned in 1954, the Soviets were using Latin American unhappiness with US economic policies as a tool to undermine Washington’s security interests. The dilemma facing US officials, then, irrespective of how seriously they took the Soviet move, was whether they responded by emphasising strategic considerations and moving to quell Latin American dissatisfaction or whether they continued to hold the line on economic matters. That they chose the latter option was driven, in part, by the fact that it did not take long for the attractiveness of the Soviet offer to unravel: doubts quickly crept in about whether Moscow had the sort of financing and technology necessary to make a significant difference in Latin America, while images of Red Army tanks crushing an uprising in Hungary in November 1956 provided the final blow.6 Nevertheless, it was telling how strong the administration’s stance was on this matter. At no point did they give serious consideration to using economic aid as a tool for combating the Soviet offer. Rather, they sought to reinforce the main points of their policy – and to mobilise inter-American harmony through PR operations – in an effort to demonstrate that the US model of development was right for the area. Prior to this it had been business as usual. The pursuit of long-term development, buttressed by immediate short-term considerations, continued apace; however, crucial questions – such as how the United States would ultimately work toward promoting democracy, whether or

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not sufficient levels of funding were reaching the region, and how Washington could get beyond the belief that its efforts only assisted existing elites – remained unaddressed. By this point, however, and as the example of the SEO demonstrates, US officials had bought into a circuitous form of thinking that made substantial changes in policy highly unlikely. They had accepted, wholeheartedly, the idea that US economic policy could secure Latin America within Washington’s sphere of influence if the right approach was implemented. They had also accepted the fact that this would take time. In the meantime, military pacts and alliances, propaganda, covert operations and support of proAmerican regimes would limit the chances of Moscow obtaining any kind of foothold. This double-edged approach, therefore, was the recommended policy when things were going well. Yet it was also the suggested policy when things were going less well: if the US position was weakening, or if Latin American discontent was seen to be mounting, the response was to tinker with existing policies and implement them more successfully. *** In the annual State of the Union message, delivered on 6 January 1955, President Eisenhower portrayed the Cold War as a battle over the way that people around the world would live their lives. ‘At issue’, he argued, is the true nature of man. Either man is the creature whom the Psalmist described as ‘a little lower than the angels,’ crowned with glory and honor, holding ‘dominion over the works’ of his Creator; or man is a soulless, animated machine to be enslaved, used and consumed by the state for its own glorification. Success, he suggested, lay in a concerted effort that would see free nations ‘maintain and reinforce their cohesion, their internal security, their political and economic vitality, and their faith in freedom’.7 Such sentiments, while familiar, also marked a change. In speeches and public appearances, the administration’s leading figures were now placing far more emphasis on notions of development and the advancement of mankind. The administration had been debating such things throughout the previous two years, of course, but in 1955 they

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started to talk about them in public with greater regularity following the emergence of a new Soviet approach toward courting the Third World. ‘We say to the leaders of the capitalist states’, Nikita Khrushchev (who would go on to become the dominant figure in Soviet politics) announced in India in 1955, ‘let us compete without war’. Adamant that they would not match Soviets offers of largesse everywhere, the Eisenhower administration recognised that it needed to coordinate an effective response to this change in the Kremlin’s thinking. This, in turn, served to clarify some of the thinking that had been taking place over the question of where aid should sit in the administration’s policy.8 Formulating an effective response, however, proved difficult. Encumbered by bureaucratic jostling, debates over military versus economic aid, and a lack of clarity on the extent to which developmental ideals should be abandoned to meet pressing strategic needs, it took the administration much of 1955 and 1956 to determine its approach. One thing that US policy makers were sure of was that, in monetary terms, Soviet offers of aid were unlikely to prove unmatchable. ‘Viewed by quantitative standards’, the CIA explained, ‘the Bloc offers are not significant’.9 It was in lending in sectors that the United States would not that Moscow was likely to make most headway. The growing fear in Washington was that developing nations, particularly those newly liberated from European imperialism, would be impressed enough by Soviet achievements since 1945 to want to imitate them.10 Two conclusions began to harden toward the end of 1955. First, that the US needed to try and back nations that were modernising successfully and not get sucked into aiding lost causes; and second, that Washington could not get drawn into a tit-for-tat pattern of trying to match, or exceed, every offer the Soviets made. Both of these points were set out at a meeting of the NSC, at Camp David, in November. The first point was set out by Defense Secretary Charlie Wilson, who told the meeting that he was troubled by the fact that ‘we had taken on such a “lot of losers” as allies and clients – for example, Korea, Formosa, and Indochina’. Achieving military or developmental goals in countries such as these, he and others argued, was inordinately difficult; they required large amounts of capital just to survive, and were hardly in a position where they could be ushered toward modernity in the near future. The second point was made by Richard Nixon and Foster Dulles, both of whom agreed that the United States would have to think ‘in terms of a

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much larger foreign assistance program’ to forestall Soviet advances. Yet, in doing so, Dulles cautioned, ‘we cannot let ourselves be placed in a position where we can be “busted” by being obliged to meet and cap every Soviet offer of assistance all over the world’.11 Eisenhower subsequently set out his own vision in a letter to Dulles. There needed to be a greater promotion of development efforts, he argued, and a process of ‘long-term economic planning’ needed to be initiated that gave ‘every individual nation a stake in cooperation with the United States’. Ideally, he concluded, this should remain in line with abiding economic principles, but the fact that America was presently struggling to outdo an economy a third as effective as theirs strongly suggested to the president that a greater effort on this front was required.12 He referenced this in his State of the Union soon afterwards, arguing that vigilance on the issue of aid was crucial because the ‘conditions of poverty and unrest in less developed areas make their people a special target of international communism’ and highlighted the ‘need to help them achieve the economic growth and stability necessary to preserve their independence against communist threats and enticements’.13 Yet a tension remained when it came to deciding how much aid was enough to see off the Soviet challenge, and how this could be managed so that recipient nations did not become dependent on it as their main source of income. The danger, George Humphrey suggested to Eisenhower, was that the US could end up maintaining ‘other government-controlled economies in the underdeveloped nations of Asia and Africa’. It was Harold Stassen who, eventually, enunciated the solution that the administration had been inching toward for months: aid should be used to prevent Soviet dominance in areas under immediate threat, but it was crucial that the United States ‘back private enterprise as much as possible in the countries we were assisting’. Theoretically, this was a position that most of the administration could agree upon; in practical terms, however, it posed substantial problems. Perhaps the most pressing of these, Allen Dulles suggested, was that seeing off a crisis in Asia was arguably easier than shaping development. ‘Regrettable as it might be’, Dulles stated, ‘most of the free countries of Asia have such primitive societies and governments that there is no private enterprise which can be developed and supported by US assistance programs.’ Reluctantly, the president agreed with the DCI’s

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assessment. ‘We must try to bring the patient along’, he sighed. ‘We cannot let these Asian nations go down the drain and be swallowed up by the Soviet Union while we are engaged in a campaign to promote the ideals of free enterprise.’ Richard Nixon heartily agreed. While not ideal, he conceded, it might nevertheless mean that ‘we would have to assist in the development of government-controlled enterprise rather than to work with a free enterprise system as we would naturally prefer’.14 Such views required greater budgetary flexibility. Accordingly, in debating a revision to basic national security policy – which would eventually become NSC 5602/1 – calls were made for an optional annual sum of $100 million that could be used in unexpected emergencies. It was a suggestion that received Eisenhower’s wholehearted approval. Nevertheless, it was made expressly clear that this did not equate to an abandonment of the preferred developmental model. Following George Humphrey’s complaint that government-togovernment assistance in the developing world was undermining hopes of ‘setting up free individual enterprise in any of these countries’, Eisenhower responded by noting that the new document could ‘contain language designed to encourage the investment of private capital in the programs for building up the underdeveloped countries. To develop private enterprise in these areas’, he further argued, ‘had always been part of our policy.’15 Congress, however, was not won over by the case set out by the president in March 1956 when he called on them to authorise almost $4.7 billion in mutual security assistance (which was some $1.4 billion higher than the previous year’s total), and to assent to the administration’s recommendation of an annual $100 million fund to be implemented where necessary.16 Both the House and the Senate sought to trim the requested appropriation by substantial amounts: the House’s opening bid was to cut it by $1.1 billion, the Senate countered to within $361 million of the president’s request, before a further round of bartering – featuring the House and Senate Committees on Appropriations, further debates in Congress, and the involvement of the administration – resulted in a final figure that slashed around $1 billion from the figure requested by the White House.17 Despite the battles on Capitol Hill, the administration now had a way forward; and, while far from ideal, it was at least one they could mobilise behind and use to stem Soviet gains in the Third World. ‘We are certain that in this world of

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today you cannot walk off and abandon your friends, see them go down the drain of insufficient food, clothing, shelter, all the rest of it, and not have something bad happen’, Eisenhower explained during a press conference in May.18 The Soviet move to court the developing nations provided a sense of urgency to US officials and led them to reach a decision about what steps they were prepared to take in order to use aid to block Moscow’s advances. As Dulles told George Humphrey, ‘the present Soviet economic offensive requires a general re-examination of our aid programs to determine whether they are as effective as they might be’. Eventually, ongoing discussions would result not just in changes to the Mutual Security Program, but also in the creation of the Development Loan Fund (DLF) as a further mechanism for improving the US role in Third World modernisation.19 Notwithstanding this, however, the administration’s prevailing view as to how economic advancement should take place remained unaltered. A Council on Foreign Relations (CFR) study group clarified the central point. ‘Our main aim is to help promote sound economic development over the long run’, the paper explained; The Russians can gain short run political advantage by the way they handle their development policies and by choosing popular and spectacular projects for aid . . . but it should be countered by other means than manipulating our aid policy. Our interest is in continuing our program and in not being thrown off our stride by what the Russians do.20 The implications of all of this with respect to policy in Latin America are clear. Only if the strategic situation was deemed to be so urgent that immediate efforts were needed to prevent Communist advances would large-scale economic aid be utilised. As the president explained in a speech to Congress, this definition only applied in Bolivia and Guatemala, which he described as ‘special circumstances’.21 Elsewhere, the administration’s economic approach would be fixed on guiding the Latin American countries toward appropriate and sustainable forms of development. This would be unarguably true in 1955 when the central principles of US policy were reaffirmed after Rio, but it would also be highly evident after January of 1956, when the administration

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deliberated over what, if anything, it should do to combat Bulganin’s announcement. *** In Latin America, the period after the Rio Conference saw a hardening of the administration’s view on economic policy. The dissatisfaction that this approach was provoking among Latin American leaders was clearly understood; US officials, though, continued to see this is as evidence of long-standing Latin American impatience over the issue of development. Moreover, it did not take much in the way of good news to bolster the administration’s belief in its policies. Thus, while there was growing evidence that existing policy was only leading to sporadic improvements and, in some cases, had led to further problems, there was enough in the way of support to forestall any serious doubts. More importantly, the administration continued to lay the blame for any failings firmly with the Latin Americans: if private capital was not flooding to the area then it was because local governments and regimes were not doing enough to attract it. In early 1955, for instance, a progress report on NSC 5432/1 noted several ongoing difficulties in inter-American economic relations that were having political consequences. ‘The coming six months’, the report explained, ‘will in all probability be marked by a continuation of present problems in the political and economic fields. In the political field, the principal problem will be to find the means of associating the United States with the aspirations of the peoples of Latin America.’ Economically, the report continued, ‘the United States will continue to be concerned with maintaining economic stability and accelerating economic development’, but would also have ‘to face the desire of Latin Americans to have the US assume a larger share of the financial burden involved in solving their economic problems than the US is willing to bear’. Finally, given the antipathy toward US policies in evidence at Rio, the report strongly recommended that the administration ‘strengthen its effort to increase the use of private investment funds’ as well as ensuring that the promises made at Rio were adhered to.22 Problems were certainly in evidence, in other words, but these were not leading to major difficulties. Indeed, on the most important issue – whether or not there was any possibility of Communist factions coming to power – the outlook was positive. ‘No Latin American government is now Communist

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orientated’, an internal report by the Operations Coordinating Board noted later in 1955, ‘and almost every Latin American government or country is taking some steps against it.’23 The absence of a pressing Communist threat, however, posed a further question for US officials as they evaluated their policy: the extent to which they should encourage democracy to proliferate in the region. In Guatemala, Venezuela and the Dominican Republic, to name just three examples, the Eisenhower administration was supporting regimes that were authoritarian, repressed democracy and overrode the human rights of their citizens. They were reliable Cold War allies, to be sure, but a number of officials recognised that this was not sustainable in the long term.24 The issue was debated at an NSC meeting in February 1955. Noting that the United States ‘was making very good progress in persuading several of the Latin American countries’ – including the allimportant Argentina and Brazil – ‘to adopt sound economic policies’, George Humphrey highlighted the fact that there remained a question mark over what sorts of government the United States was supporting. His personal view, he explained, was that any possibility of Communist movements improving their position, even though unlikely at this point, suggested that the United States ‘should back strong men in Latin American governments’. Secretary of Defense, Charlie Wilson, disagreed. A more pressing requirement, he countered, was to ‘assist in the development of a middle class in Latin America’ as this would provide the base for a longer-term transition to modern economic and political structures. It was Nelson Rockefeller, scion of the famous New York family, Eisenhower’s new adviser on psychological warfare, and somebody who had held a long-standing interest in Latin America, who framed this issue most acutely.25 ‘Dictators in these [Latin American] countries are a mixed blessing’, Rockefeller noted. ‘It is true, in the short run, that dictators handle Communists effectively. But in the long run, the US must encourage the growth of democracies in Latin America if Communism is to be defeated.’ Eisenhower, referencing the president of Portugal, agreed, but he also noted that, while desirable, the spread of democracy would take time to emerge. ‘In the long run’, Eisenhower affirmed, ‘the United States must back democracies.’26 Further conversations, moreover, made it quite clear that expanding democracy was a secondary goal behind fostering appropriate forms of development. Democratic governments without developed economic

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structures would be liable to collapse and provide an opportunity for Communist advancement. It was considered to be far better, then, for economic progress to come first. This was outlined by Vice President Richard Nixon, in his report on a visit to the area to the NSC in March. He was glad, Nixon told the NSC, that ‘our current Latin American policy put such heavy emphasis on private capital and private enterprise’ and confirmed that the evidence he had seen made it clear the ‘policies enunciated by the representatives of the United States at the Rio Conference were the correct policies’. He had been provided with a powerful affirmation of this in his discussions with Rafael Trujillo, the leader of the Dominican Republic. Trujillo, Nixon conceded, was a man whom ‘left much to be desired as a head of state’; nevertheless, he went on, Trujillo had offered his support for US policy by outlining his view that ‘grants and gifts simply made beggars and loafers’.27 It was a view that tallied with the administration’s view, and which fit in with their belief that, by the summer of 1955, progress was at hand. As a further progress report on US policy indicated, the general sense was that, ‘with a few exceptions, the United States has made good progress in carrying out the courses of action outlined in NSC 5432/1’.28 Equally, levels of inter-American trade were still going up: trade worth $3.5 billion flowed in each direction annually, and the financial importance of the US and the Latin American nations to one another had become paramount.29 Concerns that US policies were hindering the strategic situation, though, continued to be evident. Some officials, indeed, continued to call for a shift in aid policy in order that the political situation might be strengthened. The general economic policy being pursued was indeed correct, they argued, but the political benefits that could be accrued by adopting a more forceful stance on providing aid remained worthy of greater consideration. At an NSC meeting in September, several officials – including Stassen and Humphrey, who had previously been at loggerheads over the issue – offered demurrals to the notion that US policy was succeeding. Humphrey, for his part, described it as a ‘Pollyanna report’ and, with Stassen’s agreement and in reference to chronic problems with coffee pricing, said that the ‘situation was not getting better but worse’. More could be done, Stassen and Humphrey argued, to align US policy with Latin American demands. Allowing political rancour to build up could only spell trouble. Humphrey’s

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stance is a surprising one as his argument was entirely at odds with the position he had previously taken. What it does demonstrate, however, is the extent to which the relationship between strategic and economic interests was starting to fracture. Both approaches were deemed to be vital, but they no longer looked quite as complementary to one another as they had previously.30 It was a dilemma that, increasingly, the Eisenhower administration would struggle to resolve. They recognised the validity of the points being made by Humphrey and Stassen, yet they also firmly believed that both of these policies – ensuring the region was within Washington’s sphere of influence with respect to the Cold War on the one hand, and seeking to shape the region’s economic progress in keeping with abiding US principles on the other – were fundamentally correct. If the economic angle could be made to work, however, which the majority of US policy makers continued to believe was eminently possible, the strategic situation could be resolved. This conclusion was laid out in a strategy memo for the Quantico Meetings – a series of consultations set up to prepare the United States for the forthcoming summit with the Soviets in Geneva. Latin America, a position paper suggested, should serve as ‘a demonstration area of US foreign policy’. At this point, the report went on, the administration’s economic policies, while appropriate, were not doing enough to ensure success. Latin American anger, fuelled by a sense that they were viewed as being unimportant, was continuing to cast a pall over inter-hemispheric relations. Furthermore, the level of investment in the region, while substantial, had begun to stagnate and was affecting growth. ‘Progress has not halted’, the report explained, ‘but its rate has fallen sufficiently to change the picture of improvement in per capita living standards . . . to one that is far lower than that upon which we have counted in this country’. Yet, even here, there was a firm belief that a solution was at hand with a few minor amendments to existing policy. ‘There is a considerable and persuasive body of evidence’, the report argued, to suggest that a relatively modest intensification of the attention and effort that we are directing toward Latin America, without great substantive change in existing procedures, might carry their effectiveness over the threshold that marks the division between moderate and spectacular success in the achievement of our aims.

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The economic situation, it continued, could be bolstered by a pledge to extend the levels of private capital heading to the region, which would do ‘much to convince the Latin Americans of the seriousness of our interest in their economic progress’ and would enable the United States to ‘profitably regard Latin America as a demonstration economic area, the continuing of whose growth record is usefully exploitable in the current struggle between political and economic systems for the adherence of the underdeveloped areas’.31 These discussions help to explain why, in spite of concerns about Latin American discontent, the Eisenhower administration remained so committed to its existing developmental policies. As the Soviet attempt to court the Third World increased, so did Latin America’s importance as an area that could, theoretically, be used to demonstrate the efficacy of US policy. This remained true, furthermore, even as US analysts began to recognise that the likelihood of the Soviets expanding their economic offensive to the Western hemisphere was increasing. A National Intelligence Estimate in late 1955, for example, warned that the combination of increased Soviet activity and existing social and economic pressures was liable to ‘subject the inter-American system to new strains and adversely affect political, economic and military cooperation with the United States’.32 Similarly, a report prepared in the Department of the Joint Chiefs of Staff argued, rumours that the Soviets would seek to make a move in the area was evidence of the ‘alertness’ of Moscow to ‘exploit Latin American complaints against American economic policies’.33 These developments were not treated lightly, of course, and US officials were eager to ensure that any Soviet presence was swiftly rebuffed. But the prevailing view remained that the best way of securing the area was to modernise it in accordance with US beliefs. The centrality of this view, not to mention the abiding faith that it could be achieved, was set out in an essay published in the New York Times magazine in October 1955. The author was Adolf Berle, a veteran State Department official in the area, an arch Cold Warrior and someone who, in the years ahead, would write for John Kennedy a bristling critique of Eisenhower’s regional policies. In the essay, Berle noted the growing signs of Latin America’s acceptance of US-style capitalism – signs that, irrespective of ongoing problems, made present policy worth persevering with. ‘You can land at an airport in any Latin-American country, travel and transact

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business in safety, quiet and comfort’, he wrote. ‘Twenty to twenty-five years ago this was not the case.’ Presently, he went on, ‘modern economics is doing tolerably well by the Latin American area’. And though problems continued to persist – such as a disproportionate amount of capital flowing to Venezuela due to its oil resources, and the fact that world commodity prices could collapse at a moment’s notice – Berle was optimistic: The stability of Latin America is still a problem. Present conditions, none the less, are materially better than in previous periods. The disturbing forces of twentieth century industrialism have pushed huge new problems to the fore. But they have also brought in new ideas, new educational currents, economic forces, an international public and international arrangements making for institutions of continuity and order, aimed at meeting the social questions demanding solution. The long-range forecast is for improvement.34 *** The emergence of a more overt Soviet offer to the region, therefore, was not assessed with the sort of alarm evident elsewhere in the Third World. Soviet actions were deemed nefarious and underhand, without question, but they were not viewed as posing a mortal threat to US interests. In their editorial responses to the Soviet offer, both the Washington Post and the New York Times called for a continuation of existing policies. The move, opined the Washington Post, was more of a ‘potential than an immediate threat’ and could largely be nullified if the US helped ‘Latin American countries to diversify their industry and agriculture to the largest possible extent’ and encouraged increased levels of trade between Latin American nations.35 The New York Times, expressing surprise that it had taken Moscow so long to focus on the region, noted its view that ‘we need not feel too concerned’ as, when it came to a developmental showdown, the United States was in a powerful position in the area ‘thanks to geography, our long experience in dealing with Latin-American trade and our huge and growing investments there’. Eisenhower and his advisers, the paper suggested, should stay focused on their longer-term objectives. ‘The worst mistake we could make’, the paper concluded, ‘would be to

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get frightened and forget that our chief mission in Latin America, in a political sense, is to foster democracy.’36 Internally, the administration shared these sentiments. The best way to nullify a Soviet threat, as Henry Holland had argued two weeks before Bulganin’s offer, was to increase the role played by the EXIM Bank in providing funds for developmental purposes and ensuring that these now reached the levels previously promised at the Rio Conference. The US had promised certain levels of investment, Holland told an economic sub-committee, and ‘if we do not live up to this, there will be intense complaints’.37 Bulganin’s offer, not surprisingly, generated a greater sense of urgency on this issue. The day after the Soviet announcement, in fact, Holland urged Foster Dulles and Herbert Hoover Jr to accelerate the lending process. ‘Our whole economic policy in the area is built around this commitment’, he wrote, ‘yet we are clearly failing to keep it . . . the whole problem has been rendered much more acute by the Soviet campaign in the area.’38 Dulles agreed and urged the president of the EXIM Bank to action this request and allay his concerns that existing levels of activity would not be of a ‘volume sufficient to serve as an effective defense against the Russian campaign’.39 Holland also demonstrated a willingness to consider a pricing deal on coffee – something he had previously considered a step in the wrong direction. Pursuing such a measure, he told Dulles, would give the US ‘enormous influence over the reactions of the Latin American governments to the current Soviet diplomatic and economic campaign’. Furthermore, he went on, it would provide Washington with useful leverage without contravening abiding development principles too sharply and enable the United States to demonstrate to any given Latin American country that if she accepts ‘Soviet credits we can quietly diminish or cut off continuing benefits which are more important to her than anything Russia can offer.’40 What this amounted to was the fact that the United States needed to sell its vision of inter-American economic relations more successfully. A progress report produced in March set this point out clearly. ‘The Soviet offensive lends urgency to the need to stimulate among the Latin American governments and people an understanding of the threat posed by international communism and a determination to control it’, the report explained. As such, the US needed to ‘associate the United States with the aspirations of the Latin American people to a greater extent’ and

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counter propaganda ‘portraying’ Washington ‘as the imperialist exploiter of the peoples and resources of the area.’41 In mid-April, the OCB set out a fuller response to the SEO. Largely, this would be based on a reaffirmation of existing policies and principles, and called for more successful public relations efforts in order to bolster inter-American ties and highlight the dangers of siding with Communism. At all times, the report noted, the US should keep in mind its ‘power to weaken communism by strengthening and improving the welfare of Latin American governments and peoples and by drawing closely the political, economic, psychological, spiritual and military bonds of Latin American governments and peoples with the United States and the West’.42 The most effective way of achieving these aims, it was decided, was through high-level presidential involvement with the Latin American countries, and this could be managed most efficiently if Eisenhower participated in a meet-and-greet event in Panama that would enable him, in effect, to ‘visit’ each country in the region. Dubbed the Panama Presidents’ Meeting and due to be held in the summer of 1956 – though the exact date would change for logistical reasons and due to presidential ill-health – the meeting was timed to coincide with the 130th anniversary of the first Pan-American Congress. Prior to Eisenhower’s departure, Secretary Dulles cabled the US diplomatic missions in the Americas and told them to ‘interpret his [Eisenhower’s] presence [in] Panama as evidence [of the] importance US attaches [to] its relations with Latin America’.43 Early drafts of a declaration for the meeting called for an ‘intensification of national and inter-American cooperative efforts to seek the solution of economic problems and to raise the standards of living on the continent’.44 The focus was to be on highlighting the cooperation between the United States and the Latin Americans when it came to the issue of advancement. Such sentiments, US policy makers felt certain, would serve to render Soviet attempts to engineer an opening in the region redundant. It was of the utmost importance, Eisenhower’s briefing notes made clear, that this opportunity was utilised to correct what US officials saw as Latin American misperceptions about Washington’s policy. Ill-feeling had been allowed to develop and too much weight had been apportioned by the Latin American countries to comparing the sums spent by the United States in the region with the amounts spent elsewhere in the

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Third World. Such views, the briefing paper argued, ignored the longstanding closeness of inter-American relations and afforded far too much weight to comparisons of how much was being spent in particular areas. ‘Objectives and results, not primary expenditures, constitute the only realistic basis for comparison of assistance given by us to Latin America with assistance which we give more strategic, and more insecure, areas’, the paper explained. ‘The vast bulk of United States expenditures outside the Western Hemisphere has been largely for emergency and reconstruction objectives. The other American Republics can no more logically reproach us for them than for our stationing of troops in Europe and not in Latin America.’ ‘Every dime’ of US ‘assistance’, it continued, ‘is intended for improved living conditions, larger opportunities, accelerated development. That dime is demonstrably of a more personal benefit to the average citizen in Latin America than a defense installation dollar could be there.’45 Further briefing memos highlighted increases in EXIM Bank activities, the need to improve the climate for private investment in the region, and the possibility of creating a president’s committee that would galvanise the work of the OAS. EXIM loans to the region, for instance, were cited as having increased from 19 new loans between 1948 and 1952 to 110 new loans between 1955 and 1956 (though the financial proportion of these loans compared to those made by the bank overall was not, on average, increasing year-on-year). The potential creation of a presidential committee of the OAS, meanwhile, was pitched as a way of bolstering the organisation’s activities in the social and economic areas, diminishing the ‘effect of the current Soviet campaign’ and providing a ‘forum where solutions to regional economic problems can be sought and undesirable problems combated’.46 The PR opportunities offered by the meeting, therefore, were seen as providing an effective way of nullifying the SEO. Much was made of the president’s determination to attend, for example, despite the fact that he was recovering from a severe bout of ileitis – a crippling form of inflammatory bowel disease – which led to increased media interest in the trip. Eisenhower’s advisers played this aspect up. ‘He’s not completely recovered’, confided James Hagerty, the president’s press secretary in a briefing to reporters, ‘but he wanted to make this trip and take part in these ceremonies.’47

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Notwithstanding this focus on public relations, however, it was also made clear beforehand that the administration would not allow it to become a forum for Latin American leaders to bombard Eisenhower with requests for increased assistance and a change in policy. Recognising that this would prove unpopular, though, Eisenhower travelled to Panama with a proposal in his briefcase for forming an inter-American economic committee. It was specifically designed to allay Latin American complaints about a lack of US engagement with their developmental suggestions and to combat the Soviet move. The new committee, Harold Randall, the US representative to the inter-American Economic and Social Council, noted in a memo outlining the proposal, ‘would constitute a significant deterrent to the current Soviet campaign for expansion of diplomatic and economic relations in Latin America’.48 Such a move was expected to be highly popular. ‘My brother’, gushed Milton Eisenhower in his memoirs, ‘knew his proposal would meet with enthusiastic approval’.49 This expectation proved prescient: the proposal was viewed warmly by the Latin Americans and also served to prevent Eisenhower being engulfed by additional requests for changes in US lending policy. Furthermore, it also adroitly undermined the attractiveness of the Soviet offer by providing a forum in which economic discussions could take place. Buoyed by this enthusiasm, the administration came to see the meeting as a significant success. Writing in his diary, after the meeting had ended, Eisenhower touched upon exactly these sentiments: It was a great success from the standpoint of public relations. Each of the presidents that I met seemed to consider my visit to Panama practically as a personal visit to his particular country. It had, of course, been my hope to inspire this feeling . . . All in all, I would class the meeting as a very successful affair in the promotion of good will.50 As had been the case in Caracas two years earlier, though, the administration’s success in meeting a strategic goal created an economic problem. For in agreeing to the creation of an inter-American economic forum, the administration had given the impression that, in time, further policy changes would be forthcoming. In retrospect, Milton Eisenhower later noted, the new committee was formulated with the

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‘undue expectation that the United States would greatly increase its assistance to Latin America’.51 Nonetheless, events in Panama persuaded US officials that they had seen off the Soviet challenge and, moreover, had done so without dramatically altering their existing economic policies. It was a stance that informed the administration’s public response. In a press conference with American journalists at the US embassy in Panama City, which, it was determined quickly, would only be attributable to ‘American Sources’ rather than a ‘high official’, Foster Dulles presented three key arguments that were intended to serve as the accepted view of the meeting’s accomplishments: that inter-American cordiality and comity had been powerfully restated, that more could be done to build inter-American economic and social partnership, and that there would be no future escalation of US economic assistance. Hemispheric unity, Dulles argued, could serve as a powerful example for other areas of the world who could take heart at the vision of the ‘countries of this hemisphere drawing together not out of fear but because they are building creatively and feel they have common values’. This closeness, he continued, would only be strengthened by the president’s suggestion of an economic committee. It was not ‘healthy’, Dulles argued, ‘to have all of the channels just running to the United States back and forth’ – this was a push for there to be more developmental cooperation that would ‘operate not only in north and south lines but in criss-cross lines as well, throughout the hemisphere’. But, he emphasised, the president’s suggestion did not carry ‘any necessary indication’ that there would be an ‘increase in the actual volume of our aid’.52 US officials were not complacent here; they recognised that the Soviets would, assuredly, try again at some point.53 Without some profound change in US– Latin American relations, however, one which obliterated the extensive financial and commercial links that existed between North and South and fundamentally altered the closeness of the inter-American community, its prospects of success would remain highly limited. Still, success in Panama did not obscure the fact that some more substantive changes in policy were now deemed necessary. This resulted, in September, in a new regional document – NSC 5613/1 – whose creation was far simpler than that of NSC 5432/1. An advance briefing paper, prepared to guide the president through the new document’s main features, summarised them as being:

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A. The Organization of American States is to be strengthened . . . this reflects the President’s proposal for strengthening the OAS made at the recent Panama meeting of the Presidents of the American Republics . . . B. Existing policy relies primarily on private trade and investment in the economic development of Latin America. These activities, particularly trade, are to be pushed more vigorously to forestall Soviet economic penetration.54 Once again, the long-term solution to the problem of the region’s position in the Cold War was believed to lie with economic policy. In discussions held to finalise the new document, Foster Dulles even suggested that military aid might be scaled back in an effort to ease inter-hemispheric tensions and prevent much-needed funds being spent on arms rather than development. Admiral Radford, chairman of the Joint Chiefs of Staff and a hard-line Cold Warrior, strongly disagreed. ‘It would be very dangerous indeed’, Radford countered, ‘to change abruptly our policy of military assistance to Latin America. If we made drastic changes there would be serious repercussions.’ Eisenhower, who saw military equipment as a useful tool in securing Latin American support, sided with Radford. Any such step, he mused, raised the possibility of undoing the progress made at Panama and could provide the Latin Americans with a new axe to grind against his administration. He was also receptive to a suggestion by the Joint Chiefs that more bellicose language should be inserted if, in the future, any Latin American state should prove more receptive to Soviet offers and ‘establish with the Soviet bloc close ties of such a nature as to seriously prejudice’ US interests. That Foster Dulles would choose this moment to raise such a suggestion, however, remains noteworthy and demonstrates the extent to which the developmental thrust was a vital part of US policy.55 Hence, while NSC 5613/1 firmed up the administration’s Cold War stance with respect to the area, it also clearly restated its firm conviction to its existing economic positions. As the new document noted, There are strong nationalist feelings in all of these [Latin] Republics which often are expressed as anti-Americanism. In some countries, this nationalism expresses itself strongly against proposals for the development of natural resources . . . [B]ecause

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the national income of the United States is roughly 8 or 9 times that of the other American Republics combined, Latin America looks to us for assistance and expects that it should be forthcoming . . . some sectors in Latin America complain that our assistance is inadequate. Factors motivating these sectors include political pressure for more rapid economic development, domestic political considerations, and the feeling that any given level of US aid can be increased through complaints. These complaints are often reflected in the argument that the United States accords to Latin American an inadequate proportion of its total foreign aid . . . the desire for more rapid economic progress and higher standards of living is a major political issue in Latin America.56 The impact of the SEO, the document noted, had been to clarify the importance of the administration implementing its economic goals successfully. ‘The Soviet overtures’, the document suggested, ‘serve to emphasize the urgency and necessity of carrying out US policies vigorously, especially loan and trade policies, in order to demonstrate the benefits to be derived from a free private enterprise system and from close relations with the United States.’ In an effort to be seen as increasing US awareness of Latin America’s importance, Washington would also increase the amount it spent in the region. In the financial appendix to the document, the administration’s outlay was projected to rise from $80.8 million in 1955 to $160 million in 1958, with the majority of these further funds being apportioned to military assistance (despite Dulles’s initial words of warning), the construction of an interAmerican highway and improved information service programmes.57 NSC 5613/1 reaffirmed the central principles of the administration’s economic approach. Furthermore, it clearly amplified the prevailing view that economics provided the way in which the United States could ensure that, in the long run, the region remained strategically secure. An OCB report produced in August, though, had also demonstrated the frustration that US policy makers felt with the Latin Americans. Not only were they failing to take the importance of the Cold War seriously enough, but they also held unrealistic expectations about how modern economic systems could be created. As a result, the report noted, it was vital that the United States not just try and export their system to Latin America, as it had ‘taken place under wholly different circumstances’.

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Similarly, certain steps and preconditions – in a foreshadowing of some of the arguments that modernisation theorists would come to make later in the decade – would need to take place before real progress could be achieved. Reforms in Latin American governance and infrastructure, not to mention agriculture, were deemed crucial to any economic improvement. Essentially, though, the general position was unaltered: some progress had been made, but overall success would take time and would only come once US tutelage was implemented more widely. ‘There is no doubt that the accomplishment of any of these goals will be achieved, if ever’, the report concluded, only with difficulty, patience, continuous guidance from the US, and over the long run. No miracles will occur overnight. The Latin American leaders must be educated here to the fact that a network of roads and a few trucks and buses, for example, must come before flashy steel mills are built (and if coal and iron ore are located thousands of miles away they had better never be built). ‘It would be possible to build airplanes at the South Pole’, the report concluded, ‘but they would be very expensive compared to those built in California, and the Latin Americans should remember this fact before they try to copy Pittsburgh or Detroit when they should be trying to copy Kansas or Nebraska.’58 *** The emergence of a more overt Soviet threat to the region in 1956, therefore, had compelled the administration to reassess the appropriateness of its regional policies. As the discussions and policies pursued in 1955 and 1956 made clear, Eisenhower and his advisers continued to see their economic policies as providing the key to long-term success in the region. Political and strategic challenges to that position, moreover, had done little to alter this standpoint. Indeed, the deliberations that took place in the wake of the SEO had led, in economic terms, to one clear conclusion: that it would be foolhardy to alter US policies in an effort to combat Moscow’s move and that a reaffirmation of the existing approach was, by far, the best way forward. It was a point outlined for the president by Foster Dulles in late September 1956, in a report summarising the impact of his brother’s recommendations three years

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earlier. Milton’s report, Dulles wrote to the president, continued to form the bedrock of US policy. ‘That report’, wrote Dulles, ‘has constituted the basis of our policy toward Latin America’.59 Roughly two months after NSC 5613/1 was finalised, the OCB started to produce an outline plan of operations for Latin America to put it into action. In its recommendations for how to bolster the state of inter-American relations, the OCB was expressly clear: The fundamental political instability which exists in the American Republics is a chronic problem and results primarily from internal pressures arising from serious disturbances of the traditional social order by new economic and social forces. Policies intended to promote greater overall stability in each of the American states, therefore, through the growth of sound economic and political institutions along democratic lines based upon free enterprise, should be consistently advocated and supported by the US. Communism posed a risk, the report noted, but only a very minor one at this point in time. Similarly, anti-American sentiments, which were undoubtedly increasing in intensity, were seen as being primarily motivated by ‘domestic political considerations’, the desire for ‘rapid economic development’ and the ‘belief that greater complaints will result in increased US aid’. There was, consequently, no reason for any shift in policy; if anything, the events surrounding the SEO had only strengthened the administration’s existing beliefs. ‘It is a major US policy goal’, the report concluded, ‘to promote the growth of sound, stable economies in this area which will result in an ever decreasing need for American economic aid.’60 Eisenhower made much the same points, albeit in a markedly different tone, during an appearance in Miami whilst campaigning for re-election in October. ‘To the south of us’, he remarked, ‘lies a vast continent with tens of millions of peoples, our physical and spiritual neighbours’: From the first days of this Administration, we have been devoted to strengthening our ties with them; to opening up new avenues of trade between us and them; to establishing a true partnership based on mutual understanding and genuine friendship. Such a

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partnership between North America and Latin America can be mutually profitable beyond any similar one in the world. In conclusion he set out what had become the public face of his administration’s policy: that peace, fostered by US-style development, was the key to a successful future. ‘The American hemisphere’, he argued, ‘must be a neighborhood that is safe and prosperous and happy – at peace, for in a world of peace we can pool our creative intellects, our natural resources, our human energies to the betterment of all who live in both Americas.’61 Within 18 months that policy would face its biggest challenge yet.

CHAPTER 4 YOU CAN'T SPIT ON A FOREIGN POLICY

Appraising the Nixon protests Trapped in his limousine, with rocks, stones and fists crashing against the vehicle, a mounting sense of fear consumed Vice President Richard Nixon during an official visit to Caracas, Venezuela. His wife, Pat, was in a separate car, enduring similar treatment. A full 15 minutes later, as the vice president and his wife feared for their lives, their respective drivers were finally able to escape the protestors and carry them to safety. In a subsequent, and one imagines very fraught, telephone conversation between the US embassy in Venezuela and the Department of State, it was reported that Nixon’s cars were ‘stopped by a roadblock and a mob of some 4,000 people. The mob was made up of ruffians and riffraff and it was in an ugly mood.’ A successful getaway was only possible, it was revealed, ‘due to the arrival of a few troops who with drawn bayonets opened a way for them’.1 Such scenes, it hardly needs saying, were not what the administration had in mind when it scheduled the trip. US officials had foreseen a visit similar to that made by the vice president in 1955 – a trip believed to have been a significant public relations boon. Before Nixon’s departure, in fact, Foster Dulles had expressed the hope that the visit ‘would be of great benefit in the conduct of our relations with all countries of the area’.2 Just a few days before the events in Caracas – even though Nixon had encountered protests elsewhere on his trip – the New York Times had proclaimed that the trip ‘is bound to be a success within the limits

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possible to him’.3 Now, in the aftermath of a very public refutation of that sentiment, the administration was forced onto the defensive. Eisenhower himself, in a very unusual step, travelled to the airport to greet Nixon’s returning plane; White House workers were encouraged to attend in order that they might give a show of support to their beleaguered vice president. A placard on show as he descended the steps of his aeroplane read, ‘Communist cowardice loses – Nixon courage wins’, while bands played and groups of students, Congressmen and cabinet officials cheered his return.4 The proximate cause of the protests in Venezuela was the Eisenhower administration’s ill-judged decision to offer asylum to the recently ousted, and much-reviled, former president, Marcos Pe´rez Jime´nez, and his chief of police. Pe´rez Jime´nez had been popular with the Eisenhower administration as he kept a tight rein on the political situation and was an enthusiastic advocate of the importance of private capital in funding economic progress. His popularity in Venezuela, however, had begun to plummet during this period as his regime cracked down on dissent and rigged a presidential election in 1957. Eventually, in 1958, he had been forced out and replaced by Ro´mulo Betancourt, a much more progressive leader who was, nevertheless, of some concern to US officials who were concerned about his populist agenda.5 But though the protests could be ascribed to specific events in US – Venezuelan relations, the Eisenhower administration took a broader meaning from them: that Latin American anger at US policy, particularly in the economic sphere, had reached a point where it could no longer be contained. This had two consequences. First, it prompted a period of reappraisal among US officials with respect to their regional policies as they believed that the Venezuelan protests were indicative of wider sentiments. Second, it resulted in the administration continuing to believe that the answer to easing interAmerican tensions lay in a more successful implementation of their economic strategy. In other words, the US adopted the explanation of, and solution for, the protests that made most ideological sense to them. Modifications would thus be made to existing policy as officials in Washington considered new ways of securing greater Latin American support for their developmental approach. By the end of 1958, the administration was preparing to implement an amended policy that would raise levels of economic assistance and be more receptive to

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commodity and economic agreements, and which agreed to the creation of a regional lending institution.6 As we shall see in this chapter, their efforts on this front were largely in keeping with developments that had been taking place since the dwindling of the Soviet Economic Offensive in 1956. Between late 1956 and the spring of 1958, in fact, the United States had been implementing small changes in their economic policies in a concerted attempt to court Latin American approval and, in turn, to ensure that the countries in the region became more receptive to their wider developmental stance. At no point, however, did the administration consider renouncing its entrenched economic approach; the changes implemented were intended to bolster the existing policy, not to replace it. This remained true, moreover, in the wake of the Nixon trip. Improvements in interAmerican relations, while undoubtedly slight, did serve to stabilise the situation to an extent. And this, crucially, continued to be where Eisenhower and his advisers believed that success in the region would stem from. Greater problems and levels of discontent were now more in evidence in the region than had hitherto been the case, but officials in Washington continued to hold that the only sustainable way this could be resolved was by sticking to their economic position. *** The Soviet Economic Offensive in Latin America, despite its abject failure, had nevertheless provided regional governments with a useful counterpoint in their attempts to elicit more assistance from Washington. Now, as well as pointing to US largesse in other areas of the world, they could also use Soviet offers as a possible lever. Feelings that the US was neglecting and under-funding the region could not ‘be overlooked’, the OCB’s finalised plan of operations noted in early 1957, ‘since they come into head-on collision with the basis of current US economic policy’.7 The key, then, as the US began preparations for a further regional economic conference in Argentina, was to find a way of alleviating Latin American concerns whilst reinforcing the pre-existing developmental approach. New ideas on this front were generated by the influx of a range of new advisers who would become prominent voices on inter-American issues in the administration’s final years in office. Both George Humphrey and Henry Holland had retired from government service to rejoin the private

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sector, and they would be replaced by a series of advisers less dogmatic on financial issues than their predecessors. Robert Anderson would take over as Treasury Secretary; Roy Rubottom would replace Holland on the State Department’s Latin American desk; and Thomas Mann, Douglas Dillon and Milton Eisenhower would also come to have far more prominent roles in making inter-American policy.8 Though these advisers would offer a series of new ideas, their recommendations were geared toward improving the chances of the administration’s developmental vision being successfully implemented. They were not, in any way, seeking to revolutionise US policy; rather, they were eager to find new ways to achieve existing goals. Mann, for one, was firmly wedded to the idea that private capital should foster development, and that aid should only be given to alleviate potential crises or with strict conditions attached.9 Dillon, the former ambassador to France, also subscribed to the notion that development in Latin America should come about through private capital, precisely because the region was not like other underdeveloped areas. In Latin America, Dillon told an audience in Newark, New Jersey, ‘economic progress has been moving at a faster rate than in any other area of the world’ and was ‘possible because the Latin American countries have in general reached the stage in their development where reliance on such sources of capital is feasible. This is not yet true for many of the countries in Asia and Africa.’10 Rubottom, too, was supportive of existing policies. In testimony to the Senate Foreign Relations Committee, in fact, he launched a stout defence of existing policy, pointing out that the situation in the region was ‘good’ and reporting on ‘the striking economic advance that was being made in most of the countries of Latin America, the amount of trade between Latin America and the US, and US investment in Latin America’.11 The views of these new advisers, then, fit neatly with existing sentiments in US policy. In an economic report to Congress at the start of 1957, for example, Eisenhower highlighted the intrinsic importance of foreign economic policy to America’s general well-being. Success in this area, he explained, had been achieved by encouraging private capital to flow abroad and, when necessary, supporting the use of loans through international lending institutions in an effort to ensure that ‘other nations participate in the growth and prosperity of the free world’.12 Moreover, the Department of Commerce’s annual report on US

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investments abroad highlighted that as US capital investments overseas increased – up to $33 billion by the end of 1956 – Latin America was an ever more important area for US firms eager to expand internationally. In the fields of petroleum, manufacturing and chemical production, in particular, levels of US capital to the area were rising considerably.13 This was of significance when planning sessions for the Buenos Aires Economic Conference began. Preparations for the conference were far less heated than they had been for the previous meeting in 1954. In large part, this was due to the absence of Humphrey and Stassen from the discussions, yet it was also due to the fact that, by this point, Latin America’s place in the wider context of foreign economic policy was more firmly established than had hitherto been the case. Some modifications, however, were deemed necessary in anticipation of the conference. Heading to the Argentine capital with previous promises not having been kept, the administration clearly recognised, would soon lead to difficulties. As the newly installed Roy Rubottom explained to Dulles in May 1957, the United States was certain to come under pressure ‘to offer economic development assistance to this area comparable to that given in other areas of the world’. To avoid this, he continued, the United States should make sure that it did not take steps – such as raising taxes on zinc and lead – that would ‘undermine our argument that grant aid is not required because of the ready access which these countries have to the US market’.14 Douglas Dillon made a similar argument. If it was absolutely necessary to impose further tariffs, he wrote to Dulles, it would be highly desirable for the president to hold off on any ‘public announcement’ until after the Buenos Aires Conference.15 Both Rubottom and Dillon were well aware that the United States was likely to come under considerable pressure at the conference. The problem, Rubottom wrote to Dillon, was the impossibility of ‘our acceding to Latin American demands for money and measures that they say they need for their economic development’, particularly their calls for increased levels of economic assistance. ‘Time and again, for example, the Latin Americans have proposed an inter-American Bank. Our position has been and is that the existing international lending institutions are adequate.’ Nevertheless, he continued, it was crucial that the United States and those lending institutions it had proclaimed as being sufficient appeared to be proactive in dealing with pending financial

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requests. Citing the case of the International Finance Corporation (IFC), which had yet to decide upon any loan requests it had received, including 25 from Latin America, Rubottom stressed the need for greater alacrity. ‘We are not advocating favourable action on any particular application or applications. We would simply urge that, because of the Buenos Aires Conference, the IFC now complete as soon as possible its processing of the applications from Latin America’, he wrote.16 Discussions such as these, though, amounted to little more than tinkering with existing policy in an effort to try and stymie Latin American complaints about the US approach.17 Fundamentally, the basic thrust of US policy remained unaltered. Randolph Burgess, the undersecretary of the Treasury, expressed this during some correspondence with Milton Eisenhower in the spring of 1957. Milton’s previous letter, Burgess wrote on 4 June, ‘encourages me to further reflections on the vital question of encouraging continued investment in Latin America’, while the ‘emphasis on the need of relying strongly on private investment is of course in accord with my own line of approach’.18 In an effort to try and force the issue, the Latin American nations had issued a draft inter-American Economic Agreement that the United States had agreed to discuss. At a pre-conference meeting in the Treasury Department, though, it became clear that a number of officials had ‘very serious doubts’ as to whether the administration ‘should undertake to negotiate’ the agreement. Such indecision as this, Rubottom noted in writing the minutes of the meeting, could prove problematic. ‘We should not hesitate to decide our position and then negotiate it as strongly and as effectively as possible’, he wrote, ‘as it was unlikely that the Latin American countries would be satisfied with another declaration or that it would fulfill our commitment to negotiate for an agreement’.19 Ultimately, the final stance for the conference, as enunciated by the sub-cabinet committee charged with determining the US position, was that it ‘should be the same as at Rio – a strong presentation of the benefits of private investment and free private investment’.20 Dulles and Robert Anderson, the new Treasury Secretary, summarised this for the president. Primarily, they wrote, the conference will focus on the proposed Latin American economic agreement and calls for a new regional lending institution. On the former, the United States would discuss it ‘in good faith’ but look to postpone a decision or settle for a joint declaration rather than anything legally binding; on the latter,

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the United States would ‘oppose’ any attempt to initiate serious discussions over a new financial institution.21 *** When the US delegation arrived in Buenos Aires, then, its instructions were clearly defined: every effort should be taken to encourage the acceptance of US developmental principles, the inter-American economic agreement should be debated, and any attempts to generate momentum for a new lending institution should be vetoed. They were determined to forestall any Latin American attempts to barter them into a shift in policy – an approach that the Washington Post described as being ‘to back the United States into a corner and demand it help them’.22 The tone for the conference, as it had been at Rio, was set by the opening statement by the US Treasury Secretary. Anderson’s tone, unsurprisingly, was less pugnacious than his predecessor’s had been, but the content of his message was strikingly similar. ‘A country achieves material progress by developing its human and material resources’, Anderson stated. ‘History has demonstrated the vital role of the competitive enterprise system in the economic life of our hemisphere’, he announced. ‘Just as truth flourishes best in the climate of political freedom, so in the economic field the system of competitive enterprise promises to yield most in the satisfaction of man’s material needs.’23 It was a speech that the Washington Post would later refer to as having thrown ‘cold water on the conference’.24 The rest of the delegation, however, did demonstrate a willingness to negotiate with their Latin American counterparts on certain issues. Discussions with the head of ECLA, Raul Prebisch, on the possibility of setting up a regional common market, highlighted US flexibility on certain issues. While Dillon was not wholly supportive of the idea he was not wholly dismissive either.25 The same was true with respect to an inter-American lending institution. Though the United States remained firmly opposed to it – a fact Anderson reported to the Cabinet upon his return from Argentina – they did agree to set up a committee to consider the feasibility of setting up such a body.26 They were also prepared to ‘earnestly’ discuss a regional economic agreement (though there was little likelihood of this happening at this point).27 Overall, as historian James Siekmeier has argued, the Conference’s final communique´ ended up ‘reaffirming’ US economic policy, as the

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American delegation ‘refused to accept Latin American proposals and forced the delegates to accept a final treaty that did not in any way alter the status quo’.28 In its judgement the New York Times was particularly critical. What good had come out of the conference, its editorial staff argued, came from the Latin Americans; the United States, by contrast, had conveyed an attitude that suggested they were ‘not prepared to treat them [the Latin Americans] like grownups’ and were still in a position whereby they needed to relinquish the tendency of ‘playing the patronizing rich relative to our Southern neighbours’.29 Among the Latin Americans, meanwhile, the conference was seen as having failed due to the inability to reach an agreement on those matters deemed most pressing.30 Back in Washington, however, the United States took a different view. True, they recognised that the conference had been fractious and could hardly be seen as a roaring success given that the Latin Americans had left Argentina thoroughly disgruntled. On the other hand, they were delighted to have escaped from another inter-American economic conference without having had to agree to any substantial changes in policy. ‘Our delegation faced the delicate task of resisting a series of unreasonable or unacceptable proposals while avoiding a wholly negative attitude and retaining the confidence and respect of the Latin Americans’, one State Department official reported to Dulles.31 A more cynical, though no less apt, appraisal emerged at a meeting of the State Department’s Bureau of Economic Affairs. The Latin American countries, one official opined, ‘have hobby horses they ride and things they want from us and we have nothing we want. It is hard to come to terms when we have nothing to bargain for.’32 Eisenhower, in a public statement on the conference, portrayed it as a success. The final agreement, he stated, was an ‘outstanding statement of the principles and objectives of inter-American economic cooperation’, calling ‘especially for a freer flow of trade, for cooperation on the problems of basic commodities, [and] for expansion of the flow of private and public capital . . . all within the framework of our respective laws’.33 Dillon, too, put forward a rosy view. The conference, he averred before embarking on his flight back to Washington, ‘records and reinforces certain principles which are basic to the inter-American system and which look toward the strengthening of the economies of the participating countries and the improvement of the living standards of the peoples of the Americas’.34

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Perhaps the most enlightening account of the conference, however, came in a press conference between Rubottom and American journalists, in which the State Department official made clear the administration’s determination to portray it as a success irrespective of the views coming from Latin America. After being asked by a reporter whether the conference ‘was . . . a disaster for us’, Rubottom responded by arguing, ‘on the contrary . . . I think we came out of the Conference very well. I think that we consider that the Conference was a success’. When pressed, specifically, on what it was that the conference had achieved, Rubottom noted the candid cut-and-thrust of discussions over regional commodity markets and discussions over inter-American economic matters. His most revealing statements, though, came when he spoke, first, of Latin America’s desire to be economically independent and, second, on the issue of capital investment. On the first of these, Rubottom hailed the fact that Latin America ‘is proud of the position that it has of economic independence, being able to stand on its own feet’. They needed capital, certainly, but they did not want aid. The funding ‘gap’ that is ‘not filled by trade is filled by investment and by loans, and to a very limited extent, where we have bona fide emergencies, by aid’. On the second point, he reaffirmed the view that existing institutions, coupled with the flow of private capital, should prove sufficient to allow the countries in the region ‘to draw on their own resources to build that type of public improvement for the improvement of social services and the like which are considered necessary’.35 *** Though cheered by the outcome at Buenos Aires, US officials remained wary of Latin American attempts to initiate a shift in inter-American economic discussions. As rumours began to circulate in October 1957 that the Latin American nations might make another push for a regional economic agreement, Foster Dulles cabled US missions across the region and informed them that, in the opinion of the State Department, the intention here was ‘to commit the United States to certain policies which [it] is not prepared to accept’ such as stabilising prices of raw materials and providing greater levels of public development funding. Consequently, he instructed US diplomats to ‘take any appropriate opportunity that may be offered to discourage, whether on the part of

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official or private citizens, the thought that an inter-American economic agreement should be expected within the foreseeable future’.36 Evidently, the administration was determined to remain steadfast on its economic position even as Latin American pressure for a change increased. They were also determined to highlight examples of progress that were being made. At almost the same time as he was signing off on the telegram about a regional economic agreement, Dulles gave a speech to the Inter-American Press Association in which he stressed that ‘United States private capital was flowing into Latin America in greatly increasing amounts.’37 Internally, too, efforts were being made to firmly restate the belief that private capital ought to be the main driving force behind regional development. In Buenos Aires, Rubottom wrote to an official at the Department of Labor, the US delegation had simply maintained the traditional and thoroughly justifiable view that both foreign and domestic public capital have an important role to play in Latin America’s economic development, but that foreign and domestic private capital, in our opinion, should carry the main burden of financing and promoting economic development.38 Efforts were also ongoing at a lower level to try and make progress on this front. Thomas Mann, for example, was involved in attempts to make educational efforts in the area more successful. He also offered his support to a woman in Laredo, Texas, who was eager to set up a school that was intended to teach American and Latin Americans the basics of international trade, and suggested that US business enterprises with interests in Latin America might be willing to help fund such a venture.39 Progress on these fronts, though, could not hide the fact that Latin American dissatisfaction was mounting inexorably. As demonstrated in Buenos Aires, one State Department official wrote in October, ‘the Latin American countries feel we take them for granted, and are willing to help all areas of the world except for Latin America’.40 It was a point that Milton Eisenhower picked up on in a letter to Rubottom, in which he advocated using funds derived from PL 480 shipments in Latin America. This, he hoped, ‘would be dramatic, truly helpful, and practical – something that, above all, would change the current thinking in Latin America’.41

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Though nothing came of this – Rubottom’s response, while friendly, was far from enthusiastic – it did point to ongoing attempts in Washington to try and improve inter-American relations.42 Revealingly, US officials remained convinced that much of the criticism they were receiving was unfair and unwarranted – informed more by Latin American over-emotionalism and impatience than by an accurate understanding of global economics. Mann made this point in testimony to the Senate in late 1957. ‘Peoples everywhere’, he stated in direct reference to Latin America, not only demand greatly improved living standards at a time when production increases are hard pressed to keep pace with our extraordinarily high rate of population increase, but they have an inadequate understanding of what is required to increase productivity and the time it takes to accomplish the task. The upshot of this, he went on, was that ‘governments sometimes not only try to shift the onus for past failures to the United States but often they resort to unsound budgetary, fiscal, and monetary policies in the hope of speeding up the development process’.43 Yet, while Mann’s sentiments were widely shared, there was no disputing the fact that officials across the administration recognised that implementing US policy would be easier if hemispheric relations were warmer. Accordingly, on 26 December 1957, Rubottom penned a telegram to Dulles and informed him that, with economic relations remaining tricky, it was vital that efforts were made to improve the situation. Long-standing comity and partnership could undoubtedly be ‘maintained’, he told Dulles, but ‘extra effort will be required. A trip by you to South America at this time would contribute greatly to the cementing of our good relations with Latin America.’44 Rubottom’s suggestion began the process that led to Richard Nixon’s ill-fated tour in the spring. In the meantime, further efforts would be made to try and alleviate Latin American economic problems and improve the chances of the administration’s own stance succeeding. *** A series of problems, it was apparent by the start of 1958, were increasingly coming to hinder Latin American economic advancement. The region as a whole was still too dependent upon exports of one or two

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products; there was a severe lack of available dollars to trade with the United States; balance-of-payments and inflationary problems continued to hinder many nations; and financial inequalities had, if anything, got worse rather than better. Of these, perhaps the most pressing was the lack of gold and dollar holdings, which severely hindered attempts to purchase goods from the developed world and to pay off existing debts. The problem on this front was outlined in a report by the Committee on Latin America, working for the Business Advisory Council (BAC). In real terms, the report noted, levels of gold and dollar holdings had gone up by $511 million; the balance sheet had been skewed, however, by the fact that Venezuela was in credit to the tune of $797 million, much of which was one-off investments in Venezuelan oil companies. The actual situation, therefore, was far more serious than the initial figures suggested. Apart from Venezuela, the author noted, ‘no important Latin American country can be described – either in terms of aggregate gold and dollar holdings or in terms of current accruals – as being in an impregnable position’. This situation, the report continued, was liable to get worse: with financial markets in Europe in decline, and an ongoing recession in the United States, flows of private capital were likely to fall significantly. ‘In these circumstances’, the report concluded, ‘one would have to be optimistic by nature to take a sanguine position on Latin America in 1958.’45 Projections such as these compelled US officials to consider a response. One that soon began to gain increasing favour was for possible US involvement in regional commodity-pricing deals, with coffee being seen as the most logical. Coffee production, both globally and regionally, was reaching saturation point and coffee-producing nations were pressing for a wide-ranging price agreement lest any further falls in its price trigger an economic decline. Previously, the United States had been against such a move; artificial price controls, they argued, simply served as a disincentive for much-needed diversification. But, by 1958, the arguments for it were gaining greater credence as the necessity of ensuring a steady flow of revenue to the area increased. As economic difficulties mounted, protecting coffee prices came to be seen as a potential solution. ‘This product is literally the lifeblood of millions of our friends in Latin America’, Roy Rubottom told an audience in Boca Raton, Florida in early 1958. ‘Whether he be grower or banker, picker or packer, handler or shipper – or the alert government official who knows

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that his office’s budget depends on his coffee – his life is inextricably wound up with the fate of that amazing little bean.’ He stopped short of advocating a pricing agreement, but he did announce that the United States would participate as an observer in a world coffee organisation.46 Rubottom’s concession, while hardly a major shift, demonstrated the administration’s willingness to adopt new measures if they believed it would have economic benefits. With coffee overproduction rife – some five million more bags had been produced than could be sold – there was a pressing need for action. US participation in an International Coffee Organization (ICO), the Business Advisory Council argued in March, would provide a substantial boost: ‘there are many psychological advantages to such a move and few practical disadvantages’.47 Any hope of solving commodity price problems, however, would need more than just Washington’s involvement; serious negotiations and hands-on participation would be necessary if the ICO was to be effective. This would involve working closely with the Brazilians (the nation arguably most affected by the problem) and moving on previously non-negotiable issues like short-term financial assistance and introducing import quota systems. Failure to act, a further report warned, could result in economic meltdown. ‘If the United States continues in its present policy’, it cautioned, ‘sometime in 1958 coffee prices will break to a point where the burden which the Latin American coffee-producing countries have taken upon themselves will be heavier than they can bear.’48 Predictably, though, the situation was not as straightforward as the United States just being able to offer their wholehearted support. The danger of unrestricted American involvement in any such organisation, some officials argued, was that it would undermine Washington’s insistence on fiscal discipline. Agreeing to participate, one State Department report concurred, would undoubtedly have ‘important psychological and political advantages and might in the long run promote needed readjustment between supply and demand’. Even so, it would be vital to ensure that pricing discussions did not convey the impression that Latin American leaders did not need to address their pressing economic concerns. Current requests for economic assistance, the report noted, were geared more toward balance of payments assistance than toward economic development. Little benefit, if any, could be accrued by assisting on this front, and the administration should continue to work to channel private funds to the region and

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encourage international lending institutions to use their resources to break fiscal logjams.49 A similar argument was put forward by John Dreier, Washington’s ambassador to the OAS. Referring to continued Latin American attempts to galvanise support for a regional economic agreement, Dreier argued that the United States needed to decide what, if anything, it was going to do about this. The delaying tactics employed since Buenos Aires, Dreier warned, were starting to wear thin. This, he suggested, left two options: either the United States informed them that they would not sign any agreement and that ‘they might as well stop talking about it’, or they should tell them that they would only sign an agreement that adhered to the principles set out in the final communique´ from Buenos Aires. Of these choices, he concluded, the first was undoubtedly preferable. But, he continued, the Latin Americans ‘dearly love the formalization of principles in treaties’ and, as such, the US should ‘take another look at the possibility of drafting a harmless economic agreement which we could urge the Senate to ratify for purely political reasons’.50 An emerging willingness to consider new policy initiatives, then, only went so far and was not evidence of a decline in the administration’s wholehearted support for its economic vision of the area. A coffeepricing deal might serve a useful political and short-term economic purpose, but it would not alter the prevailing stance on developmental matters. Nixon’s visit to the area, therefore, can be seen as part of this process of limited engagement – whereby the administration continued to try and demonstrate its support for the Latin American countries without giving too much away when it came to economic relations. When protests engulfed Nixon’s motorcade in Caracas, though, US policy makers interpreted it as further evidence of dissatisfaction with their economic policies. *** As he descended the steps onto the tarmac at the airport following his return to Washington, Nixon gave a short speech to those who had turned out to greet him. ‘In Latin America’, he stated, we have an area which is in a state of evolution, and as far as the people there are concerned, they are concerned, as they should be, about poverty and misery and disease which exists in so many

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places. They are determined to do something about it . . . they are moving toward economic progress. And the United States is, and should be, proud to work with them as partners.51 A day later, in a report to the Cabinet, Nixon adopted a different stance – telling the assembled officials that the protests could be attributed to disruptive Communist elements in the region, as demonstrated by ‘the similarity of placards, slogans and techniques’. Foster Dulles concurred and cited Soviet ‘infiltration’, but his brother, Allen, disagreed. Problems in Latin America, the CIA director countered, ‘transcended any possible political manipulation’ and the Agency had found ‘no evidence that Moscow had orchestrated the Nixon incidents’.52 Later, in two further reports, he noted that the protests demonstrated ‘a popular sense of grievance against certain phases of US policy’ and revealed that, of 99 arrests made afterwards, only 12 had links to Communist groups.53 Pointing the finger squarely at the Communists was to be expected given how entrenched the ideological contours of the Cold War were in American political circles by 1958. At the same time, however, the administration’s interpretation cited economic grievances as the underlying cause. Communist elements had been a key part of the protests, a State Department official reported to Dulles, but a ‘number of factors have combined in Latin America to provide a fertile background which the Communists exploit . . . there are numerous alleged or real grievances against the US. Most of these are currently in the economic field.’54 While the situation was undoubtedly one of strategic concern, then, the solution was believed to lie squarely in the area that the administration had been focusing on since 1953. The protests were a regional, rather than a local, problem. So was the proposed solution. On 22 May, Nixon set out a fuller view of the region to the NSC. In doing so, he outlined his sense that one of the key problems the United States faced was the rapid emergence of more democratic governments in an area that, in his view, was not yet ready for such a development. The necessary economic modernisation had not yet taken place and democratic governance in the area would, thus, be subjected to huge instability. Normally, he explained, a move toward democracy would be strongly supported; in Latin America, though, it was a

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problem due to their ‘lacking in political maturity’ and their ‘naive’ perspective that Communists were simply ‘a duly-constituted political party’. Such generalisations, moreover, helped to explain the economic situation. Numerous problems were undermining the region on this front, he stated, the most serious of which was that ‘there existed a Latin American deficit of $1 billion annually in trade with the United States, a deficit which we in one way or another are obliged to make up’. Notwithstanding this rather gloomy appraisal, however, he did not advocate any major changes to existing policy. ‘Generally speaking’, he suggested, ‘what the United States is doing today in Latin America is not subject to very much criticism. Our policies and actions were generally correct, but the problem was essentially more subtle and difficult to solve.’ For the president the main issue was one of semantics, as he pondered whether some effort to ‘rebrand capitalism’ might be necessary as it ‘clearly meant to much of the rest of the world something synonymous with imperialism. We should try to coin a new phrase to represent our own modern brand of capitalism.’55 It was an important meeting that demonstrates, amply, the circuitous logic of US thinking. Progress and stability would be ensured by economic advancement in line with US recommendations; this approach was unpopular because it would take time and require great patience; the Latin Americans were wrong on this front as demonstrated by their immature approach to democracy; and, as protests increased, there was a need for the economic approach to be implemented more successfully. As a result, therefore, the administration was as persuaded in 1958 as it had been in 1953 that the region’s future lay in the successful implementation of US-style economics. This conclusion was set out more sharply by the OCB. ‘Continuing political instability and intensified economic problems in most of Latin America’, it stated, have overshadowed other progress in the political field and have led to increased social unrest. These adverse factors, coupled with increased Soviet Bloc attention to the area, call for prompt effective action to help solve some of the economic problems and to give greater political and psychological emphasis to US policy in the area.

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Propaganda and public relations efforts, though, should be accompanied by a forceful restatement of abiding economic principles. ‘Every opportunity should be taken’, the report urged, ‘to encourage the expansion or adoption of a system of free enterprise . . . each of the other [Latin American] republics should be encouraged to do all in its own power to set its house in order for economic development’, as ‘continued cooperation and assistance from the United States’ may well ‘depend in part on their willingness and ability to cooperate with us in achieving common objectives’.56 While traumatic, then, the events of the Nixon trip had not altered the administration’s view that the answer to their problems in the area lay in a more successful implementation of their economic strategy. A subtle shift had now taken place. Rather than economic development being seen as the way to ensure the region’s security, it was now seen as the most effective response to the steady erosion of inter-American comity. This would lead, in time, to further problems – and eventually to Kennedy’s failed attempt to address this issue in one dramatic gesture. For the time being, however, the Eisenhower administration would continue to seek out ways of ensuring that its existing policies were implemented more successfully. *** Talk of sending Milton Eisenhower on a second fact-finding trip to the region had begun even before Nixon’s departure. But the image of the US vice president being tormented by violent protests raised serious questions in the weeks that followed as to whether this second trip should go ahead. Gradually, the administration came to believe that the president’s brother should return to the region for two reasons: it would provide a public relations boost and demonstrate the administration’s determination to improve inter-American relations on the one hand, and it would initiate a process that allowed the United States to portray itself as proactively responding to the events of the Nixon trip on the other. At an NSC meeting on 18 June 1958, both Eisenhower and Dulles outlined their belief that, somehow, the United States needed to find a way of managing the social and political forces now coursing through the area. For the president, the key problem was nationalism – specifically, the sort of ultra-nationalism that provoked strident

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opposition toward Washington and which saw the acceptance of private capital as betraying a country’s right to develop its own resources. Given the especial force of this movement, Eisenhower asked, why ‘don’t we go to our Latin American neighbors and preach ultranationalism to them, insisting that the goals of their nationalism can only be realized in conjunction with us’. Betraying, as it did, a rather severe misunderstanding of what ultra-nationalist groups were seeking to achieve, the suggestion hung rather awkwardly while some advisers sought to move the discussion in a more fruitful direction. Eventually, Foster Dulles moved things onto the topic of democracy, and set out a more strident critique of its expansion than that put forward by Nixon a few weeks earlier. ‘Certainly in Latin America’, he noted, ‘there had been in recent years a tremendous surge in the direction of popular government by peoples who have practically no capacity for selfgovernment and indeed are like children in facing this problem.’ Rather than following the US model of circumspect democracy – the electoral college system, Dulles believed, was a prudent safeguard against overly hasty enfranchisement of the masses – the Latin Americans were ‘leaping ahead to irresponsible self-government’. As such, Dulles felt that any revision of policy should consider ‘by what means we can move in, take control over, or guide the mass movement toward democracy’.57 Though extremely revealing about prevailing US views of the area, such discussions did not go very far in terms of determining an effective response. By the meeting’s end, the recommended solutions were the rather shopworn ones of greater emphasis being placed on propaganda and public relations, with proposals for a study to examine the tone of Latin American radio broadcasts and greater efforts to court public opinion in universities and the media having been agreed. Nixon, in keeping with the more progressive attitude he had assumed since Caracas, also recommended a mild recalibration of US lending policy so that, in certain circumstances, funding could be provided to complement private investment.58 Consequently, there was a clear need for some sharper definition of a way forward and, as such, the consensus view was that the Milton Eisenhower visit should go ahead. An OCB report produced in June gave a sense of the present malaise when it noted that economic complaints and Communist machinations were having a negative impact on US

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interests. ‘Against this backdrop’, it stated, ‘the report indicates the existence of serious operational problems and the prospect of their growth during the immediate future.’59 Just as importantly, Foster Dulles argued at a State Department discussion in June, was that the United States could not be seen to be afraid of pursuing its policies. ‘It would be extremely damaging’, he explained, ‘to allow Communist demonstrations to prevent high officials of our Government from going to countries of this hemisphere.’ Explaining that ‘he felt very strongly that . . . we just couldn’t run away’ and that ‘he did not like to operate from fear’, Dulles ordered that the trip should take place.60 Later, in conversation with the president’s brother, Dulles told him, ‘I’m concerned for your safety, Milton, but you have to go. We cannot let rabble-rousers dictate how we conduct foreign policy.’61 In spite of the concerns raised beforehand, the Eisenhower trip passed off smoothly and without a hitch. Upon his return to Washington on 1 August, he got to work on crafting a report containing his revised recommendations. Simultaneously, efforts began to close the gap between US policy and Latin American desires. For the first time, the administration declared its willingness to support the creation of a regional lending institution, a move announced by Douglas Dillon on 12 August. ‘At long last’, Dillon told a group of Latin American diplomats, ‘the United States is “prepared to consider the establishment of an inter-American regional development institution which would receive support from all its member countries”.’62 The planned creation of an Inter-American Development Bank (IADB), in truth, was no radical shift: its capital would be limited to $1 billion, and although the day-to-day running would likely be in the hands of the Latin Americans, those officials charged with overseeing the US role were confident that Washington’s influence could be exerted by its 30 per cent share of the say.63 US officials had been aware that this would be a politically popular move since the Rio Conference in 1954, but fears that it would send the wrong message or prove incompatible with existing ideas had been sufficient to dissuade Eisenhower’s advisers from pursuing it any further. The Nixon trip had begun to alter that perception; it was given greater impetus, though, by the call by Juscelino Kubitschek, the president of Brazil, for a regional Marshall Plan that he called Operation Pan America (OPA) – a hemispheric

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declaration to redress existing problems and commit to tackling the region’s underdevelopment. Kubitschek, who had come to power in 1956, saw the fallout from the Nixon trip as providing an opportunity to further his own domestic and regional objectives. The Brazilian leader firmly believed that his grandiose vision for his nation’s advancement could only be achieved in concert with the US. Impressive strides had been made since he took office, but perennial problems – not least high inflation, chronic balance-of-payments problems and a lack of economic diversity – continued to blight Brazil’s development. With outgoings starting to dwarf receipts, increased loans had been taken out to cover the shortfall and, by 1958, the country was approaching a fiscal crisis.64 Eight days after Nixon’s return, Kubitschek signalled his intention to pursue a plan that could restore inter-American harmony.65 In a subsequent letter to Eisenhower he expressed his belief that ‘the ideal of Pan American unity has suffered serious impairment . . . it would be utterly inconvenient and unfair to allow this false impression to prevail’.66 Eisenhower responded warmly. ‘Our two governments’, he wrote Kubitschek, ‘should consult together as soon as possible’ in an effort to start promptly ‘on measures that would produce throughout the continent a reaffirmation of devotion to Pan Americanism, and better planning in promoting the common interests and welfare of our several countries’.67 There was little mention, on either side, of specific policies. Clues as to Kubitschek’s motivations, though, were starting to emerge. In a telling meeting with Roy Rubottom shortly afterwards, Kubitschek drew a direct link between the events of the Nixon trip and the widespread underdevelopment in the region.68 To be fair to Kubitschek, his views on the matter were not entirely dissimilar to those of US officials. As Dulles informed the ambassador in Rio, the two nations agreed that ‘economic development can strengthen [the] ability of Latin American nations to resist communist subversion and enable them [to] render more effective service to Western cause’.69 Yet Washington soon took a step back once they realised that Kubitschek was not just calling for greater emphasis to be placed on development; he was also advocating a more rapid progression on this front that would be funded by a major new aid programme. On 20 June, Kubitschek gave an address in which he spoke expansively on the links between underdevelopment and increased inter-American disharmony.

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Furthermore, he cast doubt on the capacity of private capital to cure the region’s ills. ‘This is not a question of solving a simple economic situation’, he argued. ‘It is difficult to spread the democratic ideal and proclaim the excellence of private enterprise in the world when in our hemisphere economic and social conditions prevail that lead to statism as a reflex of underdevelopment.’70 The answer, he now made clear, was for a massive aid effort to counter Latin American poverty. The US response was far from enthusiastic and, indeed, Kubitschek’s advisers thought that he might have pushed too hard. Four days later, in a meeting hurriedly arranged between Brazilian ambassador Peixoto and Roy Rubottom, Kubitschek’s representative tried to backtrack. It was the press, he told Rubottom, which had depicted this as a call for a Latin American Marshall Plan. Kubitschek, he went on, merely wanted to ‘create a better US –Brazilian and Pan-American understanding of the importance of the development problem in order [to] improve [the] atmosphere for solution’. In response, Rubottom made it strikingly clear that the United States did not agree with the Brazilian leader’s argument. The United States was well aware of the importance of ‘accelerated development’ in Latin America, he stated, and was ‘willing to review [the] extent to which it can contribute [to] this end’. However, he continued, the speech did not ‘stress the importance of Latin American nations doing their part to more efficiently and effectively marshal their own and foreign private capital resources for development’. After it was suggested that Peixoto clarify Kubitschek’s meaning to the press in order to avoid misunderstandings, the Brazilian ambassador told the waiting gaggle that ‘Kubitschek did not have in mind [a] Marshall Plan for Latin America.’71 In some respects, Kubitschek had succeeded simply by being able to raise the idea and put it out there for discussion.72 Kubitschek, the Mexican ambassador to the OAS told Rubottom, had ‘laid a trap for the US’ by proposing ‘that a high-level meeting be held at which both political and economic questions could be discussed, but then in his speech, after he had received President Eisenhower’s favourable reply, he advocated consideration of only economic questions’.73 Once its economic aspects became clear, however, the Eisenhower administration quickly disassociated itself from OPA. In August, immediately after Milton Eisenhower’s trip and at the same time that US support for the IADB was announced, Foster Dulles travelled to Brazil to

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consult on OPA. In meetings with Kubitschek and Brazilian Foreign Ministry officials, Dulles remained steadfast on the matter of development. ‘It is important that the free world maintain both a rate of growth and freedom for which men will sacrifice’, Dulles told a meeting of Brazilian ministers. ‘Use of government capital should be the exception, not the rule.’74 He repeated these sentiments in a meeting with Kubitschek the following day. Disputing the Brazilian president’s thesis that the threat of Communism could be negated by swifter development, Dulles informed him that he believed that this was an ‘oversimplification’. Communism, he continued, ‘must be opposed “on all fronts and by all means.” The strongest element is faith: the creative power of free men.’75 Before he left, Dulles restated this in a speech to the Brazilian Chamber of Commerce. ‘The economic well-being of a nation always depends primarily on its own efforts’, he stated, ‘and the best the US could do was to help a nation help itself.’76 Though the American press sought to portray the meeting as one between firm friends, Kubitschek was left in no doubt as to what the final US answer on OPA was.77 On the flight back to Washington, in fact, Dulles dictated a letter that rejected Kubitschek’s central thesis. His ideas, Dulles told him, were ‘a little too much mechanistic, as though there were some measurable point which could be achieved and which if reached would enable further development safely to cease’. The United States, he argued, was ‘underdeveloped’ in a certain sense and would continue to strive to become less so. OPA, Dulles continued, should ‘concentrate primarily upon the injecting into this hemisphere of increased determination to evolve peacefully but vigorously in a way which will improve the lot of all men’.78 OPA’s political aspects were highly attractive to the United States and would continue to serve as a touchstone for inter-American cooperation; its economic content, though, had called for much too radical a change in US policy. Worse, this approach had the clear potential, as Washington’s ambassador in Brazil reported, to be taken up by other countries in the region and, as such, the United States needed to ‘convert’ OPA into ‘more acceptable nourishment’.79 In the period prior to the finalisation of the second Eisenhower report, therefore, the administration firmly rejected the opportunity to implement a shift in policy in order to accrue significant political capital in the region. ‘In Latin America’, Douglas Dillon announced in a speech in

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November, ‘we can demonstrate that free peoples can outproduce enslaved peoples and can do so without sacrificing their way of life’.80 By December the Eisenhower report was ready to be sent to the president. Its main recommendations would hew closely to those set out in previous years. Once again, in fact, it called for a strong effort to improve inter-American ‘understanding’ if serious progress was ever to be made. In the United States, he argued, there were serious ‘misunderstandings’ about the region and the problems it faced; in Latin America, meanwhile, they had no real appreciation of the limitations on the US capacity to fund the region’s economic development. Success in the region, therefore, would come in the economic sphere. More capital was needed, he wrote, which meant that the ‘granting of public and private credit must be accelerated’. In a sign of how conventional the report was, though, its most radical suggestion was a call for US support for an Inter-American development institution – the administration’s support of which had been announced by Douglas Dillon four months previously. Beyond this, there was little new or innovative. Indeed, it even contained the familiar refrain of, ‘This problem is largely out of our hands. Private capital cannot be driven. It must be attracted.’ Finally, the report called for a reshaped attitude toward dictators. Washington could still work with dictators, it noted, but it should openly embrace democratic leaders. ‘I recommend that we refrain from granting special recognition to a Latin American dictator, regardless of the temporary advantage that might seem to be promised by such an act.’ It was a move that, while recognising the shifting political patterns in the area, also clearly took its cue from Nixon’s earlier call that democrats be embraced and dictators forced to make do with a firm handshake.81 In practical policy terms, therefore, the Eisenhower report did not change very much. Many of its key economic recommendations, in fact, were already in train before the report was finished. The New York Times captured this point in an editorial on 5 January 1959. The historic closeness of the inter-American relationship was an established fact, the paper argued, and the United States had to find a way of becoming an ‘understanding and nonpatronizing brother to our Latin American neighbours’. This, it went on, is the ‘moral one draws from Dr. Eisenhower. To live up to it we need a little legislation, but mostly a change of heart.’82 ***

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The deliberations and discussions between 1957 and 1958 demonstrate the striking constancy of US economic policies toward Latin America, even during a period of significant drama. Nixon’s traumatic visit to Caracas in particular provided a clear opportunity for the administration to adopt a different track in the region. Had they come out and supported Kubitschek’s OPA wholeheartedly, for instance, they could have immediately secured widespread Latin American support. Indeed, they were not entirely unsympathetic to Kubitschek’s proposals or to Latin American calls for accelerated development. But, even at this point, the administration was certain that the region’s future could only be secured if the right developmental model was pursued. For Roy Rubottom this meant embracing positive developments and implementing small modifications to existing policy. In terms of Latin America, he stated in a speech delivered in Chicago, the United States could ‘look forward with confidence . . . to still higher achievements’.83 More practically, he told Dulles, it required accepting four aspects of Milton Eisenhower’s report: support for the IADB (which was already moving forward), the creation of a council on inter-American affairs, the reinvigoration of the Institute of Inter-American Affairs, and a modified stance toward dictatorships.84 The major challenge for the United States, though, was in providing themselves with enough time to ensure that their recommended approach was able to succeed. A report produced by the OCB in November 1958 clearly expressed this central point, noting that, despite evidence of improved US operations, ‘the underlying political and economic maladjustments in the area which were reported as the problems six months ago remain much the same and are not subject to rapid solution’.85 Time, however, was increasingly of the essence, as events in Cuba were about to demonstrate.

CHAPTER 5 THE CUBAN PROBLEM

Washington, DC, New Year’s Eve, 1958: as the US capital busied itself with preparations to see in 1959, a meeting convened in Under Secretary of State Christian Herter’s office in the State Department. Herter, who would go onto replace Dulles as the Secretary, as the latter was stricken down by the onset of the cancer that would eventually kill him in May 1959, had been appointed as someone who was believed to be a safe pair of hands when it came to foreign relations. In Latin America, however, he was about to be confronted by a problem of considerable complexity that would have greatly taxed his predecessor. That problem was Cuba, the issue that the meeting had been called to discuss, and where the regime of Fulgencio Batista appeared about to collapse and to be replaced by the insurgent forces led by Fidel Castro. After over two years of bloody guerrilla warfare, Castro’s forces finally seemed close to victory. It was a turn of events that US officials had long been concerned about and now, in late 1958, they met to try and determine what, precisely, they should do about it.1 In the previous 18 months, US policy had swung from outright support of Batista’s government to an increasingly desperate search for a third way between continuing with the status quo and victory for Castro. Most of this meeting in Herter’s office, in fact, focused on clarifying the situation and ensuring that various departments in Washington were working in sync rather than at cross-purposes. But the extraordinary lack of clarity surrounding the US position was also laid bare. Having started the meeting by stating that Batista was unlikely to hold onto power until February – when a planned change of government was due to take

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place – the discussion concluded with the revelation that the Cuban president had already flown his family out of the country and that he himself had a plane ready to depart for a life of exile in the Dominican Republic within 24 hours. Just a few hours later, with Washington still wholly unsure of how it should act, Batista did indeed flee – leaving a power vacuum that, in the coming days, Castro’s rebel movement would successfully fill.2 Charismatic, passionate, and entirely persuaded that the region needed to rid itself of overweening US dominance, Castro quickly became the biggest problem facing Washington in the area after he rode triumphantly into Havana in early 1959.3 The rise of Castroism led, soon enough, to mounting tensions throughout the Caribbean as the United States conspired to remove its former ally, Rafael Trujillo, from power in the Dominican Republic in an effort to solicit Venezuelan support against the new Cuban leader. Over the course of the next two years, the Eisenhower administration would make a series of moves to try and oust Castro and to shore up the problems they now faced in the Caribbean. It was a process that would lead, eventually, to the CIA-backed operation at the Bay of Pigs in early 1961, when a Cuban force trained by the United States launched a disastrous attempt to initiate an insurgency.4 These events, without question, had wider hemispheric implications. US policy makers were understandably concerned that Castro’s example would prove attractive to other Latin American nations; if other Latin Americans leaders saw something to admire in his approach, they worried, then US dominance would be eroded and hopes of encouraging adherence to Washington’s economic model would be undermined.5 Castro’s revolution was not in and of itself a clear Cold War threat, therefore, but its impact was seen by US officials as having the potential to become one if its influence spread across the region. Some form of resolution, then, was seen as being increasingly urgent. Yet if the potential problem had hemispheric implications, the solution was believed to lie squarely in Cuba and its surrounding environs. Problems in the Caribbean, US officials believed, could be solved in the same area by addressing emergent political issues and tightening security links. To be sure, similar policies would be evident elsewhere, too, as US officials sought to ensure that Latin American leaders took the problem of Communism more seriously and that they were sufficiently equipped to crack down on leftist political movements. But, crucially, this would not

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prompt a change when it came to economic policy. Until its final day in office the Eisenhower administration would continue to hold firm to its belief that long-term success in the area was dependent upon sustainable economic progress, and that this could only be achieved if private capital drove most of the advancement that took place. Some funds and loans could be utilised to clear financial blockages; and new funds – such as that intended to improve social conditions in the area – would be launched to try and arrest emergent difficulties. The overarching goal, however, would remain unaltered as US officials continued to see the region’s path to security and prosperity as lying very much in the sphere of private capitalled modernisation. *** As US observers began to assess the implications of Castro’s revolution, tentative efforts were made to engage the new Cuban leader. By 1959, US companies had some $900 million invested in Cuba; Castro’s approach, meanwhile, raised fears that he might turn Cuba into another Bolivia. After offering diplomatic recognition almost immediately, Philip Bonsal – who had been the ambassador in La Paz during the aftermath of the Bolivian Revolution – was dispatched to be Washington’s new man in Havana. The early indications, however, were far from good. Castro, the embassy explained in February, ‘is reported as attributing Cuba’s perennial economic problems to dictation by US ambassadors’.6 A visit by the new Cuban leader to the United States in April, moreover, provided a platform for him to very publicly renounce the United States and led Richard Nixon to opine that he was either a Communist or very naive about it. It was an inauspicious start and, in the months that followed, US–Cuban relations deteriorated very swiftly.7 If events in Cuba suggested mounting difficulties, though, signs of advancement could be identified elsewhere. This was particularly evident in Brazil, where the construction of a glittering new capital in the interior, Brası´lia, linked via a network of motorways to other major cities, offered significant encouragement that progress was at hand. ‘It won’t be long now’, an article in the Washington Post explained, before the ‘system of highways will probably take on all the flashiness of road signs, gas stations, US type motels, and even hot dog stands . . . millions of people will head up these roads that will lead some to get-rich-quick dreams of boom-town days and others to a very sound future for Brazil’.8

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It was a view, furthermore, that was in line with developments in Washington, where discussions were under way to translate Milton Eisenhower’s 1958 report into a revised policy statement.9 Initial feedback to an early draft started to emerge in January 1959, among the most noteworthy of which came from the State Department, noting that US goals could be achieved more effectively if the new document ‘contains a clear statement of US policies reflecting our national philosophy and way of life’. Washington’s role in the region, the State Department’s comments continued, ‘should be one of guiding and influencing political, economic, and social development’ so that ‘the countries of the region may build sound institutions and a way of life compatible with those in the US’.10 The Department of Defense largely concurred and urged that more be done to inform the Latin Americans that the United States ‘has some things to offer, extending from the abstractions of human dignity, justice, good government and personal freedom, through economic and material success, all of which are better than Sino-Soviet Bloc products’.11 Milton Eisenhower, too, was agreed on the central thrust of these ideas. He went further, however, and called for more radical options to be considered. The United States, he urged, should ‘recognize in deeds as well as words that Latin America has a unique relationship to the US and is as important as any other part of the world’, and should also ‘rigidly limit our military assistance to Latin America and maximize economic assistance . . . and do everything we can to encourage the Latin American countries to devote every available resource to economic development’. At the same time, he noted his concerns at sections outlining the conditions under which the United States would intervene in the region, as any ‘accidental revelation’ of these to the Latin Americans would ‘have an extremely serious effect’.12 Eisenhower’s chief advisers, then, were largely agreed that the problems apparent in recent years in inter-American relations needed to be addressed, and that the most effective way of achieving this was through encouraging greater acceptance of US economic principles and selling the US way of life more successfully.13 Finalising the new document saw only limited discussion about more substantial changes to existing economic policies. The one major element of disagreement on this front came between State and the Treasury over whether or not the administration should sanction trade

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and commodity exchanges between the Soviet Bloc and Latin America. Unlike the spat between George Humphrey and Harold Stassen in 1954, however, the divisions between the two departments were not very substantial and, as both sides agreed during one NSC meeting, the key point was whether the United States could implement its preferred stance without ‘giving offence’. More broadly, there was little enthusiasm for adopting larger changes to existing economic policies. Milton Eisenhower’s suggestion that military aid be trimmed was rejected out of hand, while the president made it quite clear that no extra economic assistance should be channelled to the area and emphasised that they were discussing ‘methods of operation’ rather than any substantial shifts in policy.14 The document that resulted from this process – NSC 5902/1 – therefore only made subtle changes. It contained some important modifications, to be sure, and it stepped up the administration’s commitment to train security forces and forestall the spread of political radicalism. Again, though, both the cause and the cure of the area’s problems were believed to be economic in nature. ‘Latin America’, it noted, had to be considered and approached ‘primarily as an underdeveloped area.’ Growth, at 4 per cent of GDP per annum, was reasonably good, but much of this was being swallowed up by ‘the explosive growth of population’, with the total number of people in the region forecast to grow from 190 million to 500 million over the next 40 years. Moreover, Latin Americans appraised US leadership by their willingness to help foster economic growth in the area, not by their actions in leading the free world against the perils of Soviet and Chinese Communism.15 Nonetheless, the report noted, the situation in Latin America is more favourable to attainment of US objectives than in other major underdeveloped areas. Alone of the underdeveloped areas, it shares our Western cultural, religious, and historical heritage and emerged from European colonialism over a century ago. None of the Latin American nations faces an immediate threat of overt Communist aggression or takeover. Consequently, defence and internal security did not need to swallow up as much of the available capital, and the extra resources could be used to

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‘concentrate constructively on strengthening their economies and political institutions’.16 In terms of objectives, it called for cultivating much greater levels of inter-American harmony and recognising that relations were influenced by a complex set of factors that could not solely be dictated from Washington. Beyond this, however, the main goals had changed little since NSC 144/1 was finalised. True, there was a clearer acceptance that the previous stance on development had been too one-dimensional; the administration, of course, still wanted economic progress to be shaped ‘within the general framework of a free enterprise system’, but it was also now more accepting that this would have to be shaped according to local circumstances and that greater levels of economic assistance (particularly through the IADB) would have to be utilised. However, there had clearly been no sea change in the administration’s thinking and these modifications were no more noteworthy than those introduced in previous documents.17 Given the way that the situation in the Caribbean was starting to concern US officials, this demonstrates the extent to which the administration believed that the problems posed by Castro could largely be solved in that area.18 By March of 1959 NSC briefings were being produced that examined Castro’s desire to exert Cuban influence in the Dominican Republic and Haiti. And following Castro’s tour of the United States in April Christian Herter penned an assessment that noted that despite ‘Castro’s apparent simplicity, sincerity, and eagerness to reassure the United States public’, and irrespective of his appearance of ‘naivete´, unsophistication, and ignorance on many matters’, the administration should wait ‘before assuming a more optimistic view than heretofore about the possibility of developing a constructive relationship with him and his government’.19 US officials, then, saw the situation in Cuba, if left unresolved, as being likely to lead to wider instability, but they also believed that it was within their power to address the situation – as they had previously in Guatemala – and were taking steps to define a separate policy for the Caribbean. Elsewhere, as attested to by the final version of NSC 5902/1, it was business as usual. On 11 September 1959, Raul Castro, Fidel’s brother and an avowed Communist, gave a speech on the central message of the Cuban Revolution. ‘Our revolution’, he proclaimed, ‘has had widespread repercussions in all Latin American countries.’ Furthermore, he argued,

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this went beyond the normal factors – such as geographic proximity, shared language and history – and could be traced to the enthusiasm generated by the image of a rag-tag bunch of passionate revolutionaries defeating a well-trained and well-equipped army. Nevertheless, he went on, this enthusiasm would ‘soon have died down were it not for the fact that Latin American masses are witnessing a political–social –economic revolution which is rooting out historical ills’. The government in Havana, he concluded, ‘is a lighthouse of hope casting its beam over our sister countries’.20 Six weeks later, the Cuban president himself addressed a crowd in the Cuban capital in a speech that, for observers in Washington, provided irrefutable proof of the government’s rampant anti-Americanism. In it, Castro lambasted the United States and issued a stark threat as to what would happen if any steps were taken to remove his government by force. ‘We shall fight those who dare plan the destruction of the revolution’, Castro exclaimed. ‘And we take an oath in the name of the people of Cuba – that is, in the name of you and us – that either Cuba will triumph or we shall all die.’21 Together the two speeches help to illustrate why, by the summer and autumn of 1959, the Eisenhower administration was turning so firmly against Castro’s regime, as fears that his rhetoric would serve as an example for other nations became more central to US thinking. American investors, whose holdings in Cuba had been threatened by the new government’s economic reforms, were exerting pressure on the administration to move against Castro. Within the State Department, moreover, there was a steady growth in the number of advisers seeking to persuade those above them that Castro’s revolution posed a Cold War threat. Views were circulating in Congress, too, which painted a similar picture. Spruille Braden, a firm Cold War hardliner, told one Senate subcommittee, ‘I pray with all my heart, body, and soul, that the Communists and their most useful tool to date, Fidel Castro, may be ejected from their control of Cuba.’ It was, thus, only a matter of time before the administration took the decision to mobilise against Castro’s government and, on 5 November 1959, Secretary of State Herter sent a memo to the president that renounced cooperation and called for ‘permission to begin “a step-by-step development of coherent opposition”’.22 As attitudes toward Castro started to harden, so did the sense that more sustained effort was needed to shore up the Caribbean and to quell

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any damage that the Cuban leader’s anti-American sentiments might be having. Upon arrival in Santiago, Chile, for a meeting of the OAS in August 1959, Christian Herter outlined the sort of thinking that underpinned American concerns about Castro. The atmosphere among the delegates, Herter informed Eisenhower, was one of ‘real seriousness’ due to the situation in the Caribbean. ‘At the very outset’, he continued, the Cubans were ‘insisting that committee meetings be open to the public’ in a move that, if passed, would likely result in ‘considerable demagogic oratory.’23 Such fears were heightened by the fact that the wider Caribbean seemed to be growing increasingly unstable. Of particular importance here was the triangular clash that had emerged between Castro’s Cuba, Rafael Trujillo’s Dominican Republic and Ro´mulo Betancourt’s Venezuela. Driven by the endemic animosity that existed between the leaders, the three nations were, by late 1959, embroiled in a furious diplomatic row that would result, eventually, in Cuban rebels landing in the Dominican Republic to try and lead an uprising; Betancourt and Castro seeking, in different ways, to solicit US and OAS support to remove Trujillo; and Trujillo giving the go-ahead for an assassination attempt against Betancourt.24 With Castro’s government seemingly at the heart of this unfolding chaos, the view that he be removed from office gathered crucial impetus. ‘Cuba was the center of the unrest and presented, in itself, the most serious situation’, Herter told the NSC.25 The tumult evident in the Caribbean, therefore, increasingly persuaded US officials that this was now an area of mounting Cold War importance. ‘I do not know whether the Cuban government is communist’, Roy Rubottom told a Congressional committee, but ‘I would say that it does not make a lot of difference insofar as the treatment given the US because the expressions of anti-Americanism by Premier Castro and others have been so severe that they play directly into the hands of the communists.’26 A first-ever policy document for the West Indies was finalised in early 1960, which sought to ensure that the newly federated nations of the area adopted a pro-Western stance in international politics and proceeded in an ‘orderly’ manner toward full independence. Discussions over redrafting existing policy, meanwhile, saw a significant emphasis on ‘the dangers of the Castro revolution and the inroads the Communist bloc has made into the area’.27

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Nonetheless, while Castro’s regime was seen as having the potential to destabilise other areas of the hemisphere – with the Caribbean undoubtedly believed to be the place most under threat – US officials continued to hold that a change of government in Havana would likely solve this problem. As Piero Gleijeses’s forensic examination of the period leading up to the failed Bay of Pigs invasion in 1961 makes demonstrably clear, this was very much viewed as a Cuban problem that would be solved there and in the Caribbean.28 To be sure, any such move would require hemispheric support and, in turn, a sustained effort to ensure that any action did not incite Latin American anger. Support for non-intervention in Cuba, Herter told Eisenhower in February 1960, remained strong and several Latin American nations made it clear that ‘economic or other reprisals against the island would provoke antiAmerican sentiment.’29 Just as they had when planning the ouster of A´rbenz, then, the United States would need to secure some kind of hemispheric accord.30 Furthermore, committing to a move against Castro would likely require a similar commitment to move against Trujillo. With US officials already concerned that discord in the Dominican Republic could lead to a second Cuba, and with Betancourt adamant that he would only cooperate if Trujillo was dealt with first, the United States felt it had little option but to turn against its erstwhile ally. However, they did not view Trujillo and Castro as two sides of the same coin: Castro was the problem, Trujillo part of the solution.31 Thus the situation in the Caribbean became one that preoccupied US officials in 1959 and 1960. As Eisenhower noted to his Canadian counterpart, John Diefenbaker, in a telegram sent in July 1960, the United States and its allies were ‘facing a very serious situation in the Caribbean’ and addressing it was of ‘very great importance to Western comity’ and could, over time, have ‘a very considerable effect on the future course of events in Latin America and the security of the Western Hemisphere’.32 Allen Dulles offered a similar, if more colourful, appraisal to the NSC in November 1960. ‘“Castro-itis” was affecting Central America and parts of South America’, he explained, and ‘Cuban intrigue’ was likely behind recent disturbances in the region.33 By the time the 1960 presidential campaign between Richard Nixon and John Kennedy was under way, Cuba and the situation in the Caribbean had come to be seen as an effective political tool with which the Democrats could assail the Republicans. In one of their televised

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debates, in fact, Kennedy called Nixon out over the issue and argued, forcefully, that Cuba was presently ‘lost for freedom’ and that a change was needed from existing policies that had ‘ignored the needs of Latin America’.34 What is telling about this train of events, however, is that while relations with Cuba were worsening the administration’s approach toward the rest of the region was continuing to adhere to the points set out in NSC 5902/1. There would be no knee-jerk response to the instability that Castro’s accession to power had prompted. As Washington’s position in the Caribbean continued to grow more urgent, in fact, its economic approach toward the wider region remained unaltered. As NSC 5902/1 was being finalised, however, a prominent challenge emerged from one of America’s foremost columnists. In his widely syndicated newspaper column, Walter Lippmann charged that signs of a greater willingness to utilise foreign aid had arisen for the wrong reasons. It had come about, Lippmann wrote, not because of the ‘principle that the rich have a duty to the poor’, but because this was seen as a way of ‘subsidizing our allies in the Cold War’. This approach, he continued, had been powerfully undermined by Argentine president Arturo Frondizi during a recent visit to the US, during which he called for a more benevolent stance on the issue of aid and action toward combating ‘misery and backwardness’ in Latin America. Prioritising the Cold War over all else, Lippmann suggested, presented the United States ‘in the guise of a great imperial power seeking to buy dependents’. Foreign aid should be utilised, he concluded, borrowing an idea previously made in a speech by Douglas Dillon, but this should be for reasons of morality, not expediency.35 Frondizi’s call, of course, was not unlike that made previously by Juscelino Kubitschek – and, indeed, the sentiments outlined by the Brazilian leader as part of his OPA suggestion were starting to gain greater traction among other Latin American leaders.36 More importantly, Lippmann’s critique was wide of the mark when it came to an area like Latin America where economic aid had been used only sparingly. Indeed, in those cases where it had been used – Guatemala and Bolivia – there were signs that the administration was looking to rein its spending in as the situations there became less critical. In Bolivia, an outbreak of anti-American protest was accompanied by an announcement that the aid programme was being trimmed to make it more ‘economical’

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and to abandon projects that had produced ‘little fruit’. Much the same was true in Guatemala, where almost five years of substantial assistance had done little to usher in modern economic structures or a functioning polity.37 Further evidence on this front could be seen in Eisenhower’s restatement of existing economic principles at a press conference in May 1959. ‘We have, as you know, a very great interest in the . . . economic development of that region’, Eisenhower told the assembled journalists. ‘We have gone into the International Fund, World Bank, recommending greater amounts through which those countries would benefit. We have advocated, and as a matter of fact have been engaged in helping to set up, the Pan-American financial institution with one billion capital.’38 Thomas Mann made a similar point to Latin American delegates to the Committee of 21 meeting in May. US goals in the area, Mann told them, were not predicated on a fear of Soviet expansionism; they were, rather, geared toward the goal of ‘materializing our dream and ideal that America – all of America – may be a region of peace and progress’. The two, of course, could go hand in hand if necessary. But it was telling, even so, that the administration used its dealings with the Committee of 21 to reinforce prevailing views on development: the Committee, it was made quite clear, would not be used as a forum to initiate change in US policies. Further progress, Mann reiterated, was dependent upon Latin American leaders making ‘greater efforts’ toward balancing budgets, lowering inflation, raising taxes and, in the longer term, diversifying their economies, industrialising and adjusting to the global laws of supply and demand.39 It is the planned role of the IADB, however, that most clearly indicates the consistency in the administration’s economic position. The centrepiece of new legislative efforts to repair hemispheric relations, this was an institution that many Latin American leaders had long called for as a necessary tool for galvanising the region’s economic performance. But while publicly the IADB was hailed by the administration and the US press as a substantive change in policy, the bank was nevertheless slated to operate under strict guidelines and criteria.40 On 5 March, the president met for an hour with a group of officials to discuss the new institution. The IADB, the group told Eisenhower, should have ‘relatively modest beginnings’, be run on a top-down basis via a ‘strong role for top management’, source loans from across the free world, and be

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constituted in such a way as to ensure that voting took place on a ‘weighted basis’ depending on which nation contributed the most money (which would be the United States).41 The steadfastness of the administration’s position on this was made even clearer in the final proposal for the IADB. As well as rejecting Brazilian calls to contribute a larger amount of capital – the United States held firm at an initial capitalisation of $1 billion, $450 million of which would come from the United States, whereas the Brazilians had been hoping for $5 billion with $2 billion coming from Washington – the US proposal noted the administration’s reluctance to make the institution ‘too large’ because: (1) our influence over the use of our money once it has been committed will be limited; (2) we do not wish to have the operations of the new institution impinge too heavily upon the Latin American lending activities of the Export-Import Bank and the International Bank; and (3) we are limited by the Budget statement to providing not more than $300 million in new obligational authority at the present time.42 Equally, the administration was determined that it would ‘insist’ upon ‘maintaining our long-standing principles with respect to avoiding excessive competition with private enterprise’ and upon the ‘general use of weighted voting procedures closely related to the value of capital subscriptions by member countries’.43 A study paper prepared by the Council on Foreign Relations noted that the bank’s basic purpose ‘is to promote the economic development of the region along lines that would also foster the integration of markets and economies’. More importantly, the Bank was to operate on two levels: the first, utilising an available capital of $850 million, would be run through a ‘regular banking department’ and would process loans that conformed ‘to accepted banking criteria and practices’ and be ‘repayable in dollars’; the second, with a much smaller capital of $150 million, would be a ‘special fund’ that would ‘finance social overhead projects that are not directly or immediately productive in an economic sense’ and that could be repaid in local currency.44 In his message to Congress asking for the funds to inaugurate the bank, Eisenhower outlined the reasons why he and his advisers believed

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the IADB to be a worthwhile investment. The United States should support the IADB, he argued, because of long-standing inter-American ties, pressing economic problems, and the desire to have a truly interAmerican institution that did not just rely upon the United States.45 Hence, as the Washington Post subsequently noted, the inauguration of the IADB was about pump-priming areas that needed to grow while holding true to abiding developmental principles in a way that would redound to the benefit of all. ‘The important point to bear in mind’, the paper’s editorial staff wrote, ‘is that most of this country’s contribution would come back to United States ports in the form of purchases’ and that, in time, ‘entire new markets will open up for wares from the North American supermarket’.46 Economically, then, the administration’s efforts were continuing to push toward their long-standing objectives. It was a point further demonstrated by US actions in Argentina and Brazil, where emerging financial problems were greeted with a hard-line fiscal approach by US officials. In Argentina, Washington insisted that the Frondizi government reach an accord with the IMF, whose conservative dicta posed political problems for the Argentine leader due to an electorate used to relative prosperity. Requests for greater assistance were summarily rejected as US officials saw an Argentine agreement with the IMF as having the potential to serve as an ‘exhibition to the rest of the hemisphere as the nation determined to stand on its very own two feet’. His position never fully recovered and, in 1962, a further crisis led to the collapse of his government.47 A similar pattern was evident in Brazil. There, in the wake of Kubitschek’s OPA proposal, the US position was one of trying to persuade the Brazilian government to adopt corrective measures advocated by the IMF before any economic assistance would be forthcoming. With Kubitschek unwilling to come to any such agreement, for fear that slowing Brazil’s economic growth would lead to political unrest, an impasse was soon reached. Kubitschek subsequently broke off negotiations with the IMF in an effort to force Washington’s hand; it was a move that, while bold, ultimately had little effect on the US position.48 In response, the Eisenhower administration sought to undermine Kubitschek’s attempts to anoint his own successor so that he might be re-elected in four years’ time.49 The administration’s position was stated clearly by John Moors Cabot, who had returned as ambassador

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to Brazil in early 1959. ‘We [must] not permit Brazil to pressure us into receding from our position regarding balance-of-payments loans’, Cabot wrote in the summer of 1959. ‘Given the present financial policies and conditions in Brazil, a balance-of-payments loan would no good and might even do harm. Brazil must be allowed to “stew in its own juice” unless it’s willing to make financial reforms.’50 Perhaps the fullest appraisal of the administration’s policy, however, came from Thomas Mann during an NSC meeting in May 1959. The Latin Americans, Mann explained, had got off to a rather late start in terms of their economic development. Like our own South, they had long been wedded to an agrarian economy. Thus it was only a few years ago – perhaps ten years ago – that these nations really became interested in achieving the kind of economic development which we in the United States had long enjoyed. Mann’s summary not only cast the entire region as backward and unenlightened; it also portrayed the US approach to development as a success and pinned the blame for continued failings on the Latin American people. ‘The rate of economic growth’, Mann explained, ‘had averaged about 4.5 per cent per annum’ over ‘the last decade’, which should have been enough to sustain it, but it had been rendered less effective by the fact that it had ‘been accompanied by an enormous increase in the population’, which had trebled since 1900 and was due to reach 500 million by the end of the century. Success, Mann went on, could thus only be achieved ‘if we induce the Latin American republics themselves to follow consistent and sound economic policies’ and if the United States persuaded the ‘Latin American republics to realize that economic cooperation was a two-way street and that each must do its part’.51 Developments in this period are crucial to understanding the approach taken by the Eisenhower administration. For while there was little in the way of discernible change when it came to economic policy, more substantive efforts were being taken when it came to regional security and efforts to crack down on local leftist groups. Greater store was being set in military alliances and supplies, regional police forces and intelligence networks were being strengthened, and the United States was working assiduously to ensure that it solicited support against

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the threat that Fidel Castro was believed to pose. However, the key to the region’s future in the mid- to long term was still believed to be economic policy. Indeed, as a report by the OCB noted in the summer of 1959, the basic challenge confronting the United States, which could be addressed through success in the economic field, remained unaltered: It is recognized that, in the next several years, the United States must address itself with a sense of urgency to the key problems which have developed in the course of the accelerated rate of political, social, economic, and attitudinal changes which have been accompanied by rising nationalism, the crystallizing of certain anti-American outlooks, and persistent efforts by the international Communists to precipitate a basic division between the United States and Latin America.52 *** In his State of the Union address in 1959, Eisenhower identified a direct parallel between the works due to be carried out by the newly inaugurated Inter-American Development Bank and the wider effort to use private capital to foster development. The purpose of the IADB, Eisenhower explained, was to ‘join all the American Republics in a common institution which would promote and finance development in Latin America, and make more effective the use of capital from the World Bank, the Export-Import Bank, and private sources’. This vision of fostering development in Latin America, though, was reliant upon political stability and pro-American governments being in power. Absent those, companies would remain tentative about investing. During its final year in office, then, as efforts to resolve the situation in the Caribbean continued, the administration worked tirelessly to improve the tone of inter-hemispheric relations and provide a much-needed boost to its efforts to encourage greater adherence to Washington’s developmental creed. The key elements on this front were, first, a presidential tour of the region in early 1960, and second, the initiation of a Social Progress Fund that was intended to provide funds to tackle widespread poverty.53 Sending Eisenhower to the region on a goodwill visit was part of a more concerted effort on the president’s part to use the prominence of his position to court nations in areas where anti-American sentiments appeared to be increasing.54 Indeed, his visit to Latin America was one

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of a host of international visits that the president carried out during his final 18 months in the White House, as he and Nikita Khrushchev both sought to use personal diplomacy as a way to win hearts and minds.55 Though inter-American relations remained acrimonious, Eisenhower himself was seen as being generally popular in the area. A personal touch had been missing, noted the Washington Post, and ‘the President can do much to remedy this fault’. Nevertheless, the paper cautioned, personal diplomacy could only do so much and ‘was not a substitute for policy’.56 Herein lay a problem, as the administration, as it had demonstrated so clearly since 1958, was only willing to make limited changes in the area in which Latin Americans were most eager to see new initiatives. Following the Santiago Conference in August 1959, for instance, which was convened primarily to tackle the mounting problems in the Caribbean, the administration’s post-conference appraisal again ‘emphasized the obsession of the Latin American countries with economic development’ and highlighted the ‘need for clarification and priorities to guide us and the other countries in connection with the various organizations’ that had been created. When the issue of a potential visit to the region came up for discussion, therefore, the administration was confronted with the perpetual dilemma of how it initiated a new policy without undermining its existing approach. In its attempts to reach a solution, and galvanised by the jarring image of poverty witnessed on the tour, the administration would announce plans for a Social Progress Fund in the summer of 1960.57 Planning for the visit began in December, when the president met with the National Advisory Committee on Inter-American Affairs. In undertaking several high-profile international visits, Eisenhower informed them, he was primarily seeking ‘to talk to leaders in those countries which are right on the perimeter of the Communist world’. He was nevertheless concerned that ‘some of our Latin American friends were resentful of the fact that he had not made a trip there’ and the conversation quickly moved onto the possibility of the president visiting the area. Herter and Milton Eisenhower persuaded him that a short trip could be undertaken and ‘would have symbolic impact throughout the area’. An itinerary was eventually drawn up that would see Eisenhower leave Washington in late February, and spend a week touring round Brazil, Argentina, Chile and Uruguay, with an overnight stop in Puerto Rico at either end.58

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As they had prior to the Panama meeting in 1956, US officials made it abundantly clear beforehand that the trip would not be an opportunity for sustained policy discussions with Latin American leaders. In a telegram sent from the State Department to the embassies in those nations he was due to visit, it was made clear that the president viewed ‘his trip as essentially [a] goodwill mission’ and would ‘keep substantive discussions to a minimum’.59 A month later, in a reiteration of this main point, a further telegram emphasised the fact that ‘the trip will involve no new negotiations’ and that Eisenhower would not ‘make new commitments nor alter present United States policy regarding area problems’.60 Throughout the trip Eisenhower adopted a trenchant line on the issue of development. His aim, he told the American people in a televised speech on the eve of his departure, was to ‘reaffirm to our sister Republics that we are steadfast in our purpose to work with them hand in hand in promoting the security and well-being of all peoples of this hemisphere’. In doing so, he continued, he would make it clear that greater efforts had been evident elsewhere because they were deemed to be in immediate peril. The goal in Latin America, by contrast, had been to engender a successful and enduring model of development and to ‘earnestly seek to help our neighbors in this hemisphere achieve the progress they rightly desire’ by helping them to address problems such as a lack of capital, the need for common markets, and the need to improve structures related to health, education, housing and transport.61 He pursued a similar point in Brazil, telling the Brazilian Congress that ‘heavy reliance must be placed upon the creative talents of the people themselves, with government a helpful partner’. The sort of progress he had witnessed in Rio and Sa˜o Paolo, he told them, illustrated the sort of achievement that could be attained if the right approach was followed.62 Arguably his fullest exposition of this point came in a speech given in Puerto Rico during his trip back to Washington: Many countries of Latin America desperately need long-term financing of their development projects; technical assistance in their planning and execution; escape from dependence on one crop or one mineral; help in balancing budgets and substituting productive work for bureaucratic make-work; an end to inflation and a start on solidly, widely based economics. And their needs

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must be answered soon and effectively. Panacea proposals, facile solutions, will lead only to disillusionment. Above all, any thought of the United States alone developing a so-called master plan for the raising of living standards throughout the hemisphere has been rejected by us and by the leaders of the states I have just visited . . . Obviously the major responsibility for a nation’s development devolves upon its own people, its own leaders. Where this went further than previous iterations, however, was in its linkage of successful development with combating social poverty.63 ‘I visited what was nothing but a rural slum outside of Santiago – thousands of people living in hovels, whose poverty beggared description. But the government gave them a start’, Eisenhower noted, and was helping them to build new homes: Now the point is that all the rest of the work is done by selfhelp. Before work in the morning, after work in the evening, these families do this. The particular project I visited, I believe there were 4,102 cottages, of which about 600 have been developed in the weeks so far past . . . Now here is the point: never have I seen such a happy people, because they were doing this themselves . . . these people are showing what self-respect and pride can be developed out of your ability to do something yourself, with a little bit of help – a helping hand from someone outside.64 It was a model that Eisenhower believed could offer an important new element to his administration’s effort to successfully implement its economic vision. In his final months in office, he and his advisers would prepare and launch a new programme intended to complement the existing strategy: a social progress fund that, Eisenhower hoped, would place the United States firmly behind the desires of ordinary Latin Americans. *** Though he had witnessed some examples of what he saw as the right sort of development in Latin America, Eisenhower had also been taken aback by the widespread poverty that existed in the region. His party had received a firm steer on this front from the Latin American

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representatives they met, who, despite being forewarned that the president would not be willing to discuss a change in policy, nevertheless wanted to see some more decisive action. Most of the commentary from Latin American government officials had been ‘laudatory’, Herter wrote in a memorandum shortly after the trip, but a ‘few had qualified their remarks with the proviso that the high hopes raised should be followed by action to solve the many problems facing Latin America’.65 Similarly, a group of Chilean students had sent a letter to Eisenhower in which they demanded to know his intentions in Cuba and charged that his administration had been ‘insensitive to the poor’ and had done little more than sustain ‘the prevailing social order’. Furthermore, Eisenhower had been troubled by placards in the crowd reading ‘we like Ike; we like Fidel too’.66 Clearly, there was a need for a new policy that galvanised interAmerican relations without sacrificing economic principles. An editorial in the Washington Post immediately prior to his departure had urged that ‘the United States take some large steps toward closing the chasm between wealth and poverty – and that it convince the peoples of Latin America of its genuine concern with their welfare’.67 Eisenhower took up this challenge upon his return home in a televised address in which he noted that the people of the region ‘know that poverty, ignorance, and ill health are not inevitable . . . I assured them that most earnestly we of the United States want them to succeed’. ‘In our discussions’, Eisenhower continued, ‘I stressed that all nations – large or small, powerful or weak – should assume some responsibility for the advancement of humankind, in freedom.’68 Such a move, moreover, could also prove helpful with respect to the situation in Cuba. While US antipathy toward Castro’s regime was growing stronger, few Latin American nations were yet willing to sanction a resolution against him. Some nations, one State Department report noted, were inclined to support the US position due to ‘concern over Castro’s actions’; others, though, had indicated ‘less readiness’ to sign up.69 Efforts to improve this situation were ongoing, Herter told the president, but the concern in the region with regard to Castro had ‘not reached the point . . . which would be necessary for successful action in the OAS’.70 Indeed, as Hal Brands notes, many Latin American leaders, even if opposed to Castro, took the view that it made greater political sense to

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oppose Washington than the Cuban leader.71 A policy that helped to solicit Latin American support on this front, then, would be highly useful. Yet there were any number of ways to try and secure Latin American support and the gradual move toward announcing the Social Progress Fund was far from the most obvious. Indeed, the president could have secured more substantial – and more immediate – support by siding more firmly with Juscelino Kubitschek. For some observers, in fact, this was precisely the sort of approach that should be taken. Senator Wayne Morse, for one, had called openly for more money to be provided. There was nothing wrong in Latin America, he averred, that ‘could not be cured by more loan money, some additional technical assistance and human welfare grant money, and a great deal more sympathetic understanding of Latin American problems’.72 The New York Times made a similar point. ‘The race is between evolution and revolution’, it argued, ‘but evolution cannot be the long, slow process we followed in the United States’ as Castro’s revolution had suggested that there was an alternative way.73 The most sustained critique on this front, though, came in a relatively obscure internal report written by State Department officer John Bell – a mid-range adviser who would, in subsequent years, go onto become the ambassador to Guatemala. Bell’s report, which was part of an ongoing assessment of policy, presented a critique of the administration’s hemispheric policies markedly similar to those that would emerge out of John F. Kennedy’s camp later in the year. By embracing some of the central precepts of modernisation theory, Bell’s report offered a vision of inter-American relations as they would be under Eisenhower’s successor. Military policy, the report began, had been an unmitigated failure and had not brought about a situation whereby the Latin Americans could usefully contribute to hemispheric defence. Far more damning, though, was its assessment of economic relations. Resentment about the fact that Washington had developed ‘closer collaboration’ with the countries of Western Europe and Asia, the report explained, continued to build. More important, however, was Bell’s central finding on this front: Our essential conclusion is that the United States has not succeeded, either politically through the machinery of the OAS, or economically through existing levels or techniques of assistance, to accord to the countries of Latin America the recognition,

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consideration, or treatment commensurate with their partnership status in the Western Hemisphere or with the minimum economic development requirements which arise from an evolving sociopolitico-economic revolution.74 Bell’s report was a coruscating assault on the administration’s economic approach in the area. Social and political upheavals that were now starting to engulf the region, it argued, demanded a significant shift in the methods utilised by the United States. Its central conclusion – other than the suggestion that the United States needed to do more to ‘harmonise’ with ‘Latin American objectives and aspirations’ – was that there needed to be a far more aggressive approach to foreign aid. In countries that were believed to be ‘on the verge of a major economic breakthrough’, the report argued, economic assistance should be utilised to get them over the hump. Long-range country-specific development plans, which would come more heavily into favour under Kennedy, were advocated; so, too, was a greater liberalisation of US trade and import policies.75 Ironically, Bell’s report most clearly demonstrated a crystallising vision of modernisation that would grip the Kennedy administration. It caused barely a ripple among Eisenhower and his advisers – even though some of them would have accepted that, on the economic front, its critique had made some important points. Instead, they remained determined to foster economic growth via their long-standing preferred model, a stance that the launch of the Social Progress Fund clearly reaffirmed. There were two key goals underpinning US efforts to implement this new policy. First was the belief that the fund, if managed properly, could be used as a tool to help persuade reticent Latin Americans that a move against Castro (and, if necessary, Trujillo) could go hand in hand with an ongoing commitment to development. In one of the most obvious linkages on this front, staffers at an NSC meeting in May noted the way that instability in Cuba was slowly changing perceptions about the region and, in turn, affecting economic matters by providing an opening for Sino-Soviet attempts to penetrate the region and undermining attempts to encourage flows of private capital to the area.76 Second, it was immediately evident that this approach was not marking a change in economic policy. Discussions over a draft statement announcing the fund demonstrated this clearly. Though the language in

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the draft address was fairly strident, its touchstones were the familiar ones of progress, fairness, inequality, poverty and human dignity. Eisenhower’s advisers made a number of telling comments. Allusions to the Marshall Plan should be scrapped, they argued, for fear of conveying the impression that this was a programme ‘of far greater size’ than was actually being considered. Similarly, other passages should be amended that ran the risk of ‘arousing exaggerated expectations’. Finally, it was questioned whether or not it was wise for the president to commit himself to launching the fund in Congress’s next legislative session if he didn’t have to.77 On 11 July 1960, Eisenhower announced the fund at a press conference in Newport, Rhode Island. His speech called for ‘such additional public funds as we may deem appropriate to assist free men and neighbors in Latin America in cooperative efforts to develop their nations and achieve better lives’. In recognition of his advisers’ recommendations, though, he also made it quite clear that this was not a hemispheric Marshall Plan or, even, a substantial change in policy. ‘I think it would be unfair’, he explained in response to a journalist’s question, ‘to compare the effort we are now talking about – raising the social and economic standards of the people – with the effort of the Marshall Plan’. Nevertheless, he went on, I do want to say this, which I have said so often: the only real investment that is going to flow into countries that will be useful to them in the long term, is private investment. It is many times the amount that can be put in from the public coffers. And normally, the public loans are made so as to encourage and make better opportunities for the private investments that follow.78 To achieve these goals, Douglas Dillon later informed the president, the administration ‘should move forward with a broad program . . . designed to bring the benefits of economic and social progress to a wider segment of the population’. Likely to involve a sum of $600 million, which would be for programmes spread over a number of years, the initiative should be portrayed to Congress as a scheme that would provide funds in areas not covered by existing arrangements, and which would help to ‘promote the fiscal and tax reform’ that ‘is a necessary prerequisite for successful development’. IADB loans should be used to make the

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majority of payments as they would be ‘in the best position to encourage recipient countries to increase their own efforts to achieve maximum economic growth and social progress’.79 Subsequently, the proposal was taken to the OAS, at an economic conference in Bogota´, and was adopted wholeheartedly with broad regional approval.80 The launch of the Social Progress Fund, then, while illustrating the way concerns over Cuba could modify existing methods, was entirely consistent with the administration’s previous economic approach. Castro, the administration continued to believe, could be dealt with; the bigger problem, which had preoccupied them since 1953, was how to implement their economic policy successfully. Tellingly, even by 1960 the administration continued to see the Latin Americans, rather than their own policy, as the main barrier to success. The Latin Americans, Herter told Eisenhower, ‘are emotional in their desire to work out their own destiny’ but ‘at the same time they think the United States is under an obligation to give them large-scale help’.81 The Social Progress Fund, it was hoped, could help on this front. At an inter-American economic conference in Bogota´ in September, the sense from the US delegation was that the fund had provided a valuable boost. ‘For [the] first time in many years’, Dillon reported to Herter, ‘we seem to have the initiative. Our explanation that [the] new program is additional to economic and industrial development assistance has been most effective.’82 At the end of his eight years in office, therefore, Eisenhower’s central view on the appropriate course for Latin American development remained fundamentally unaltered. In September 1960, just a few months before he ceded the White House to Kennedy, he told the president-elect of Uruguay that he firmly recognised ‘the need for economic growth’ and that he was ‘convinced that private investment for this purpose is more useful than public investment’. The actions of Fidel Castro, Eisenhower concluded, were creating a situation ‘which deters investors from making investments in other countries of Latin America’.83 *** The firm belief that US-style economic progress would prove to be the most successful method of ensuring the region’s long-term security had not deviated one whit from the model set out in NSC 144/1 in 1953. When asked by James Reston of the New York Times to spell out his intentions for the Social Progress Fund, Eisenhower provided an answer

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that was imbued with principles that he, or the majority of his advisers, could have given at more or less any time since 1953. ‘Well, by and large it’s this’, he told Reston, ‘to find better ways of getting a cooperative effort in these nations to bring about the thing they are always talking about – a rise of living standards throughout their nations’.84 Shortly afterwards, he outlined the same sentiments, albeit with more of a flourish, at a luncheon for Latin American delegates to the UN: Gentlemen, our nations are bound together not merely by inescapable ties of geography. We are strong, and we are worthwhile only because we are bound together by things of the spirit . . . we must devote ourselves as a unit to the production of that kind of atmosphere, that kind of situation in the world that will let us progress, with the help of the God in which we all believe, toward a better life, not merely for such people as sit around this table, but for the lowliest peon, the lowliest farmer, the lowliest dweller in Harlem and the East Side toward a better life.85 Clearly, US officials had begun to recognise that further changes might well be necessary in order to ensure that US policy kept up with evolving social and economic trends in Latin America. A redrafted version of NSC 5902/1, finalised in a form that was not wholly satisfactory to the NSC in November, made an initial attempt at explaining this. ‘To rise successfully to the challenge of the 1960s’, it asserted, ‘we must identify ourselves with the fundamental forces of our time and we must adapt ourselves and our policies to the surging pressures for change and progress.’86 In his memoirs, Milton Eisenhower offered an appraisal of this period that cast his brother’s policy as a necessary stepping stone on the road to inevitable success. ‘History’, he wrote, ‘has held these people [the Latin Americans] in bondage – to some extent self-imposed, to be sure – but now that escape from history is at hand, we may witness a miracle of growth and development which will repay us in abundance for all the understanding and resource we ourselves may put into the effort.’87 It was, by any measure, a one-sided and narrow appraisal of the true state of inter-American affairs by the end of the Eisenhower era. At the same time, though, it demonstrated the extent to which the president and his advisers continued to see their preferred approach as being the right one.

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As a consequence of their abiding faith on this issue, however, they had done too little to tackle signs of worsening tensions between their steadfast economic stance and their strategic position. It was that problem, which many observers had identified by late 1960, which the Kennedy administration would seek to redress when it took office. And yet, by doing so, they would come to exacerbate the chronic problems that had been increasingly evident in US strategy.

CHAPTER 6 THE FAILURE OF MODERNISATION

Kennedy and the Alliance for Progress Late in the afternoon on 13 March 1963, two years to the day since he formally outlined the Alliance for Progress (AFP), President John Kennedy met with his National Security Council to discuss the situation in Latin America. By this point his administration’s approach in the western hemisphere, despite the promises made during the 1960 campaign, was in significant trouble. The Alliance had failed to take off as expected and was coming under sustained attack both at home and abroad; in Cuba, meanwhile, Fidel Castro had strengthened his grip on power and continued to blight US officials who had been trying for four years to remove him. The traumatic events of the Cuban missile crisis in the autumn of 1962, in fact, while largely seen as a success for Kennedy against Nikita Khrushchev, had nevertheless demonstrated the inherent limitations on US power in the area as Castro’s position was bolstered by Washington’s pledge not to invade if Soviet nuclear weapons were removed. Indeed, the missile crisis had prompted widespread attempts in the region to bring about a shift in US policy toward the area.1 What was telling about the NSC meeting, though, was that the administration continued to draw a distinction between its difficulties in the Caribbean and those in evidence elsewhere. John McCone, who had replaced Allen Dulles as director of the CIA in the fallout over the failed Bay of Pigs operation in 1961, highlighted the distinctions between

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Cuba and the rest of the region. After being pressed to proffer an opinion during testimony to a Congressional committee, McCone explained, he had ‘told them there was a Cuba problem and a separate Latin America problem’. The goal in Cuba, following the missile crisis, was to ‘get the Soviets out’ and, after that, to remove Castro. Elsewhere, economic issues remained at the heart of US thinking. ‘All of Latin America, minus Cuba’, Treasury Secretary Douglas Dillon stated, ‘was one problem. We are not making as good use of the Alliance resources as we should for political purposes.’ In particular, declining levels of private investment were now undermining US economic strategy, compelling Kennedy to ask ‘whether there was anything we could do to halt the flight of private capital out of Latin America’ and McCone to enquire ‘why the Latin American countries could not do more to protect private investments’.2 The situation in Cuba had, gradually, become an obsession for Kennedy and his advisers, who saw Castro’s continuance in power as sign of failure. If he could just be removed, they believed, the regional situation would automatically improve.3 As a result, the Alliance, which was supposed to be the flagship aspect of the administration’s regional policy, had been pushed to the margins. Remarkably, just two years after its announcement, the administration had moved away from many of its key goals and was reverting to a model much closer to Eisenhower’s. This chapter, then, will examine the reasons for the collapse of the administration’s economic strategy. While the failings in Cuba have been thoroughly examined, and while a great deal of scholarly attention has focused on the administration’s increasing tendency to resort to repression and intervention in tackling emerging strategic difficulties, the reasons why the Alliance for Progress failed to become more of a success is less-well-trodden ground. In spite of its seemingly progressive ideals, modernisation theory soon came to prioritise ensuring political and strategic order over social and democratic freedoms.4 With Cold War stability in Europe leading to heightened tensions in the Third World, moreover, the desirability of backing pro-US regimes increased greatly. That the Alliance ultimately failed, the most comprehensive work on this era has noted, was due to the incompatibility of the highminded idealism of the Alliance with the political and military aggression so redolent of the Cold War. More recently, though, scholars have begun to unpick this argument further and have come to note that,

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in certain countries, Cold War repression and the Alliance were, in fact, two sides of the same coin from the beginning of Kennedy’s presidency, and have argued that there were ‘many’ Alliances for Progress.5 Understanding the short-lived nature of the Alliance’s economic objectives, however, helps us to grasp the enduring nature of the Eisenhower model. For all the pomp and circumstance surrounding its creation, the AFP never initiated the sea change in US economic policy that its key architects claimed it would. Many elements, indeed, struggled to make any headway at all. Changes to existing policy were made, but these lacked structure and coherence and failed to engender widespread enthusiasm among Latin American leaders. Reductive models of what Third World modernisation should look like, in other words, were not easily translated into an effective policy. Lacking structure and shape to start with, and soon beset by problems relating to bureaucratic squabbling and difficulties in extracting funding from Congress, US policy makers’ willingness to entrench a new approach in inter-American economic relations soon began to dissipate. By far the most telling aspect of this is how quickly the administration’s initial faith started to erode and how, when this happened, they began to reach back to Eisenhower’s model and re-emphasise the role that private capital should play as an engine of change in Latin American economies. Though this did not mean the end of the Alliance, the AFP did adopt a very different shape in the years after 1963. In order to examine the impact that the AFP had on US economic thinking toward the region this chapter will consider three main points. First, it will look at the way that modernisation theory – and, in particular, the ideas of Walt Rostow – began to feed into the views that leading Democrats in the late 1950s had of the developing world. By doing so it will demonstrate that modernisation was not forged with Latin America in mind; the reasons why Kennedy and his advisers were so ready to try and implement it there were because it was politically expedient by 1961 and they felt certain that, of all the developing areas of the world, Latin America was the one where Rostow’s approach was most likely to succeed. Second, it will contrast the idealistic rhetoric and ideas that flowed into the Alliance’s announcement with the problems that began to undermine it within just a few months of its launch. Key advisers to Kennedy – such as Rostow, Arthur Schlesinger, Richard Goodwin and Adolf Berle – all set out sweeping visions about what

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US policy could achieve. But they soon encountered substantial difficulties – mostly at home to start with – that made translating it into policy highly difficult. Finally, it will look at how, from mid-1962 onwards, the challenges confronting the administration in the economic and strategic spheres led to increasing calls for greater emphasis to be placed on the role played by private capital. Increasingly, these calls gathered momentum and, by the autumn of 1963, the notion that the Alliance would initiate a transformation in US economic policy in the Americas had largely been abandoned. *** Born into a wealthy Massachusetts family, and drilled by a father determined to see one of his sons as president, Kennedy had a patrician air and sense of entitlement that came from years of mixing in elite social circles and high-end educational institutions. The youngest man ever to assume the presidency, and arguably one of the least healthy, Kennedy surrounded himself with a cohort of like-minded activist individuals who believed in a more technocratic way of waging the Cold War.6 Believing that a mountain of paperwork and arduous bureaucracy had rendered US policy making slow and ineffectual, the Kennedy national security model would be more dynamic and provide the space for a more rapid flow of ideas and suggestions. While it may have led to greater innovation in terms of policy suggestions, however, this model also resulted in a lack of detailed planning and oversight, and a crippling range of bureaucratic disputes.7 A great sense of ambition characterised Kennedy’s run for the White House. Pledges emerged that a Kennedy presidency would see the purported ‘missile gap’ overturned, bring about a move away from Eisenhower’s stale national security strategy, and initiate greater engagement with the Third World. It is the last of these that is most important with respect to Latin America. Kennedy’s goal in the global South, his election platform suggested, was ‘to enable the peoples of these awakening, developing nations to make their own free choices’ by pledging to ‘assure continuity in our aid programs for periods of at least five years’.8 Central to the campaign’s evolving view of development was the flowering relationship between leading Democrats and modernisationists like Walt Rostow. Eisenhower’s rejection of Rostow and

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Millikan’s blueprint for development in the 1950s had led to this relationship developing further. Progressive Democrats, like Kennedy, soon began to see the theories espoused by Rostow as offering a further way both to undermine Republican policies and to transform the appeal of the United States to those nations in the global South. As the possibility of applying modernisation theory to foreign policy took shape, though, Latin America featured only sporadically and only became significant when the region suddenly appeared to have greater political importance.9 Shortly after Rostow and Max Millikan’s 1954 report was republished in 1957 – calling for the creation of ‘stable, effective, democratic societies abroad’ whose interests would ‘parallel’ those of the United States and lead to countries able to move toward modernity without internal political upheaval – Rostow began to liaise with leading Democrats about implementing a new approach.10 The United States ought to be ashamed, Rostow wrote to Adlai Stevenson, for allowing the Soviets to steal a march in the area of foreign aid. Later, he went further, urging Stevenson to call for a $10 billion development fund that would run for at least five years. ‘The situation in Asia, the Middle East, and Africa’, he wrote, ‘is now so bad that something really big and impressive is required, not merely to stop the dry rot in their relations with the United States, but, even more important, to alter the cast and objectives of their domestic policies.’11 He developed this further in testimony to the Senate Foreign Relations Committee in early 1958, a committee that featured Kennedy among its members. The developing areas of the world, Rostow told them, were in a transitional state: from agrarian life and localised hierarchies to modern capitalist society and centralised governments. Washington’s goal, he averred, should be to ‘use whatever influence we can bring to bear to focus the local energies, talents and resources on the constructive tasks of modernization’. This would require ‘an American economic development effort larger in scale, greater in continuity, with criteria for lending vastly less ambiguous (and economically more hardheaded) than our present programs’.12 Much of this, Rostow later conceded, was a matter of emphasis rather than of wholesale change. As he informed Stevenson, many of the things being advocated were already ‘in train’. ‘But direction is not enough. Momentum and scale are required to deal with problems which are upon us or just over the

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horizon.’ The key, Rostow concluded, was to find an ‘alternative to colonialism, as the means of binding together the more developed and less developed nations’.13 Rostow combined all of this in his magnum opus, The Stages of Economic Growth, written following a year’s sabbatical at Cambridge University, in which he sought to provide the definitive rebuttal to Marx. Rostow was candid about the fact that his model had been stretched and pulled in order to make a wider point. ‘I cannot emphasise too strongly at the outset’, he wrote, that the stages of growth are an arbitrary and limited way of looking at the sequence of modern history: and they are, in no absolute sense, a correct way. They are designed, in fact, to dramatize not merely the uniformities in the sequence of modernization but also – and equally – the uniqueness of each nation’s experience.14 Every nation, in general terms, could be placed on a scale that informed the reader how it had reached its present point and, with the eye of faith, what it needed to do to advance further. In terms of its policy recommendations, though, Stages was less revolutionary and, in the main, repeated Rostow’s earlier suggestions. Technology that could boost agricultural production should be utilised, investment worth $4 billion in development should be implemented as this would ‘lift all of Asia, the Middle East, Africa, and Latin America into regular growth, at an increase of per capita income of, say, 1.5% per annum’, and this should be a shared enterprise between the United States – or, more broadly, the West – and elites in the world’s developing nations.15 By squashing and squeezing the course of human history to fit his model, Rostow provided an inaccurate framework for global development. It offered a technocratic answer to the problem of positing an alternative to Marxism, but it was hardly a workable policy blueprint. Instead, as Michael Latham has argued, it provided ‘a particular way of thinking about the postcolonial world’.16 But Rostow’s theory offered ideological solace for those, like Kennedy and his advisers, who wanted to forge a new approach to the developing world. Easily understandable, and theoretically replicable anywhere, the Rostovian model could be wheeled out across the globe. As Kennedy and Rostow

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developed a closer relationship, the likelihood of it playing a part in future US policy became greater. Implementing it, though, as Rostow had learnt from bitter experience in the 1950s, required a proposal that was broader in application – one that could ‘win’ the Cold War and persuade a recalcitrant Congress to pass larger appropriations of aid.17 The global potential of modernisation theory, however, did not just equate to a worldwide policy intended to forestall the Soviets in all areas of the global South. Its appeal in Latin America, for example, was entirely the opposite: development could work there, it was believed, because it addressed the perceived flaws in Eisenhower’s model and the area was largely free from direct Soviet competition. If it could be made to work in Latin America, it would have a greater chance of succeeding elsewhere. *** Kennedy’s campaign team recognised in 1960 that astute positions on foreign affairs could have significant political benefits. Thus, in the same way that they used what appeared to be a more enlightened stance on US– African relations to court African-American voters, so they were willing to use inter-American relations to craft a politically expedient message in those states closest to the region.18 Arthur Schlesinger, who would become one of Kennedy’s closest advisers, noted in his journal, ‘The Kennedy people, wanting to be sure of the suburban Catholics, decided that anti-Castroism was a major means of doing so. They consequently planned to be harder than Nixon on Castro.’19 In states like Florida, Texas, New Mexico, California, Arizona, Illinois and Indiana, Latino voters turned out in significant numbers for Kennedy on election day and he won 85 per cent of Mexican-American votes.20 Given the critical picture of inter-American relations that had been painted during the campaign, it was little surprise that Kennedy made substantial efforts in his first weeks in the White House to portray his administration’s approach as marking a major departure. ‘We have to provide in this hemisphere’, Kennedy argued in a press conference, ‘a better life for the people involved.’21 He made a similar point during his first State of the Union shortly afterwards. ‘Our goal is a free and prosperous Latin America’, Kennedy stated, ‘realizing for all its states and all its citizens a degree of economic and social progress that matches their historic contributions of culture, intellect and liberty.’22

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The new president and his key Latin American advisers – including a mix of New Frontiersmen like Arthur Schlesinger, Rostow, Richard Goodwin, Teodoro Moscoso, and Lincoln Gordon, and a number of older State Department hands like Ed Martin and Thomas Mann – all wanted to bring progress and prosperity to the region. And, like the Eisenhower administration, they believed that development provided the key to closer inter-American relations and an effective and sustainable way of keeping the region firmly within the US sphere of influence. Unsurprisingly, disagreements arose as to how, exactly, this process should take place; but, again like their predecessors, they recognised that any such disputes were over methods rather than goals.23 More practically, there was a sense that, if Rostow’s model was going to be applied elsewhere, it had to be implemented successfully somewhere first. In a memo to the president-elect in December 1960, Rostow argued that ‘it is crucial to the Free World position that the first days of the Kennedy Administration be used for a breakthrough on the question of aid to the under-developed nations’. If this did not happen, he warned, ‘the odds are that we cannot reverse the dangerous course of relations with the under-developed areas’.24 The Western hemisphere seemed to provide an attractive opportunity. The area, Kennedy told one adviser, ‘is not like Asia or Africa. We can really accomplish something there.’25 Arthur Schlesinger pointed this out in a memo in July 1961. Referencing a CIA report that outlined the need for the United States to be at the vanguard of ‘world social and political revolution’, Schlesinger noted that this process could only be led by the United States ‘if its domestic and hemispheric programs can fire the imagination of foreign nations’. Only once all the nations of the Americas could be seen to mirror the United States, Schlesinger went on, will ‘the nations of Asia and Africa accept our leadership’.26 And so, on 13 March, Kennedy formally announced the Alliance for Progress to Latin American diplomats in a specially coordinated event in the East Room of the White House. ‘Let us once again transform the American continent into a vast crucible of revolutionary ideas and efforts – a tribute to the power of the creative energies of free men and women – an example to all the world that liberty and progress walk hand in hand’, he proclaimed. Material progress, political progress, social progress – all, Kennedy averred, should be pursued in the spirit of partnership. Most dramatically of all, this could be achieved in ten years:

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If we are successful, if our effort is bold enough and determined enough, then the close of this decade will mark the beginning of a new era in the American experience. The living standards of every American family will be on the rise, basic education will be available to all, hunger will be a forgotten experience, the need for massive outside help will have passed, most nations will have entered a period of self-sustaining growth, and though there will be still much to do, every American Republic will be the master of its own revolution and its own hope and progress.27 At various points Eisenhower had spoken of the need for similar goals to be met. He had never proposed such an ambitious timescale, however, and pledged that the United States would provide the impetus (and a lot of the funds) for such rapid development. Naturally, the administration was eager to sell this as a dramatic new policy. Richard Goodwin, a precocious speech-writer and a close adviser to Kennedy on Latin America, explained this to State Department official George Ball in February, informing him that ‘we had to think about maximizing the impact on the American States and to do it there should a dramatic overall program’.28 Effectively selling the programme to Congress, meanwhile, as Rostow informed Ball just over a week before Kennedy’s speech, would mean that ‘we will have to dramatize this for the president’ in order to get him ‘off the hook for asking for lots of money’.29 This money was needed, one State Department memo explained, to overcome developmental blockages. The US, the report stated, would have to accept, ‘regretfully’, that ‘US private capital cannot carry the major load of providing US external capital for “sound economic growth”’; agree to ‘finance government-owned enterprise on a government-to-government basis’; ‘streamline lending procedures’; ‘encourage country and regional development plans’; and ‘insinuate ourselves more positively into the development process in Latin America’.30 It could do some of those things, assuredly, but would not be able to do all of them without an infusion of economic assistance. Yet, crucially, this was all done in the expectation of success. Strategic concerns had led to a greater sense of urgency, but the recommended solution – to encourage sustainable economic progress – remained unaltered. Preparatory reports for those officials attending the Punta del

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Este Conference in August 1961, for example – which would provide the forum for hammering out the specifics of the Alliance – noted that there is an enormous potential for economic development and social improvement in the region and that a determined effort on the part of each individual country, strongly supported by simultaneous international cooperation such as is now envisaged, should promote a substantial and sustained increase in the rate of growth of production and social progress that could mark a new era in the history of Latin America.31 Perhaps the clearest outlines of the sort of ambition that the administration had, however, were provided in two reports – one by Kennedy’s task force on the region, the other by Arthur Schlesinger. Both illustrated the change in thinking that now called for a rapid acceleration of the development timetable and the way that the language of modernisation theory had become part of US policy; yet both also illustrated that, as had been the case in the 1950s, economic progress was seen as the ultimate answer to the area’s problems. Kennedy’s task force on the region, headed up by Adolf Berle – whom one scholar has described as ‘almost fanatical’ on the East–West conflict – portrayed the situation as a major Cold War concern.32 Worsening interAmerican relations, the report suggested, had prompted a pressing need for the United States to be more assertive in managing the area’s economic improvement and outlined the need ‘to divorce the inevitable and necessary Latin American social transformation from connection with and prevent its capture by overseas Communist Power politics’. The most important step in setting out the economic approach was to push acceptance of the Act of Bogota´ through Congress. ‘In spite of the slight embarrassment at building on a program initiated by the previous Administration, it should be warmly supported’, the report noted, as it could convert ‘aspirations into reality’ and ‘bring the area within a decade into economic step with the modern world’. While noting that Eisenhower’s policy was widely ‘disliked’, the report conceded that its developmental vision shared several characteristics with what had come previously. ‘We should restate our conviction that private enterprise has a major part to play in effective development’, the report concluded, and ‘give greater relative emphasis . . . to indigenous private enterprise and means to strengthen it.’33

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Schlesinger’s account of a tour of the region in March 1961, while adopting a different tone, nevertheless made similar recommendations.34 Based primarily on what he saw and was told, Schlesinger’s report was built around two inherent assumptions: first, that Latin America was wholly committed to the ‘quest for modernization’, and second, that this would either take place through a middle-class revolution or ‘through a “workers-and-peasants” (i.e., Communist or Peronista) revolution’. The only solution, Schlesinger therefore argued, was for the United States to encourage this middle-class-led shift in Latin American politics, economics and society: To a surprising degree, the slate has been wiped clean of past neglect and error. The atmosphere is set for miracles. There is consequently real danger that the intensity of present expectations may lead to future disappointments – though I am sure that, if the US government comes up with any reasonably developed interest and program, the present mood will continue. Such a conclusion overlooked the existence of deep-rooted interAmerican tensions and downplayed too readily the danger of precipitously raising expectation levels. Nonetheless, Schlesinger argued, political, economic and social reforms could address these issues. At the heart of Schlesinger’s report, moreover, was a call for the United States to alter the way Latin Americans saw their northern neighbours. ‘The Latin Americans tend to regard the United States as a materialistic nation, a paradise of Babbits’, he wrote. ‘We must take every opportunity to show that we do not regard economics as the be-all and end-all of existence. We must make it clear that we are concerned with material abundance, not for its own sake, but to promote the higher aims of culture and civilization.’35 Neither report was exhaustive; nor did they set out a clear step-bystep process that would enable these broad goals to be met. What they did do, however, was to resituate the US faith in its capacity to shape Latin American development within the rhetorical framework of modernisation theory and help Kennedy to clarify his administration’s support for the Alliance. This was a crucial moment of transition in shaping US economic strategy and, furthermore, it enabled the administration to clarify the ways in which it was moving beyond the

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Eisenhower model. Whereas Ike and his advisers had continually rejected calls to utilise a more aggressive aid policy, the Kennedy administration would use US financial power to galvanise Latin American growth and nullify any leftist threat to the region’s security. They were working toward the same goal as their predecessors but using a different method to get there. Over the summer, the AFP was fleshed out in more detail; specific targets for improvement were enunciated, and a start was made on creating the bureaucratic structures necessary to run it. At the conference to discuss the Alliance charter, the Kennedy administration committed to investing $1 billion and to securing $20 billion from various sources over the course of the decade, and set a ‘minimum growth’ target for each Latin American nation of 2.5 per cent as well as encouraging them to ‘define goals for industrialization and popular welfare’. But the gaping holes at the heart of the programme – in terms of management structures, bureaucratic wrangling, political commitment, and wavering Latin American support – meant that the actual process of implementing it would prove far from straightforward. As Latin Americans waited expectantly for a major change in the pace of their development, the Alliance began to stumble.36 This led to two important outcomes: first, the process of pursuing modernisation theory on the ground in many Latin American countries, particularly those where political stability was imperilled, was shaped by local circumstances and a mounting sense of crisis rather than the overarching framework being set out in Washington.37 Second, in the face of emerging problems the Kennedy administration ran into the same debates that had been evident during the Eisenhower era. In particular, debates about the balance of private versus public capital, and whether or not US funds should be used to forestall pressing economic problems in recipient countries, came to the fore. Amid all of this, the administration’s inability to satisfactorily resolve the situation in Cuba began to loom ever larger. *** The situation in Cuba, of course, had provided much of the urgency that now existed. Success there, which the administration believed to be possible, would thus complement efforts in the economic sphere. Accordingly, Kennedy and his advisers, like Eisenhower and his,

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perceived the situation in the Caribbean as being distinct from that elsewhere in the region. Cuba, one early meeting determined, should be ‘isolated’ from the rest of the hemisphere as a response to the ‘Communist penetration’ of Cuban political institutions.38 Hopes for a resolution, though, were pinned on the CIA’s plan to successfully insert a band of Cuban exiles and help them to overthrow Castro. Dissent against the operation was always evident – at no point did the difficulties ever appear to have been adequately addressed, while the late switch of landing site only reduced the likelihood of success – but the voices of those opposed to the operation failed to gain any significant traction against the advocacy of a bullish CIA and the majority of Kennedy’s key advisers. Consequently, in mid-April, the Bay of Pigs operation began and was, from start to finish, an unmitigated disaster. The Cubans knew that the incursion was coming, while the flawed choice of landing zone resulted in the exile force being trapped on the beach and at the mercy of Cuban air power. With Kennedy unwilling to sanction US support, the exiles were abandoned. Coming just over a month after Kennedy launched the AFP, the failed invasion resurrected the spectre of US interventionism and led to widespread criticism from Western Europe, the Middle East, Asia, and countries throughout Latin America.39 Failure in Cuba further compelled the administration to portray events in the Caribbean as being distinct from what was happening elsewhere. (Additional impetus was subsequently provided by events in the Dominican Republic, where the assassination of Rafael Trujillo and mounting political instability increased Kennedy’s determination to make sure that ‘another Castro’ did not emerge.)40 In practical terms, this necessitated action to prevent the Latin American nations using the Caribbean situation as a pretext for pursuing changes in US policy and an attempt to put some distance between the goals of the Alliance and the disarray in Cuba. Kennedy himself demonstrated how this could be done in his first Pan-American Day address, in which, channelling the spirit of Franklin Roosevelt, he highlighted ‘our common faith in freedom and its fulfilment’.41 In an effort to further convey this message, Adlai Stevenson (now Kennedy’s ambassador to the UN) was dispatched to the region in May. Stevenson’s aims, a State Department telegram noted, would be ‘to transform the negative political atmosphere which now

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stems from the Cuban situation’ and ‘stress US determination to move forward with the Alianza Para el Progreso as [the] surest avenue to hemisphere stability and progress and most effective means [to] develop progress with freedom’.42 The point was reaffirmed at a White House meeting shortly before Stevenson’s departure, which noted that the trip’s purpose was ‘not to encourage common action against Cuba or to explain about the Cuban episode’ but was to lay the groundwork for an interAmerican meeting to discuss the Alliance, and to find ways to encourage cooperation toward the AFP’s goals.43 But, if events in Cuba renewed the administration’s determination on the economic front, they did nothing to address the gaps in the proposed programme. Across the rest of 1961, steps were taken to set out the mechanisms for running the Alliance, to begin negotiations with Latin American nations regarding developmental plans, and to secure the funds needed from Congress. From the very beginning, though, as Jeffrey Taffet has detailed, a range of problems encumbered the AFP. Teodoro Moscoso, Kennedy’s pick to run the Alliance, simply did not have enough political power to get things done; Congress, particularly the committee headed by Otto Passman, continually challenged the administration’s funding requests; and lastly, it proved hugely difficult to get the Latin Americans to believe in the idea that this was their programme.44 *** Here, perhaps, we can most clearly see the way that tensions between strategic goals and economic interests had come to exert an influence over US policy. The urgency prompted by the situation in the Caribbean had, in large part, persuaded the Kennedy administration that a more aggressive pursuit of Latin American modernisation was desirable. By accepting this, however, Kennedy and his administration were committing themselves to a task that was largely impossible. As success in the Caribbean remained out of reach, and the Alliance failed to take off in the manner expected, Latin American dissatisfaction increased. Initial faith in the Alliance, meanwhile, was already starting to erode. An early sign of the difficulties that launching the Alliance would lead to came in Adlai Stevenson’s report to the president following his aforementioned trip in the spring of 1961. The opportunities, he noted, were great and there was a clear ‘desire’ for ‘accelerated growth’.

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Nevertheless, he went on, ‘exaggerated expectations’ were rife. ‘Almost every spectacular US gesture toward collaboration with Latin America in the past thirty years’, he went on, ‘has been widely interpreted as the whistle on a gravy train; Alianza para Progreso is no exception.’45 Stevenson’s assessment suggested two problems: first, that the Alliance would be viewed as US largesse, which would cause difficulties when trying to encourage economic reforms; second, that this would lead to the Alliance being equated with Yankee imperialism and prompt a push-back from Latin American leaders. Both proved to be correct. Throughout Kennedy’s presidency, his administration would struggle to galvanise Latin American support for the Alliance and get them to cooperate when it came to drawing up developmental plans and addressing pending economic problems. Equally, his own advisers would remain conflicted as to the necessary balance between public and private capital in shaping Latin American development; once the initial lustre of the AFP began to fade, in fact, those calling for a greater role to be played by private capital gained considerable traction. One of the earliest, and most recurrent, points of dissent came from Luther Hodges, Kennedy’s secretary of commerce and a Southern business conservative who did not ascribe to New Deal theories of stateled development.46 On the same day that Kennedy launched the Alliance, Hodges sent the president a memorandum arguing for ‘a larger contribution by the US private economy to the growth’ of ‘emergent nations’. Hodges’ final recommendation focused on how private and public capital could work in combination: In the broad spectrum of development capital, between unaided private investment at one end and purely public investment at the other, is an area in which private investment will occur only with some degree of government assistance in the forms of loans, incentives and protection against abnormal risks . . . We contemplate that the measures which we recommend will stimulate a greater flow of both aided and unaided private investment.47 Hodges’s suggestion had obvious implications for the Alliance: to what extent was the administration prepared to overhaul the traditional way that inter-American economic relations had taken shape? Any

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attempt to initiate significant changes, after all, would take a long time and require major alterations to existing economic practices. The entire appeal of the Alliance, however, lay in its immediacy and the sense that it marked a fresh start. US officials were aware of these problems. Commenting on a draft plan of guidelines over lunch with an NSC staffer, National Security Adviser McGeorge Bundy noted that the ‘paper seems to say the right things, but if its implementation moves at the same pace as previous programs, we aren’t going to get the necessary mileage’.48 Progress, in Bundy’s view, needed to be swift and substantial. Yet there was also an issue with respect to available funds; US resources, despite the promises made, were not limitless. ‘If the primary test of the Alliance’s success is to be the number of dollars that are made available’, Under Secretary of State Chester Bowles wrote to Dean Rusk, ‘we may end up with every country dissatisfied with its share of our necessarily limited funds’.49 Within a few months of its implementation, therefore, the Alliance began to run into significant difficulties as the gap between rhetoric and reality became ever more apparent. Increasingly, some officials began to argue that the rhetoric used to ‘sell’ the AFP did not equate with a sound or sustainable developmental approach. Private capital still needed to play a prominent role and, in the short term, this perhaps ought to be emphasised more strongly. For Kennedy disciples, such as Schlesinger and Goodwin, this could be equated to the pernicious influence of those who did not buy into the Alliance. A sharper appraisal, however, is that short-term political gain had won out over longer-term economic planning. With progress slow, tensions began to mount as the idealists who had given the Alliance much of its initial force grew unhappy with the way things seemed to have stalled. In September 1961, Richard Goodwin, one of Kennedy’s leading Latin American advisers, penned a plea for greater alacrity. Swifter action, Goodwin wrote to Kennedy, was needed: We cannot raise living standards in a few months, but we can begin on soundly conceived plans and projects; we can work to ensure that some of the Latin American nations show signs of significant self-help and social reform activity; and we can re-shape the procedures and thinking of our Latin American aid personnel. All these things – and especially signs of activity on the part of the

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Latins themselves – are vital if we are to get anywhere with an Alianza fund.50 The looming problem, another official wrote to Goodwin just two weeks later, was that ‘there is serious danger of such slow and ineffectual action . . . as to undermine the program’s effectiveness in Latin America and to jeopardize Congressional support for the program’s continuation next year’.51 Chester Bowles, who had visited the region at Kennedy’s behest in October, offered further pessimism in his report back to the White House. Success, Bowles warned, was likely to prove difficult. Latin American opposition was likely to be ‘more formidable’ than expected due to calls for substantive changes to prevailing economic and political orders. ‘The obstacles to change vary from country to country’, Bowles wrote, ‘but they are all deep-seated and each will be extremely difficult to remove.’ The Alliance could still succeed, he concluded, but ‘a great deal of courage and insight will be required to carry it out’.52 Nor, troublingly, was it proving easy to mobilise Congress into sanctioning the necessary funds: the first skirmish in what would prove to be a running battle was under way as appropriations committees in both the Senate and the House sought to limit the amount of US capital that was to be apportioned to the AFP.53 *** These events, it soon became apparent, were far more than just teething problems. Larger, more systemic difficulties became evident in 1962, as long-standing discussions about how Latin American development should take place continued to circulate. In bureaucratic and organisational terms the AFP was in a mess; little advancement had been made, meanwhile, in actually setting up any of the Alliance projects. Money had been committed, but there was little to show for it. ‘On the Alliance’s first birthday’, Time reported, ‘with over $1 billion committed, it is already in deep trouble.’ Its administrative structures, the report noted, were so unwieldy that they had ‘won the name googleplex’, while safeguards to private investment had not been outlined clearly enough to reassure US businessmen and they remained ‘uncertain how fast and far the reforms are intended to go . . . There is not enough government money in the world to do the job that has to be

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done; only by activating private capital, both Latin and US, can the Alliance succeed’.54 The tangible lack of progress had not diminished the administration’s belief that advancing economic development was by far the best way toward ensuring the region’s long-term security. In a meeting to discuss the Alliance held in January 1962, the starting point was the view that success was achievable. Even here, though, doubts were apparent. ‘With Congress we must discuss candidly the underlying problems of effecting a turn-around in aid policy, which demands a turn-around in the policies of the recipient governments themselves’, the minutes of the meeting noted. ‘We [need] to attempt to persuade Congress that our aid policies in Latin America are not in as disheveled a condition as it may appear.’55 Furthermore, the future of the Alliance continued to be seen as having wider significance: if the ‘decade of development’ was to meet its objectives then the AFP had to succeed. ‘In Latin America we seek more than we seek in Asia’, it was noted at a meeting held in the State Department. ‘We hope the Alliance for Progress will increase the strength of the free world Alliance as these countries industrialize and develop over the next twenty years.’56 Kennedy made a similar point and outlined his ‘strong view that the fate of the whole aid program rests on the success of the Alliance’ and that it should, therefore, be ‘given the highest priority’.57 Such views persuaded some officials that more dramatic steps might need to be taken in order to alter prevailing views. Under the present course, one NSC staffer wrote to Kennedy in March 1962, the US faced a series of problems that it needed to address: At best, we will have a country-by-country, crisis-by-crisis standard. If this is going to be the case, we must begin to change the public impression baseline so the Alianza will not be judged by the standards now set. At first this will be attacked as a weakening or softening of our position. To avoid this we must coldly select one country (maybe a banana republic) and crack the whip, loudly and publicly. The symbolic value of this must override the political considerations.58 Within a year, therefore, the initial sheen of the Alliance had worn off as progress was too patchy to sustain momentum and chronic problems

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became apparent. Worse, the undoubted political benefit of proclaiming the AFP’s ambitious targets had soon given way to the harsh realities of inter-American economic relations. It was a point captured in a damning report by the Bureau of the Budget in the spring of 1962. ‘Even making allowances for the crisis-ridden politico-economic state of affairs in most of the countries visited’, their report explained, ‘it appears to us that US policies and programs are in a state of considerable disarray.’ Perhaps most importantly, however, the report laid bare the gap between rhetoric and reality. ‘The Alliance has the forward momentum of a great ideal and constitutes a US initiative of the type its position of hemispheric and world leadership demands’, it noted. ‘The first year of the Alliance program in the four countries we visited indicates, however, that there is a wide gap between Alliance concepts and practices.’59 As the gloomy appraisals piled up, a committee set up by the Department of Commerce to assist the AFP ‘through private enterprise participation’ – COMAP – recommended a reversion to Eisenhower’s approach. COMAP, headed by Secretary of Commerce Luther Hodges, found significant fault with the Alliance’s economic programme.60 In a speech given by one member, for instance, the speaker argued, ‘Meaningful direction for, or clarification of, the role which the private economy should play has been conspicuously absent from the discussion . . . pious declarations to the effect that there is a role for private capital to play in the AFP will not open the floodgates.’61 It was a sentiment supported by Douglas Dillon, secretary of the Treasury and one of the architects of the Alliance. ‘Private investment was more important to the program now than prior to Punta del Este’, Dillon told a meeting of COMAP, ‘particularly since the private sector seems to be able to move more rapidly than government recipients of aid.’62 To some, the greater importance being attached to private investment seemed dangerously regressive. Most outspoken on this issue, as ever, was Arthur Schlesinger (even though, by his own admission, he had not been paying the Alliance much attention recently). The Alliance, he wrote to Ralph Dungan in October, ‘is in the throes of a much-needed effort to build the contribution of private capital to Latin American development. This is plainly a necessity.’ However, he went on, ‘there is surely a danger in going overboard in this direction and reverting to the Eisenhower Latin American policy’, which was ‘as wrong today as it was in the fifties – more so, because of the churning up of political sentiment

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in the intervening years’. If fostering private investment again became a key feature of US policy, he fumed, ‘we might as well kiss the Alliance – and the hemisphere – goodbye’.63 In a follow-up note, sent just a few days later, he clarified his central point. The memo, he wrote, was not ‘a dissent from the view of the importance of stimulating the private sector in Latin America’; rather it was a call for ‘a pragmatic, not a doctrinaire, approach to the private sector’.64 Yet there was little evidence that the lending and aid mechanisms of the Alliance were likely to have any appreciable impact on interAmerican economic relations. To the contrary, it seemed increasingly clear that some Latin Americans were coming to see the Alliance negatively. Arturo Morales-Carrion, one of the Kennedy officials most wedded to the Alliance’s aims, offered a grim appraisal on this front: To many a Latin American eye, the Alliance is simply a moneylending operation in the fiscal or financial fields. The publicity which surrounds each loan or grant helps to underscore the ‘money-lender’ image. And no money-lender in history has ever evoked great enthusiasm . . . the Alliance is increasingly seen in Latin America as a US policy . . . Unless the Alliance is able to ally itself with nationalism, to influence it in a constructive direction, to translate the abstract terminology of economic development into familiar concepts related to nation-building, the Alliance will be pouring money into a psychological void.65 It was a particularly acute assessment. For all its rhetoric, and despite the antipathy of those like Schlesinger toward the model pursued in the 1950s, there was a mounting sense by mid-1962 that a heavier reliance on private capital might well be necessary. Indeed, most of the money that had been sent to the area had gone to addressing preexisting economic problems rather than galvanising new development projects; only $144 million worth of projects were under ‘active consideration’ by early 1962, of which ‘nearly $50 million was from Argentina’.66 In Chile, meanwhile, a decisive clash was believed to be looming, with the United States unwilling to provide further funds until the government agreed to implement tax, land and currency reforms. ‘If the Alliance is to continue aid to Chile’, Moscoso informed Kennedy, ‘either the Chileans must honor their reform commitments

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or the Alliance must abandon the self-help and reform criteria in Chile and ultimately throughout Latin America.’67 Nor was there any real sign of improvement in 1963. A report compiled by the United States Information Agency, which sought to gauge the economic and political climate of opinion toward the Alliance, found much that was favourable. Nevertheless, most of those asked continued to see the AFP ‘as mainly an American-sponsored and American-financed program’, and almost as many people wanted to see US influence ‘reduced or eliminated’ as wanted to see it ‘increased’. On the key metric of whether or not the AFP was seen as an interAmerican programme, meanwhile, the results were disappointing. ‘By far the majority of those aware of the Alliance’, the report explained, ‘feel the US will bear half or more of the program’s cost’.68 Arguably the most damning factor, however, was the chronic lack of progress in encouraging Latin American nations to embrace the Alliance. After all, this was believed to be the programme they had been calling for since 1945; yet, seemingly, it was causing a worsening in inter-hemispheric relations rather than an improvement. A report sent to Kennedy in 1963 noted in bleak terms that the United States had not been ‘able to begin a real development effort in Latin America . . . it can be accurately said that, as of today, not a single Latin American nation is embarked on a development program under the Alliance for Progress’.69 With the economic void in the region seeming to widen, then, calls for a reversion to private capital-led development gathered pace. ‘What is needed’, one COMAP official told Luther Hodges, ‘is a comprehensive reappraisal of our policies under the Alliance. The most important Alliance goal is rapid economic growth. And rapid economic growth cannot be achieved without greater emphasis on the private sector.’70 Though COMAP came under fire from both the New York Times and the Washington Post for its own limited amounts of success, the broader – and more important – point was that the approach set out in 1961, which was supposed to herald a new dawn in inter-American economic relations, had stalled.71 In a telling intervention, David Elliott Bell, director of AID and thus one of Washington’s foremost voices on international development, picked up on the ideas of COMAP and argued ‘that US policies be reorientated to place far greater emphasis on the encouragement of private enterprise and investment . . . the

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encouragement of private enterprise, local and foreign, must become the main thrust of the Alliance’.72 By the final months of Kennedy’s presidency, then, there were signs that the administration was preparing to start afresh when it came to the issue of economic development in Latin America. Strategic concerns in the area had reached significant new levels as a result of the inability to resolve the situation in Cuba and the impact of rapidly moving political trends. Bell, in a further contribution to the debate, argued that ‘grants should be phased out over the next three years’, that the ‘US should not contribute to the growth of the public sector in less developed countries where private enterprise should do the job’, and that care should be taken that development ‘planning does not make government dominant in the economic life of these countries’.73 The final report of the blue-ribbon Clay Committee, meanwhile, created to offer suggestions on the future of foreign aid, argued that ‘nothing will avail to promote rapid progress if Latin American leaders do not stimulate the will for development, mobilize internal savings, encourage the massive flow of private investment, and promote other economic, social, and administrative changes’.74 While discussions over whether or not economic strategy could continue in its present format were ongoing, evidence mounted that the US needed to prioritise its strategic interests rather than hold firm to the idealistic principles set out in the Alliance. A stark illustration of this came with the press’s muted discussion of the so-called Martin Doctrine (named after Assistant Secretary of State for inter-American Affairs, Ed Martin). On 6 October 1963, Martin published an article in the New York Herald Tribune, which seemed to mark a change in policy. Worsening political conditions in nations as prominent as Argentina, Brazil and the Dominican Republic had heightened the sense that stability had to come before social transformation. The military, Martin stated, had a key role to play in supporting constitutional governments in the region and could, under the right circumstances, be a force for progressive change. Moreover, he went on, it ‘was the responsibility of the Latin Americans to create conditions in which such [military] regimes could not survive and in which democracy could prosper’.75 Martin’s views were consistent with a growing acceptance among Kennedy’s advisers of the need to support authoritarian regimes throughout the Cold War in the face of what appeared to be a steady decline in Washington’s position.76

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Some advisers criticised Martin’s comments. Schlesinger, for one, was forthright in his view that it was damaging for the Kennedy administration to be associated with such a programme. ‘The Martin statement has alarmed some’, he wrote to Kennedy, ‘by appearing to transform a pragmatic necessity into a new policy departure – or rather into a reversion to old and familiar US policies which for a moment Washington seemed to have abandoned.’77 In the context of the principles set forth when announcing the Alliance Schlesinger’s concerns were apt, but in the climate of interAmerican and Cold War relations in 1963 such views no longer had the force of previous years. Stemming the tide in the region was now even more important to US officials than it had been when Kennedy took office, and the inherent problems with the Alliance had demonstrated quite clearly that its vision of inter-American economic relations would not prove to be the mechanism by which this goal could be achieved. In a speech delivered in Miami just days before his death, Kennedy gave a strong statement of support for the Alliance and called on the United States and the Latin Americans to do much more to ensure it was a success. But, in a passage highly reminiscent of his predecessor, he also highlighted the vital role that would need to be played by private capital. ‘If encouraged, private investment, responsive to the needs, the laws, and the interests of the Nation, can cooperate with public activity to provide the vital margin of success as it did in the development of all the nations of the West, and most especially in the development of the United States of America’, Kennedy proclaimed. ‘If we are to have the growth essential to the requirements of our people in this hemisphere, then an atmosphere must be developed and maintained that will encourage the flow of capital in response to opportunity.’78 *** How had the policy that was supposed to rejuvenate inter-American economic relations led to this reversion to Eisenhower-era models? The general failings of the Alliance had been compounded by two other factors. First, the faith that US officials had in the capacity of the American economy at this time had been eroded by a series of problems, not least a worsening balance of payments situation that raised serious questions about the nation’s economic prospects in the near future.79 As the administration’s efforts to resolve this failed to have any real impact,

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Congressional opposition to Kennedy’s international aid programme became more entrenched as any lingering faith in the New Deal models of progress was finally eradicated on Capitol Hill. A report produced in the Department of Commerce just a month before Kennedy’s death noted this point quite clearly. ‘Foreign aid is in deep trouble’, the report explained; ‘it will be cut to the bone in Congress this year’. Any attempts to correct this, the report continued, were likely to ‘fare even worse – because of continuing US budget and balance-of-payments problems; because of progressive deterioration in the always tenuous public support of the program; and because it is an obvious football to be kicked around in an election year’.80 The second element affecting this process was the fallout from the Cuban missile crisis. In terms of the relationship between the White House and the Kremlin, the episode established Kennedy as a credible world leader and stemmed Khrushchev’s attempts to browbeat the American president and take advantage of what he saw as his callow youth and inexperience.81 But, in Latin America, it raised concerns about the administration’s ability to exert its influence over other nations. To be sure, such concerns had always been evident and US officials recognised the limitations of their capacity to effect change in Latin America. Nevertheless, the missile crisis sharpened this.82 Such fears had been outlined during the crisis itself. If the US was unable to bring about the missiles’ removal, Douglas Dillon argued in one EXCOMM meeting, the ‘United States will lose all of its friends in Latin America, who will become convinced that our fear is such that we cannot act’.83 Still, the most important factor was that, rather than solving the problems evident in Eisenhower’s approach, the Alliance had exacerbated them. Despite its lack of tangible achievements, Eisenhower’s approach had maintained channels of communication and negotiation. The Latin Americans were deeply unhappy with the economic policies pursued between 1953 and 1961, without question, but not to the extent whereby they were eager to renounce interAmerican cooperation. More importantly, the majority of US policy makers remained convinced that it was an approach that would ultimately prove successful. Kennedy’s model, by contrast, brought the tensions that had always been simmering within US policy rushing to the boil as the success of its rhetorical pledges failed to translate into an effective policy. As the Alliance was quickly undermined by bureaucratic

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and political problems, not least the profound difficulties in creating a new administrative structure to manage it, the enthusiasm with which it had initially been greeted started to atrophy. Moreover, Latin American leaders lost faith in the idea that their developmental objectives could be achieved in concert with Washington. By seeking to accelerate the region’s development the Kennedy administration had initiated a more rapid decline in inter-American economic relations. They still undoubtedly wanted Latin American nations to embrace US developmental principles in 1963; however, this would now be married to a more open return to supporting authoritarian leaders and intervening against leaders opposed to US policies while, on the economic front, emphasising the importance of the role to be played by private capital.84 Economic policy, it seemed, had come full circle.

CONCLUSION

As President Kennedy began to start mobilising his bases of support for his run for re-election, he journeyed to Texas in November 1963 – a state that, if his strategists’ predictions were right, was likely to be a key battleground in his attempt to hold on to the White House. Central to Kennedy’s hopes of re-election was his improving reputation in foreign policy. Though international dealings had been the cause of much concern in Kennedy’s first 18 months in office, the successful resolution of the Cuban missile crisis in late 1962 and the signing of the Test Ban Treaty with the Soviets in August of the following year had brought about a renaissance in perceptions of his reputation as an effective Cold War leader. Heralding an effective foreign policy in Texas, given its demographics, meant highlighting the efforts undertaken in Latin America. And so it was that in Houston, on 21 November, Kennedy spoke to the League of United Latin American Citizens of the Alliance for Progress and highlighted the fact that it demonstrated his abiding desire to improve the lives of the Latin American people. A vote for Kennedy in 1964, he pledged, would be a vote for increased hemispheric cooperation. Like Franklin Roosevelt’s efforts to demonstrate the importance of being good neighbours in the 1930s, Kennedy told his audience, his administration had embraced the idea that the United States and the Latin American nations were friends and associates in a great effort to build in this hemisphere an Alliance for Progress, an effort to prove that in this hemisphere, from top to bottom, in all of the countries whether they be Latin or

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North American, that there is a common commitment to freedom, to equality of opportunity, to a chance for all to prove that prosperity can be the handmaiden of freedom, and to show to the world a very bright star here in this country and, indeed, in the entire hemisphere.1 The following day, as his tour moved to Dallas, he was due to give a further speech that would again emphasise his commitment to fostering inter-American harmony. ‘An area long neglected has not solved all its problems’, Kennedy’s prepared notes explained. I can testify from my trips to Mexico, Colombia, Venezuela, and Costa Rica that American officials are no longer booed and spat upon south of the border. Historic fences and friendships are being maintained. Latin America, once the forgotten stepchild of our aid programs, now receives more economic assistance per capita than any other area of the world. In short, the United States is once more identified with the needs and aspirations of the people to the south, and we intend to meet those needs and aspirations.2 This second speech, of course, was never delivered, as Kennedy’s motorcade came under fire in Dealey Plaza and the president was fatally wounded. News of his death prompted outpourings of grief in Latin America where, for all the problems with the alliance, many Latin Americans saw him as someone who had at least attempted to improve their situation. In Guatemala, one US diplomat recalled, she lost count of ‘how many ceremonies and inaugurations I attended of schools, libraries, clubs, etc., all named in honor of John F. Kennedy’. Similarly, in Colombia, a US official recollected that every community I knew of or later heard about in rural Colombia seemed to be as affected by that event as America was, and I still remember the endless lines of mules and horses and people that walked out of the countryside to come in and tell us, who were the only Americans they knew, how sorry they were and that in this Catholic country they all burned candles on the night after, when people knew that he had died. The whole countryside, as far as an eye could see, was full of candles.3

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It mattered not, for the time being, that the alliance had failed to live up to its lofty rhetoric or that Kennedy’s time in office had coincided with a steady escalation in repressive methods to see off strategic threats. Following his accession to the presidency, Lyndon Baines Johnson sought to reaffirm Washington’s commitment to the AFP. Theoretically, the alliance ought to have been a programme that appealed greatly to Kennedy’s vice president. Born and raised in rural Texas, with a long track record of seeking to improve the lives of the poor and disenfranchised, and a figure who had gained a huge reputation in the 1950s as the most effective political operator in Congress, Johnson could see much in the AFP’s stated principles that he strongly agreed with. His background and personal stance on issues of this sort, furthermore, provided him with a clear capacity to engage and sympathise with the plight of those in developing nations that other advisers in the Kennedy administration perhaps lacked.4 And, indeed, in his first months in the White House, he did seek to restate his administration’s determination to honour the slain president’s commitment to the region.5 Just four days after Kennedy’s death, in a White House meeting with Latin American diplomatic representatives, Johnson pledged ‘all the energies of my government to our common goals’. Self-determination, human freedom, social justice, economic progress – all of these, Johnson averred, would be at the heart of his approach as they had been of Kennedy’s. ‘We all know that there have been problems within the Alliance for Progress’, Johnson told them, ‘but the accomplishments of the past three years have proven the soundness of our principles. The accomplishments of the years to come will vindicate our faith in the capacity of free men to meet the new challenges of a new day.’ Inspired by the memory of President Kennedy, he promised, ‘we will carry on the job’.6 He also waded into the now annual debate with Congress over the requested aid budget. Cutting levels of economic and technical assistance, Johnson charged, would leave the US unable to carry out the undertakings of President Eisenhower in the Act of Bogota´ and of President Kennedy in the Charter of Punta del Este. It would mean that the United States would be providing for all of Latin America less than the Soviet Union is putting into Cuba alone. This is no way to combat communism in Latin America.7

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Behind the scenes, however, significant change was afoot as Johnson and his advisers sought to further develop the shifts that had been apparent in Kennedy’s last months in office and stem what they perceived to be a worsening situation in the region. Johnson, who was eager to assert his authority, believed that Latin America could be one area where he could demonstrate his toughness by tackling what he saw as an incoherent and unwieldy policy.8 By May of 1964, in fact, his frustrations with the alliance were becoming clearly apparent as he effectively begged US officials and Latin American diplomats to adopt a more positive stance in order to prompt a more encouraging mood. The key, he told them during one White House meeting, was in positive thinking and a more energetic approach. Johnson, the minutes noted, concluded the meeting by emphasizing the need for optimism and enthusiasm in supporting the Alliance. He remarked that if you want to lose an election all you have to do is predict that you will lose it. If you want to lose a baseball game, all you have to do is announce your doubts. The President believed that we had come a long way and we should emphasize our success and do all that we can to create the appearance of success as well, since the appearance would reinforce the reality.9 Aware of the problems that had confronted Kennedy in finding someone suitable to run the alliance, meanwhile, he brought in Thomas Mann to head his administration’s attempts to stabilise the situation. Mann, a Texan like Johnson and someone who spoke fluent Spanish and had a long record of working for the State Department in the region, was seen as someone who could bring stability and order to inter-American relations. In appointing Mann, Johnson more firmly entrenched the reversion to Eisenhower’s developmental policy that had begun to gain momentum in Kennedy’s final year in office.10 Under Johnson and Mann’s stewardship, then, order and stability, as they had been under Eisenhower, would once again become the watchwords of US policy in Latin America. Economic progress was still to be welcomed and pursued, but this should not be done at the expense of political security or in a way that was unsustainable. Some years later, in an oral-history interview with the Johnson Library, Mann outlined what changes he felt the administration had made to its Latin American

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policies. There was, Mann noted, still a belief in promoting democracy and encouraging economic and social progress. But, he continued, there were differences when it came to the question ‘whether we should, in effect, espouse revolution without defining what kind of revolution we’re talking about’. In some ways, Mann suggested, the Kennedy administration had conveyed an incorrect impression by stating the US desire to oversee the region’s revolution into a modern society. ‘I think in the Latin American mind’, he explained, one who talks about revolution is understood to be saying that he favors violence in the streets and disorders. I thought we should favor orderly evolution and be careful of what we said and orient our program so that that would be made clear. If there was a difference, perhaps that was it.11 An illustration of what this approach could look like in extremis came in April 1965, when Johnson sent 22,000 US troops to the Dominican Republic to restore political order and ensure that a pro-US government took power. While this was not a profound shift in approach – more covert interventions for similar reasons had been occurring since 1945 – it did nevertheless demonstrate US policy makers’ willingness to sanction overt forms of intervention in order to meet broader Cold War objectives. ‘What can we do in Vietnam if we can’t clean up the Dominican Republic’, Johnson asked his advisers.12 For Kennedy insiders, particularly Schlesinger, such events were a stark betrayal of JFK’s legacy. As we have already seen, however, this was the consequence of a gradual hardening in US policy as the alliance’s initial momentum began to fade. The Johnson years, in fact, marked a point of transition – from attempts to use economic development as a tool for engineering interAmerican harmony and securing the area’s position in the US world system to more substantial fears about the region’s future and a willingness to demonstrate US credibility through demonstrations of force.13 As war in Vietnam increasingly undermined the nature of US hegemony, and as Latin American leaders, espying an opportunity to use shifting international patterns as a way of effectively pursuing their own objectives, started to pursue different paths, the United States was forced into a position of trying to ensure, above all else, that the region

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remained stable. By the Nixon era, indeed, the role of developmental thinking was being phased out of US policy as policy makers in Washington considered it too problematic.14 How had it come to this? As this book has argued, the collapse of developmental thinking in US policy after World War II can be traced back to the Eisenhower years when efforts to forge a successful economic policy failed to gather any real momentum. Consequently, significant tensions emerged in US policy between, on the one hand, the desire to contain radical political movements in the area and to ensure stability, and, on the other, the drive to shape the region’s development in accordance with the principles set out in Washington.15 Increasingly, these tensions were perceived by US officials who understood that, despite general agreement on the desirability of helping the countries in the area to become more economically advanced, it had proven extremely difficult to shape this into a policy that was both popular and effective. Furthermore, it was a position amply recognised by the advisers surrounding John F. Kennedy. Yet in their desire to solve this problem by embracing the principles of modernisation theory and committing the US to fostering modern economic structures in the area within a decade, the Kennedy administration actually exacerbated existing tensions and, ultimately, brought forward a major shift in US policy that led to a more fulsome acceptance of the need to utilise repression and violence in order to ensure the region’s security. Looming large over the efforts undertaken between 1953 and 1963, therefore, was a broader truth about the capacity of the United States to achieve its economic goals in Latin America. Consider again the questions set out at the start of this study – why did the Eisenhower administration remain so wedded to its basic developmental vision? What was the relationship between economic perceptions of Latin America and the wider Cold War? And why did Kennedy’s attempts to set US policy on a different economic course ultimately lead to a reversion to the Eisenhower model? Individually, the answers to these queries add significant detail and nuance to our capacity to understand the course of US policy in an area that had long been of significance to American strategists. Collectively, however, they yield a larger insight: that it was ultimately not possible for the United States to positively associate their position with Latin American development, but that the

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context of the Cold War world and the long history of inter-American relations nevertheless compelled them to try. Eisenhower’s view of inter-American relations started from a fairly straightforward premise. If trade and investment by private companies could be expanded in the area, and if Latin American nations could be encouraged to adopt the sort of measures that were in keeping with prevailing US economic views, the area would become more secure and US power would be increased.16 This had long been an aim in the region, of course, but it was given an extra salience by the context of the Cold War. From the outset, therefore, Eisenhower and his advisers were aware that it would not be easy to shape Latin American development. Moreover, they recognised in the years ahead that the problems they were confronting were only getting worse as Latin American opposition to US economic policy grew more intense. Yet, at the same time, US officials believed that the only sustainable way to ensure that the area remained in Washington’s sphere of influence and secure in global strategic terms was to help to foster efficient and maintainable economic models. The inevitable outcome was a period of sustained animosity as Latin Americans pushed back against attempts to manage their economic advancement. What held this policy together, however, and enabled the Eisenhower administration to maintain a steadfast stance despite recognising the abundant difficulties, was the long-standing belief that the area was one of US predominance and the corresponding faith that, once the US model was seen to work, its benefits would become apparent to the Latin Americans. Racial views were evident here, undoubtedly, but so, too, were the continuing ideologies associated with the Monroe Doctrine.17 Broader affirmation, though, came from the enduring conviction of US policy makers that the American economic model had the capacity to foster progress elsewhere. Proving the transformative capacity of the US system in Latin America, US officials argued, would serve as a powerful rebuttal to the attraction that the Soviet system had for newly emerging nations throughout the Third World. The upshot of this was a hemispheric policy that, in economic terms, focused primarily on encouraging the role that private capital would play in galvanising economic advancement. Only in this way, Eisenhower and his advisers believed, would the necessary levels of capital flow into the area’s coffers and provide the impetus for a

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sustainable move toward modern capitalist structures. Changes to the initial model set out in NSC 144/1 would be necessary, as we have seen, but the underlying focus would remain unaltered. This remained the case, moreover, even as inter-American tensions seemed to worsen – and even when, in 1959, Fidel Castro’s revolution in Cuba gave a powerful new voice to Latin American dissent. In the second volume of his memoirs, Eisenhower set out both his continued belief that the United States needed to help shape the region’s development and what he saw as his administration’s extensive efforts toward achieving this in the face of substantial problems. ‘Any American should understand that as we are bound to our neighbors to the south geographically’, Eisenhower wrote, ‘it behoves us to join with them in developing a stronger Western Hemisphere economy, higher standards of living, and faith in freedom’s future’. Blocking any such progress, he continued, ‘are a host of acute problems, including a lack of development capital, ruinous up-and-down swings in the prices of their exports, a need for common markets, lack of housing, education, transportation, and health facilities, and an archaic social system’, all of which were being compounded by an ‘incredible population explosion’.18 It was these twin beliefs – that development had to be shaped by the US, and that achieving this would be difficult and problematic – that prompted the Kennedy administration’s desire to dramatically accelerate the economic process. Kennedy, like Eisenhower, believed that economic relations provided the clearest route to enduring comity in interAmerican relations. Unlike his predecessor, though, Kennedy bought into the idea that development in the area needed to take place more quickly and that, as per the models being put forward by Walt Rostow and others, this could be achieved through judicious use of aid, diplomacy and effective organisation. To be sure, Eisenhower’s advisers had raised similar concerns with him, and the president had never entirely dismissed the idea that more rapid progress would be desirable. But at no point did the administration consider adopting any policies that would undermine their basic economic principles. For an aspiring presidential candidate, though, it was quite clear in 1960 that the problems in inter-American relations offered a clear political opportunity – not only to point to a clear example of how the Republicans’ approach had failed, but also in terms of courting Latino voters whose backing might be important in a close election. A great

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deal of effort was thus expended on highlighting Eisenhower’s failings in the area and pledging that, under Kennedy, there would be a dramatic shift in inter-American relations. ‘In Latin America’, the Democrats’ party platform stated, ‘we shall restore the Good Neighbor Policy based on far closer economic cooperation and increased respect and understanding.’19 Once elected, Kennedy pledged that a new era in interAmerican economic relations would begin – one that would usher in an age of development within ten years. If one of the main thrusts behind Kennedy’s statements was the sense that the area was ripe for political point-scoring, another was the belief that Latin America offered a genuine opportunity to reaffirm the credibility of US economic power. Though war and conflict had been avoided in the 1950s, a sense was emerging by the end of the decade that US power was in decline and that the masculine virtues that ought to typify the US stance toward the Soviets had started to erode in the face of the increasing ‘feminisation’ of American life. Kennedy had run for office, Robert Dean has argued, ‘promising to halt America’s decline into flabbiness and impotence against the threat of a “ruthless” and expanding Soviet empire.’20 One outcome of this was that the sweeping theories being put forward by modernisation theorists held great appeal for the new president and his advisers as they seemed to offer an opportunity to encourage greater impetus in US policy and to seize the moral high ground in a way similar to the emergence of human rights in the 1970s.21 But if the vision set out by Rostow could provide a theoretical blueprint of how Third World development could be achieved, it could not aid Kennedy and his advisers in their efforts to put said ideas into practice and to construct the bureaucratic mechanisms necessary in order to pursue them. Almost from the moment the alliance was announced, problems started to arise with respect to finding a place for it within existing bureaucratic structures, finding someone to successfully run it, ensuring wholehearted Latin American support, and obtaining the required funding from Congress. Simply channelling more aid to the region would not be sufficient to ensure a successful policy. As Rob Rakove has argued in his assessment of Kennedy, US policy makers needed to ‘attach humble political expectations to foreign aid’, as although it ‘can win friendship’ it would not secure ‘unflinching loyalty’.22 Within a year these problems had only worsened and the initial momentum of the alliance had started to disappear. Once this

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began to happen, and as the media and Congress started to assail the alliance, the Kennedy administration came under severe pressure to redress the balance. Their response, much to the chagrin of advisers like Schlesinger and Richard Goodwin, was to start reverting to the economic policies that Eisenhower had pursued in an effort to find a way of moving the region’s development forward. As the alliance’s initial momentum began to falter, the reversion to the Eisenhower model is, arguably, the most important point of this story. For it brings us back to the argument made above that it never was within the power of US officials to shape the region’s development. The Alliance for Progress was the most obvious example of that; Kennedy’s bold proclamation about galvanising the region’s progress was always much too ambitious. When considered alongside the difficulties encountered by the Eisenhower administration, however, it is clear that this was part of a longer trend. Kennedy, without question, exacerbated the inherent tensions within US policy with his pledge to bring the area’s economies into the modern era. Yet JFK did not cause these tensions: they were already firmly established when he delivered his inaugural speech on that cold winter’s day in January of 1961. Understanding this point is important. Often, scholars criticise policy makers’ decisions as being wrong-headed and hubristic, or chide them for missing the blindingly obvious, and instead suggest some alternative that, if adopted, could have worked out far more successfully. One of the most famous iterations of this was Melvyn Leffler’s description of ‘wise men’, ‘foolish men’ and ‘prudent men’ in his account of the start of the Cold War.23 But, as this book has demonstrated, Cold War policy makers often adopted policies for a conflicting range of reasons. In Latin America, as we have seen, the Eisenhower administration believed that their policies would work while recognising the inherent difficulty of achieving their objectives. Kennedy and his advisers, meanwhile, placed too much faith in models of modernisation theory that had little grounding in the area in an effort to usher in a bold new era in US policy toward the developing world. Each administration felt compelled to act by the exigencies of the Cold War and believed that they had the answers to the region’s problems; yet each, also, recognised quite quickly that this would not be straightforward. Wrong decisions were undoubtedly taken – most obviously with respect to ill-conceived and destructive interventions

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that cast a huge pall over inter-American relations for decades to come – but there was not an easy economic alternative that US officials were refusing to countenance. Calls for greater levels of aid in the 1950s were generally rejected and brought forth substantial criticism; a move to more extensive appropriations of aid in the Kennedy era did little to arrest the situation. Ultimately, then, we are confronted with the fact that it was beyond the capacity of the United States to forge a successful developmental strategy in Latin America in the first 20 years of the post-war era. Absent the constrictive context of the Cold War this would have been a tall order. With fears of Soviet gains constantly in the minds of US officials, though, it was simply not feasible for Washington to step back and play a less active role. The Latin American desire for progress, the long history of US hegemony in the area, US officials’ enduring faith in their economic system, and the impact of the Cold War on political and strategic thinking – all exerted a significant pull on US policy and drove successive US administrations to try and manage the region’s development. Translating all of that into a successful policy, however, was exceedingly difficult and became virtually impossible as a result of the rigid economic views of US officials. It was a point made in a candid conclusion to an OCB report written in November 1958. As the annex to the report explained, ‘we have not found – and it may not be possible to find – an approach which will entirely meet the problem of identifying the United States satisfactorily as a wholly constructive force in the area’.24 For the Eisenhower administration the truth of this did not undermine their belief that ultimately the region’s future would be secured via sustainable economic growth. The Kennedy administration, by contrast, believed that the theories associated with modernisation provided the solution to this conundrum. When this proved to be misguided, a return to earlier models was more or less inevitable. Moreover, it would have a longer impact on the course of inter-American relations. Eleven years after the OCB’s conclusion, in a discussion over the future of US regional policy, Henry Kissinger challenged the centrality of development in Washington’s approach. It was vitally important, Kissinger informed his advisers, to define the nature of inter-American relations and to consider, candidly, what US interests in the area were.

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It would be useful, he told them, to ‘know what we are aiming for’. More specifically, he raised the questions whether or not the United States had a ‘stake in the domestic evolution of Latin American countries’ and why it was that Washington ‘cared about economic development in Latin America’. Somewhat taken aback, the NSC staffers at the meeting argued that development was vital and that it would help to broker long-term harmony. Still not convinced, Kissinger again asked if anyone ‘knew why development was our primary objective in Latin America’. Again, his advisers responded by noting that to abandon the centrality of development in inter-American affairs would ‘jeopardize our political relations’. That might well be true, Kissinger retorted, but pursuing development was evidently a Latin American objective and, as such, he could not help but ask ‘whether we should help’. Much of this was Kissinger playing devil’s advocate, but it also had a practical element to it as well. Securing foreign aid was getting increasingly difficult, he explained, and a ‘new rationale’ was needed to ‘save it’: ‘just because the Latin Americans want development won’t help our political problems with the Congress’.25 In effect, Kissinger was asking whether or not pursuing development in Latin America was a worthwhile exercise for the Nixon administration – sentiments that would have been unimaginable in the years between 1953 and 1965. For the time being, a subsequent report duly noted, it remained in the US interest to try and maintain a close relationship with Latin America. Failing to ensure this by effectively ‘withdrawing’, the report explained, would run the risk of inflicting ‘heavy politico-psychological costs’ and prompt a sense ‘that our power had been greatly diminished in the world were Latin America to slip out of our orbit’. At the same time, the report continued, any decision not ‘to assist Latin America in its struggle toward full-fledged modernity would tax our consciences’: We are too rich and powerful to leave the nations of our hemisphere to drift alone into economic stagnation and social upheaval. That such a drift could open the hemisphere to hostile foreign powers is true; but more fundamentally, it would be incompatible with our own history and principles.26 Despite this reaffirmation of the central principle that had shaped economic thinking since the early 1950s, a change was clearly in the

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offing as US officials sought to stabilise Washington’s position in an international system that was proving to be increasingly fluid. It is worth recalling at this point that Nixon had been witness to numerous policy meetings in the 1950s over foreign economic and hemispheric policy and, in Caracas in 1958, had been subjected to an alarming demonstration of how anti-American sentiments might lead to virulent protest. His response upon returning from this trip, it will be remembered, was to highlight the importance of development in seeking to improve inter-American relations. When he himself became president his initial stance, despite Kissinger’s provocative questions, was to again cite economic relations as the key to achieving US goals. Within a few years, however, this began to shift and Kissinger’s position at the NSC discussion began to seem more prescient. Eventually, with the reordering of the Cold War world and the onset of globalisation starting to tell, the Nixon administration would follow through on Kissinger’s line of thinking and scale down its commitment to supporting Latin American development as the costs of pursuing it continued to clash with wider US interests. Its chief goal, Mark Lawrence has argued, was to keep the ‘region quiet so they could focus on their highest priorities’.27 But the fact that this previously sacrosanct issue was deemed to be up for discussion as early as 1969 was a direct consequence of the trajectory of US economic policy in the Eisenhower and Kennedy years. Nixon had observed at first hand the inability of the Eisenhower administration to implement its policy in a way that the Latin Americans were supportive of. Moreover, he had come to recognise the difficulty of forging a developmental strategy that was entirely consistent with broader strategic objectives and, following his defeat to Kennedy in 1960, he had also observed the failure of the Alliance for Progress to address these problems. By the time that he took office, then, there was already a sense, as Kissinger’s comments suggested, that the idea of development providing the best route to achieve US objectives was starting to wane. There had been too much failure for things to continue unaltered; the changing nature of US power and inter-American relations, meanwhile, only made a shift more likely. Nevertheless, it is difficult to avoid the conclusion that this moment had come sooner than it needed to. Eisenhower had, in a number of ways, been right about the region’s likely developmental path. It would prove

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to be uneven, it would take an inordinately long time and be extremely difficult, and he was correct that a patient and sustainable model was ultimately better in the long run than a model that was too hasty and impracticable. His approach was a long way from being perfect – interventions in Guatemala, Bolivia and Cuba, not to mention the flagrant support of non-democratic and repressive regimes, attest to that – but it did have some strengths in the economic sphere. The problem that Eisenhower never managed to solve, and which was outlined in the OCB report from 1958 cited above, was how to address the incompatibility between developmental ideals and strategic objectives in US policy and, moreover, to positively associate the United States with the Latin Americans’ desire to become modern capitalist societies. Kennedy’s belief that he and his advisers had found the answer, however, in fact proved to be beginning of the end as it exacerbated preexisting tensions and prompted a worsening in hemispheric affairs. By committing the United States to a ten-year programme to bring the region into the modern age, Kennedy removed perhaps the greatest lever that Washington had to use in economic negotiations with the Latin Americans. This, in itself, would not have been a problem if the alliance had been a roaring success; but as the AFP quickly began to run into difficulties, and as its initial momentum was lost, there was little option for US officials but to revert to principles of the sort that had guided policy under Eisenhower. Both the Eisenhower and the Kennedy administrations failed to piece together effective economic strategies in Latin America, and, as the events of the years after 1968 would demonstrate, this would have profound and tragic consequences for the people of the region.28 An inability to forge a successful economic strategy in the Americas between 1953 and 1963 did not cause the era of violence and intervention that followed, of course, but it did make it more likely as Washington’s faith in its ability to shape the area’s development started to atrophy. A continuance of Eisenhower’s approach in 1961 would not, in all likelihood, have avoided this outcome; but it might have helped to delay it and, in the face of the tragedies that subsequently unfolded, this might not have been such a bad outcome.

NOTES

Introduction 1. Inaugural address by President Kennedy, 20 January 1961, online by Gerhard Peters and John T. Woolley, the American Presidency Project, at www.presidency. ucsb.edu/ws/?pid¼8032, accessed 6 January 2014. Hereafter all quotations drawn from this source will be referenced as PPPUS, the initials of the relevant president and the year, and the date that the site was last accessed. 2. Tampa speech (which ultimately was never delivered) quoted in Stephen Rabe, The Most Dangerous Area in the World: John F. Kennedy Confronts Communism in Latin America (Chapel Hill: University of North Carolina Press, 1999), 14 – 15. 3. Tad Szulc, ‘Kennedy Raises Latin Aid Hopes’, New York Times, 14 November 1960; ‘Balance Sheet’, Time, 5 December 1960. 4. Presidential debate in New York between Senator John Kennedy and Vice President Richard Nixon, 21 October 1960, online by Gerhard Peters and John T. Woolley, the American Presidency Project, at www.presidency.ucsb.edu/ws/? pid¼29403, 17 February 2014. 5. Jeffrey Taffet, Foreign Aid as Foreign Policy: The Alliance for Progress in Latin America (New York: Routledge, 2007); Michael Latham, Modernization as Ideology: American Social Science and Nation Building in the Kennedy Era (Chapel Hill: University of North Carolina Press, 2000), ch. 3. 6. On the long-standing impact of the intervention in Guatemala, Mark T. Hove, ‘The Arbenz Factor: Salvador Allende, US– Chilean Relations, and the 1954 US Intervention in Guatemala’, Diplomatic History, Vol. 31, No. 4 (September 2007), 623– 63; Max Paul Friedman, Rethinking Anti-Americanism: The History of an Exceptional Concept in American Foreign Relations (New York: Cambridge University Press, 2012), ch. 4. 7. Burton Kaufman, Trade and Aid: Eisenhower’s Foreign Economic Policy, 1953– 1961 (Baltimore: Johns Hopkins University Press, 1982); see also William McClenahan Jr and William Becker, Eisenhower and the Cold War Economy

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9.

10.

11.

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(Baltimore: Johns Hopkins University Press, 2011); for a more nuanced view, Michael Adamson, ‘“The Most Important Single Aspect of Our Foreign Policy?” The Eisenhower Administration, Foreign Aid and the Third World’, in Kathryn Statler and Andrew Johns (eds), The Eisenhower Administration, the Third World, and the Globalization of the Cold War (Lanham, MD: Rowman & Littlefield, 2006), 47 – 72. See Stephen Rabe, Eisenhower: The Foreign Policy of Anti-Communism and Latin America (Chapel Hill: University of North Carolina Press, 1988); Mark Gilderhus, The Second Century: US – Latin American Relations since 1889 (Wilmington, DE: Scholarly Resources Inc., 2000); Thomas Zoumaras, ‘Eisenhower’s Foreign Economic Policy: The Case of Latin America’, in Richard Melanson and David Mayers (eds), Re-evaluating Eisenhower (Urbana: University of Illinois Press, 1987), 155– 91; Gaddis Smith, The Last Years of the Monroe Doctrine, 1945 –1993 (New York: Hill and Wang, 1994). On changes in the Eisenhower era foreshadowing Kennedy see Stephen Rabe, ‘Controlling Revolutions: Latin America, the Alliance for Progress and the Cold War’, in Thomas Paterson (ed.), Kennedy’s Quest for Victory: American Foreign Policy, 1961– 1963 (New York: Oxford University Press, 1989), 107– 10; in a similar vein, but perhaps a little less forthright in identifying these links, Taffet, Foreign Aid as Foreign Policy, 13 – 27. James Siekmeier, Aid, Nationalism, and Inter-American Relations: Guatemala, Bolivia, and the United States, 1945– 1961 (New York: Edwin Mellen Press, 1999); Matthew Loayza, ‘An Aladdin’s Lamp for Free Enterprise: Eisenhower, Fiscal Conservatism, and Latin American Nationalism, 1953– 1961’, Diplomacy and Statecraft, Vol. 14, No. 3 (September 2003), 83– 105; Walter LaFeber, Inevitable Revolutions: The United States and Central America, revised edn (New York: W.W. Norton, 1993). On this, and the argument that, while inter-American, the alliance had to be controlled by Washington, Taffet, Foreign Aid as Foreign Policy; for an argument that, to the contrary, much of the impetus came from Latin America, Christopher Darnton, ‘Asymmetry and Agenda-Setting in US– Latin American Relations’, Journal of Cold War Studies, Vol. 14, No. 4 (Fall 2012), 55 – 92. Part of the legacy of this, as Michel Gobat’s innovative essay shows, stemmed from Latin American elites’ efforts to shape a coherent ‘Latin American’ identity, partly based on race and partly based on anti-imperialism, in the midnineteenth century. Michel Gobat, ‘The Invention of Latin America: A Transnational History of Anti-imperialism, Democracy, and Race’, American Historical Review, Vol. 118, No. 5 (December 2013), 1345– 75; for wider assessments of race and inter-American relations, Lars Schoultz, Beneath the United States: A History of US Policy toward Latin America (Cambridge, MA: Harvard University Press, 1998); Michael Krenn, The Color of Empire: Race and American Foreign Relations (Washington, DC: Potomac Books, 2006); Jason Colby, The Business of Empire: United Fruit, Race, and US Expansion in Central America (Ithaca, NY: Cornell University Press, 2011).

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12. On Kennan, Roger Trask, ‘George F. Kennan’s Report on Latin America (1950)’, Diplomatic History, Vol. 2 (Summer 1978), 307 – 11; Anders Stephanson, Kennan and the Art of Foreign Policy (Cambridge, MA: Harvard University Press, 1989), 162–5; Clayton R. Koppes, ‘Solving for X: Kennan, Containment, and the Color Line’, Pacific Historical Review, Vol. 82, No. 1 (February 2013), 95 – 118; for an example of Lyndon Johnson’s tendencies on this front see telephone conversation between President Johnson and Assistant Secretary of State for Inter-American Affairs Thomas Mann, 19 February 1964, Foreign Relations of the United States 1964– 1968 Vol. XXXI (hereafter FRUS, years and volume number), Doc. No. 2. 13. On the move to economic development denoting backwardness, Michael Hunt, Ideology and US Foreign Policy (New Haven, CT: Yale University Press, 1987); Richard King, Race, Culture, and the Intellectuals, 1940– 1970 (Washington, DC: Woodrow Wilson Center Press, 2004), 6; Matthew Jones, After Hiroshima: The United States, Race and Nuclear Weapons in Asia, 1945– 1965 (Cambridge: Cambridge University Press, 2010), 38 – 44; on the emergence of development and modernisation, David Ekbladh, The Great American Mission: Modernization & The Construction of an American World Order (Princeton, NJ: Princeton University Press, 2010). My differentiation between ‘positive’ and ‘negative’ constructions of race picks up from Andrew Rotter, Comrades at Odds: The United States and India, 1947– 1964 (Ithaca, NY: Cornell University Press, 2000). 14. Gilbert Joseph, ‘What We Now Know and Should Know: Bringing Latin America More Meaningfully into Cold War Studies’, in Gilbert Joseph and Daniela Spenser (eds), In from the Cold: Latin America’s New Encounter with the Cold War (Durham, NC: Duke University Press, 2008), 3 – 47; Gilbert Joseph, ‘Latin America’s Long Cold War: A Century of Revolutionary Process and US Power’, in Greg Grandin and Gilbert Joseph (eds), A Century of Revolution: Insurgent and Counterinsurgent Violence in Latin America’s Long Cold War (Durham, NC: Duke University Press, 2010), 397–414; Hal Brands, Latin America’s Cold War (Cambridge, MA: Harvard University Press, 2010); Tanya Harmer, Allende’s Chile and the Inter-American Cold War (Chapel Hill: University of North Carolina Press, 2012). 15. See Daniel Sargent, review of Hal Brands, Latin America’s Cold War, Journal of American Studies, Vol. 46, No. 1 (February 2012), E1; see also Hal Brands, ‘Third World Politics in an Age of Global Upheaval: The Latin American Challenge to US and Western Hegemony, 1965– 1975’, Diplomatic History, Vol. 32, No. 1 (January 2008), 105– 39. 16. See, in particular, Rabe, Eisenhower; Gilderhus, The Second Century; Taffet, Foreign Aid as Foreign Policy; Zoumaras, ‘Eisenhower’s Foreign Economic Policy’. 17. Siekmeier, Aid, Nationalism and Inter-American Relations; Matthew Loayza, ‘An Aladdin’s Lamp for Free Enterprise’; Bevan Sewell, ‘The Perfect and Sustainable Road to Development: The Eisenhower Administration and Latin America’, in Bevan Sewell and Scott Lucas (eds), Challenging US Foreign Policy: America and the World in the Long Twentieth Century (Basingstoke: Palgrave, 2011), 113– 36.

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18. For a good sample, Latham, Modernization as Ideology; Taffet, Foreign Aid as Foreign Policy; Michael Dunn, ‘Kennedy’s Alliance for Progress: Countering Revolution in Latin America’, International Affairs, Vol. 89, No. 6 (December 2013), 1389– 1409. 19. Stephen Rabe, in his wide-ranging study, has, however, begun to illustrate the way that Cold War concerns clashed with the idealistic principles of the alliance. Rabe, The Most Dangerous Area in the World, 199. 20. On the global Cold War in the 1950s, the developmental competition and the shifts in US policy toward the developing world that it brought about, Odd Arne Westad, The Global Cold War: Third World Interventions and the Making of Our Times (Cambridge: Cambridge University Press, 2005), chs 1 – 4; Robert McMahon, ‘Eisenhower and Third World Nationalism: A Critique of the Revisionists’, Political Science Quarterly, Vol. 101, No. 3 (1986), 453– 73; Peter Hahn and Mary Ann Heiss (eds), Empire and Revolution: The United States and the Third World since 1945 (Columbus: Ohio State University Press, 2001). 21. On the two waves of decolonisation and their impact, David Ryan and Victor Pungong (eds), The United States and Decolonization (London: Macmillan, 2000); Ryan Irwin, Gordian Knot: Apartheid and the Unmaking of the Liberal World Order (New York: Oxford University Press, 2012), 3 – 15; Jason Parker, ‘“Made-inAmerica Revolutions?” The “Black University” and the American Role in the Decolonization of the Black Atlantic’, Journal of American History, Vol. 96, No. 3 (December 2009), 727– 51. On neutralism and nonalignment, H.W. Brands, The Specter of Neutralism: The United States and the Emergence of the Third World, 1947 –1960 (New York: Columbia University Press, 1989); Robert Rakove, Kennedy, Johnson, and the Nonaligned World (New York: Cambridge University Press, 2013); Jason Parker, ‘Cold War II: The Eisenhower Administration, the Bandung Conference, and the Re-periodization of the Postwar Era’, Diplomatic History, Vol. 30, No. 5 (November 2006), 867– 92; Mark Atwood Lawrence, ‘The Rise and Fall of Nonalignment’, in Robert McMahon (ed.), The Cold War and the Third World (New York: Oxford University Press, 2013), 139– 56. 22. Thomas Borstelmann, The Cold War and the Color Line: American Race Relations in the Global Arena (Cambridge, MA: Harvard University Press, 2001), 113– 14; John Lewis Gaddis, We Now Know: Rethinking Cold War History (Oxford: Oxford University Press, 1997), 168– 76. The belief that the United States should work with nationalist and neutralist nations in order to ensure that they remained outside the Soviet sphere of influence remained strong throughout Eisenhower’s time in office. See NSC 5906/1 ‘Basic National Security Policy’, 5 August 1959, FRUS 1958– 1960 Vol. III, 302. 23. Kenneth Osgood, ‘Words and Deeds: Race, Colonialism, and Eisenhower’s Propaganda War in the Third World’, in Statler and Johns, The Eisenhower Administration, the Third World and the Globalization of the Cold War, 3 – 4. 24. National Intelligence Estimate, ‘World Situation and Trends’, 1 November 1955, FRUS 1955– 1957 Vol. XIX, 131– 45.

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25. NSC 5902/1, Statement of US Policy toward Latin America, 16 February 1959, FRUS 1958– 1960 Vol. V, 104. 26. Nick Cullather, The Hungry World: America’s Cold War Battle against Poverty in Asia (Cambridge, MA: Harvard University Press, 2010), 1– 10; Latham, Modernization as Ideology, chs 1 – 2. 27. Rakove, Kennedy, Johnson, and the Nonaligned World, 263. 28. Michael Latham, ‘Ideology, Social Science and Destiny: Modernization and the Kennedy-Era Alliance for Progress’, Diplomatic History, Vol. 22, No. 2 (Spring 1998), 228; Rabe, The Most Dangerous Area in the World..., 199. 29. Thomas Field, ‘Ideology as Strategy: Military-Led Modernization and the Origins of the Alliance for Progress in Bolivia’, Diplomatic History, Vol. 36, No. 1 (January 2012), 182; Rabe, The Most Dangerous Area; Michael Latham, The Right Kind of Revolution: Modernization, Development, and US Foreign Policy from the Cold War to the Present (Ithaca, NY: Cornell University Press, 2011), 125– 7; Brad Simpson, Economists with Guns: Authoritarian Development and US – Indonesian Relations (Stanford, CA: Stanford University Press, 2008). 30. Press conference by President Kennedy, 1 August 1963, PPPUS: JFK 1963, 19 February 2014. 31. For a blistering assault on US Cold War policies, Stephen Rabe, The Killing Zone: The United States Wages Cold War in Latin America (New York: Oxford University Press, 2011); Greg Grandin, The Last Colonial Massacre: Latin America in the Cold War (Chicago: The University of Chicago Press, 2004); Joseph, ‘Latin America’s Long Cold War’; for an approach that suggests that the havoc of the Cold War years was caused by US policy and shifting political trends in the region, Brands, Latin America’s Cold War. 32. Greg Grandin, ‘What Was Containment? Short and Long Answers from the Americas’, in Robert McMahon (ed.), The Cold War in the Third World (New York: Oxford University Press, 2013), 27 – 48. 33. Robert Packenham, Liberal America and the Third World (Princeton, NJ: Princeton University Press, 1973), 47 – 8; David Ryan, US Foreign Policy in World History (London: Routledge, 2000), 140– 3; Nils Gilman, Mandarins of the Future: Modernization Theory in Cold War America (Baltimore: Johns Hopkins University Press, 2003); Latham, Right Kind of Revolution. 34. Ekbladh, The Great American Mission, 226– 75; Cullather, The Hungry World, 263– 71; Rakove, Kennedy, Johnson, and the Nonaligned World, 263. 35. Francis Fukuyama (ed.), Falling Behind: Explaining the Development Gap between Latin America and the United States (New York: Oxford University Press, 2009); John Coatsworth and William Summerhill, ‘The New Economic History of Latin America: Evolution and Recent Contributions’, Oxford Handbook of Latin American History, online edn (Oxford: Oxford University Press, 2012). 36. David Engerman, ‘The Romance of Economic Development and New Histories of the Cold War’, Diplomatic History, Vol. 28, No. 1 (January 2004), 24; Daniel

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Sargent, ‘The Cold War and International Political Economy in the 1970s’, Cold War History, Vol. 13, No. 3 (2013), 393– 425. 37. On this see Matthew Connelly, ‘The Cold War in the Longue Dure´e: Global Migration, Public Health, and Population Control’, in Melvyn Leffler and Odd Arne Westad (eds), The Cambridge History of the Cold War: Volume III (Cambridge: Cambridge University Press, 2010), 466– 89; Anders Stephanson, ‘Cold War Degree Zero’, in Joel Isaac and Duncan Bell (eds), Uncertain Empire: American History and the Idea of the Cold War (New York: Oxford University Press, 2012), 19 – 50. 38. For good examples, Harmer, Allende’s Chile and the Inter-American Cold War; Max Paul Friedman, ‘Retiring the Puppets, Bringing Latin America Back In: Recent Scholarship on United States – Latin American Relations’, Diplomatic History, Vol. 27, No. 5 (November 2003), 621– 36; Greg Grandin, ‘Off the Beach: The United States, Latin America, and the Cold War’, in Jean-Christophe Agnew and Roy Rosenzweig (eds), A Companion to Post-1945 America (Malden, MA: Blackwell, 2002), 426– 45; Grandin and Joseph, A Century of Revolution.

Chapter 1 Forging a Grand Strategy 1. Milton Eisenhower, The Wine Is Bitter: The United States and Latin America (New York: Doubleday and Company, Inc., 1963), 187; Milton Eisenhower, oral history interview, 15 October 1971, Eisenhower Library, Abilene, Kansas (hereafter EL). 2. H.W. Brands, Cold Warriors: Eisenhower’s Generation and American Foreign Policy (New York: Columbia University Press, 1988), 31 – 2. 3. Anders Stephanson, Manifest Destiny: American Expansion and the Empire of Right (New York: Hill and Wang, 1995); Frank Ninkovich, Global Dawn: The Cultural Foundations of American Internationalism, 1855– 1890 (Cambridge, MA: Harvard University Press, 2009); Christopher McKnight Nichols, Promise & Peril: America at the Dawn of a Global Age (Cambridge, MA: Harvard University Press, 2011). 4. Jean Edward Smith, Eisenhower in War and Peace (New York: Random House, 2012), 393. 5. On Ike’s life, Smith, Eisenhower in War and Peace; Peter Lyon, Eisenhower: Portrait of a Hero (Boston, MA: Little, Brown, 1974). 6. Ronald Pruessen, John Foster Dulles: The Road to Power (New York: The Free Press, 1982); Richard Immerman, Piety, Pragmatism and Power in US Foreign Policy (Wilmington, DE: Scholarly Resources, Inc., 1998); Richard Immerman (ed.), John Foster Dulles and the Diplomacy of the Cold War (Princeton, NJ: Princeton University Press, 1990); Townsend Hoopes, The Devil and John Foster Dulles (New York: Deutsch, 1974). 7. For a summary of the historiographical trends regarding Eisenhower, Dulles and their stewardship of US policy in the 1950s, Stephen Rabe, ‘Eisenhower Revisionism: The Scholarly Debate’, in Michael Hogan (ed.), America in the

NOTES

8.

9.

10. 11.

12. 13. 14. 15. 16.

17. 18.

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World: The Historiography of American Foreign Relations since 1941 (Cambridge: Cambridge University Press, 1995), 300– 26; Richard Immerman, ‘Confessions of an Eisenhower Revisionist: An Agonizing Reappraisal’, Diplomatic History, Vol. 14, No. 3 (Summer 1990), 319– 42. Republican Party Platform, 7 July 1952, taken from www.presidency.ucsb.edu/ platforms.php, accessed 21 April 2011; Robert Bowie and Richard Immerman, Waging Peace: How Eisenhower Shaped an Enduring Cold War Strategy (New York: Oxford University Press, 1998), 11 – 40; Kenneth Osgood, Total Cold War: Eisenhower’s Secret Propaganda Battle at Home and Abroad (Lawrence: University Press of Kansas, 2006), 46 –55. George Herring, From Colony to Superpower: US Foreign Relations since 1776 (New York: Oxford University Press, 2008), 659– 60; John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of American National Security Policy during the Cold War, revised edn (Oxford: Oxford University Press, 2005), 125– 62; Robert McMahon, ‘US National Security Policy from Eisenhower to Kennedy’, in Melvyn Leffler and Odd Arne Westad (eds), The Cambridge History of the Cold War: Volume I (Cambridge: Cambridge University Press, 2010), 288– 93. Gaddis, Strategies, 125– 97; Westad, Global Cold War, 110– 58. Klaus Larres and Kenneth Osgood (eds), The Cold War after Stalin’s Death: A Missed Opportunity for Peace? (Lanham, MD: Rowman & Littlefield, 2006); Melvyn Leffler, For the Soul of Mankind: The United States, the Soviet Union, and the Cold War (New York: Hill and Wang, 2007); Vladislav Zubok and Constantine Pleshakov, Inside the Kremlin’s Cold War: From Stalin to Khrushchev (Cambridge, MA: Harvard University Press, 1996), 138–69. The best accounts of Solarium can be found in Bowie and Immerman, Choosing Peace; Saki Dockrill, Eisenhower’s New-Look National Security Policy, 1953– 1961 (London: Macmillan, 1996). Inaugural address by President Eisenhower, 20 January 1953, PPPUS: DDE 1953, 12 January 2014. On the back story of development, Ekbladh, Great American Mission, 91 – 111; Mark Mazower, Governing the World: The History of an Idea (London: Allen Lane, 2012), 273– 81. Memorandum of Discussion, National Security Council, 11 February 1953, FRUS 1952– 1954 Vol. II Part 1, 236. Memorandum of Discussion at the 136th Meeting of the National Security Council, 11 March 1953, FRUS 1952– 1954 Vol. VIII, 1117– 25; Walt W. Rostow, Europe after Stalin: Eisenhower’s Three Decisions of March 11, 1953 (Austin: University of Texas Press, 1982), 46 – 61. Address by President Eisenhower to the American Society of Newspaper Editors, 16 April 1953, PPPUS DDE 1953, 12 November 2013; on the speech’s propaganda importance, Osgood, Total Cold War, 65 – 7. Memorandum of Discussion at the 157th Meeting of the National Security Council, 30 July 1953; memorandum by the Special Assistant on National

182

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22. 23. 24.

25. 26.

27. 28.

29.

30. 31.

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Security Affairs Robert Cutler, 31 July 1953, FRUS 1952– 1954 Vol. II Part I, 435– 7, 440; Kaufman, Trade and Aid, 12 – 58. On the New Look’s economic components, Bowie and Immerman, Waging Peace, 144– 211. NSC 162/2, Basic National Security Policy, 30 October 1953, FRUS 1952– 1954 Vol. II Part I, 577– 88. Grant Madsen, ‘The International Origins of Dwight D. Eisenhower’s Political Economy’, Journal of Policy History, Vol. 24, No. 4 (2012), 675– 709; Robert Griffith, ‘Dwight D. Eisenhower and the Corporate Commonwealth’, American Historical Review, Vol. 87, No. 1 (February 1982), 88 – 121; John Sloan, Eisenhower and the Management of Prosperity (Lawrence: University Press of Kansas, 1991). David Reynolds, America, Empire of Liberty: A New History (London: Allen Lane, 2009), 389– 90. Dwight Eisenhower, Mandate for Change: The White House Years, 1953– 1956 (New York: Doubleday and Company, Inc., 1963), 124. Address made by John Moors Cabot before the Export-Import Club of the Columbus Chamber of Commerce, Ohio, 16 December 1953, Department of State Bulletin (hereafter DOSB) 30, 11 January 1954, 48; Gilderhus, The Second Century, 153. Survey of Current Business, US Department of Commerce Report, December 1953 (Washington: US Government Printing Office, 1953). Eric Helleiner, ‘Dollarization Diplomacy: US Policy toward Latin America Coming Full Circle?’, TIPEC Working Paper, at www.trentu.ca/org/tipec/ 2helleiner8.pdf, accessed 12 January 2014; Luiz Carlos Bresser-Pereira, ‘From Old to New Developmentalism in Latin America’, in Jose Antonio Ocampo (ed.), Handbook of Latin American Economics (Oxford: Oxford University Press, 2009), 108– 29. Eisenhower, Mandate for Change, 420– 1. John Foster Dulles, ‘A Policy of Boldness: A New Foreign Policy’, Life, 19 May 1952, Box 286, John Foster Dulles Papers, Seeley Mudd Library, Princeton University (hereafter SMLP); William Inboden, The Soul of Containment: Religion and American Foreign Policy, 1945– 1960 (New York: Cambridge University Press, 2008), 226– 57. Dulles quote to Senate Foreign Relations Committee in Rabe, Eisenhower, 29; Dulles, of course, was prone to overstatement at times on matters such as this: Gabriel and Joyce Kolko, The Limits of Power: The World and United States Foreign Policy 1945– 1954 (New York: Harper and Row, 1972), 678. NSC Staff Study – Annex to NSC 144, 6 March 1953, NSC 144 – Latin America (2), Box 4, Office of the Special Assistant for National Security Affairs, EL. Pruessen, The Road to Power, 238– 40; Gilderhus, The Second Century, 116– 22; J. Tillapaugh, ‘Closed Hemisphere and Open World? The Dispute over Regional Security at the UN Conference, 1945’, Diplomatic History, Vol. 2,

NOTES

32. 33.

34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48.

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No. 1 (January 1978), 25 – 42; Michael Donoghue, ‘Harry S. Truman’s Latin American Policy’, in Daniel S. Margolies (ed.), A Companion to Harry S. Truman (Malden, MA: Blackwell Publishing Ltd, 2012), 389– 410. National Intelligence Estimate – NIE 64: ‘Soviet Bloc Capabilities through mid-1953’, 12 November 1952, at www.foia.cia.gov/docs/DOC_0000269288/ DOC_0000269288.pdf, accessed 28 May 2011. Anna Kasten Nelson, ‘The “Top of Policy Hill”: President Eisenhower and the National Security Council’. Diplomatic History, Vol. 6 (Fall 1983), 307– 26; for a broader discussion of the NSC system, Andrew Preston, ‘The Little State Department: McGeorge Bundy and the National Security Council Staff, 1961– 1965’, Presidential Studies Quarterly, Vol. 31, No. 4 (December 2001), 635– 59. Memorandum of Discussion at the 132nd Meeting of the National Security Council, 18 February 1953, DDE Papers, NSC Series, Whitman File, EL. NSC Staff Study – Annex to NSC 144, 6 March 1953, NSC 144 – Latin America (2), Box 4, Office of the Special Assistant for National Security Affairs, EL. NSC Staff Study – Annex to NSC 144, 6 March 1953, NSC 144 – Latin America (2), Box 4, Office of the Special Assistant for National Security Affairs, EL. NSC Staff Study – Annex to NSC 144, 6 March 1953, NSC 144 – Latin America (2), Box 4, Office of the Special Assistant for National Security Affairs, EL; Park, Latin American Underdevelopment, 167– 77. Memorandum of Discussion at the 137th Meeting of the National Security Council, 18 March 1953, FRUS 1952– 1954 Vol. IV, 2 – 6. NSC 144/1 Statement of Policy by the National Security Council, 18 March 1953, FRUS 1952– 1954 Vol. IV, 6 – 10. For a strong analysis of this aspect of the document, Rabe, Eisenhower, 31 – 4. NSC 144/1 Statement of Policy by the National Security Council, 18 March 1953, FRUS 1952– 1954 Vol. IV, 6 – 10. Memorandum by Norman Pearson of the Bureau of Inter-American Affairs to John Moors Cabot, 13 March 1953, FRUS 1952– 1954 Vol. IV, 187– 9. Rabe, Eisenhower, 33 – 6. Cabinet meeting of 3 July 1953, Box 2, Cabinet Series, Whitman File, EL; Loayza, ‘An Aladdin’s Lamp’. Osgood, Total Cold War, 144. Letter from Dwight Eisenhower to H. Ramirez, 24 October 1952, Box 497, White House Central Files: Official Files, EL; ‘Rivals Pledge US as Good Neighbor’, New York Times (hereafter NYT), 1 November 1952, 13. Nixon quoted in ‘Nixon Reassures Latins on Policy’, NYT, 4 December 1952. Walter H. Waggoner, ‘Dulles to Launch Americas Policy’, NYT, 23 March 1953, 14; John Moors Cabot also made efforts on this front, ‘Hemisphere Safety Valve’, Washington Post (hereafter WP), 23 March 1953, 8.

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49. Speech by President Eisenhower to the Council of the Organization of American States, 12 April 1953, PPPUS: DDE 1953, 9 December 2013. 50. Diary entry by Emmet Hughes, 14 April 1953, Emmet Hughes Diary, SMLP; on Rockefeller and the region (particularly Brazil), Elizabeth Cobbs Hoffman, The Rich Neighbor Policy: Rockefeller and Kaiser in Brazil (New Haven: Yale University Press, 1992); Justin Hart, Empire of Ideas: The Origins of Public Diplomacy and the Transformation of US Foreign Policy (New York: Oxford University Press, 2013), 30 – 7. 51. Memorandum by Walter Bedell Smith to James Lay, ‘First Progress Report on NSC 144/1’, 23 July 1953, FRUS 1952– 1954 Vol. IV, 12 – 13. 52. Brands, Cold Warriors, 31 – 7; Gilderhus, The Second Century, 150. 53. Letter from President Eisenhower to Milton Eisenhower, 3 November 1953, DDE diary August – September 53 (2), Box 3, DDE Diary Series, Whitman File, EL. 54. Memorandum from John Foster Dulles to President Eisenhower, 10 November 1953, John Foster Dulles November 1953, Box 3, Dulles – Herter Series, Whitman File, EL. 55. Memorandum from President Eisenhower to Walter Bedell Smith, 7 August 1953, DDE diary August 1953 –September 1953 (2), Box 3, DDE Diary Series, Whitman File, EL; letter from President Eisenhower to John Foster Dulles, 16 January 1954, DDE diary January 1954 (2), Box 5, DDE Diary Series, Whitman File, EL. 56. Stephen Rabe, ‘The Elusive Conference: United States Economic Relations with Latin America, 1945– 1952’ Diplomatic History, Vol. 2, No. 3 (July 1978), 279– 94. 57. Diary Entry by Emmet Hughes, 19 March 1953, Emmet Hughes Diary, SMLP. 58. Memorandum from Daniel N. Arzac to C.D. Jackson, 20 August 1953, PSB 091.4 Latin America, Box 15, Psychological Strategy Board Central File Series, NSC Staff Papers, EL; memorandum by Samuel Waugh to John Hickerson, June 19, 1953; Special Report of the United States Delegation to the Sixteenth Session of the Economic and Social Council, Geneva, 30 June – 5 August 1953. FRUS 1952– 1954 Vol. I Part I, 273– 9. 59. Edgar Dosman, The Life and Times of Raul Prebisch, 1901 –1986 (Montreal: McGill-Queen’s University Press, 2008); Oscar Guardiola-Rivera, What if Latin America Ruled the World? How the South Will Take the North into the 22nd Century (London: Bloomsbury, 2011), 241– 53. 60. ‘Latin American Relations’, NYT, 26 May 1953, 28; Marquis Childs, ‘US Prone to Take Latins for Granted’, WP, 16 June 1953, 12. 61. Memorandum from Walter Bedell Smith to James Lay, ‘First Progress Report on NSC 144/1’, 23 July 1953, FRUS 1952– 1954 Vol. IV; memorandum from Walter Bedell Smith to James Lay, ‘Second Progress Report on NSC 144/1’, November 20, 1953, FRUS 1952– 1954 Vol. IV. 62. Loan figures taken from, Rabe, Eisenhower, 66; on the World Bank, Michael Adamson, ‘“The Most Important Single Aspect of Our Foreign Policy?”

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68. 69. 70. 71.

72. 73. 74. 75.

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77.

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The Eisenhower Administration, Foreign Aid, and the Third World’, in Statler and Johns, The Eisenhower Administration, the Third World, and the Globalization of the Cold War, 50 – 55. Brands, Cold Warriors, 31 – 7; Gilderhus, The Second Century, 150. ‘Dr. Eisenhower says South America Needs US Capital for Development’, NYT, 5 August 1953, 6; ‘The Americas: The Eisenhower Report’, Time, 30 November 1953. ‘US Firms Have $5 billion Invested in South America’, WP, 18 October 1953, M3; ‘Help for Latin America’, WP, 16 October 1953, 26. Dr Milton Eisenhower’s Report to the President on United States – Latin American Relations, November 1953, Box 4, Milton Eisenhower Papers, EL. Dr. Milton Eisenhower’s Report to the President on United States – Latin American Relations, November 1953, Box 4, Milton Eisenhower Papers, EL; Chalmers Roberts, ‘Ike’s Brother Urges Trade Consistency’, WP, 22 November 1953, M9. NSC 5407, ‘Report Prepared for the National Security Council’, 17 February 1954, FRUS 1952– 1954 Vol. IV, 208– 17. ‘The Challenge for Private Enterprise in Latin America’, address by Robert Woodward before the League of Women Voters of Massachusetts, Cambridge, 27 January 1954, DOSB 30, 15 February 1954, 234– 8. ‘Senate Urges Expansion of Latin American Business’, WP, 17 March 1954, 12. Piero Gleijeses, Shattered Hope: The Guatemalan Revolution and the United States, 1944– 1954 (Princeton, NJ: Princeton University Press, 1992), ch. 10; Rabe, Eisenhower, 49 – 53; Richard Immerman, The CIA in Guatemala: The Foreign Policy of Intervention (Austin: University of Texas Press, 1983). Max Paul Friedman, ‘Fracas in Caracas: Latin American Diplomatic Resistance to United States Intervention in Guatemala in 1954’, Diplomacy and Statecraft, Vol. 21, No. 4 (November 2010), 669– 89; Rabe, ‘The Elusive Conference’. Memorandum by John Dreier to John Moors Cabot, 5 January 1954, FRUS 1952– 1954 Vol. IV, 264– 5. Memorandum from John Moors Cabot to John Foster Dulles, 13 January 1954, FRUS 1952– 1954 Vol. IV, 266– 7. Memorandum from Daniel Arzac to Dr Horace Craig, 4 February 1954, OCB 091.4 Latin America (FILE#1) (1) December 1953 – March 1954, Box 71, OCB Central File Series, EL; ‘No Policy at Caracas’, WP, 10 January 1954, B4. Memorandum from John Moors Cabot to Walter Bedell Smith, February 10, 1954 containing attachments, FRUS 1952– 1954 Vol. IV, 278– 292; on offers of assistance during the conference, telegram from Walter Bedell Smith to John Foster Dulles, 6 March 1954; telegram from the Walter Bedell Smith to John Foster Dulles, 9 March 1954, FRUS 1952– 1954 Vol. IV, 302–3. ‘The Spirit of Inter-American Unity’, address by Secretary Dulles to the Tenth Inter-American Conference, Caracas, Venezuela, 4 March 1954, DOSB, 30, 15 March 1954, 379– 83.

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78. Statement by Secretary Dulles to Committee II of the Tenth Inter-American Conference, 10 March 1954, in ‘Report of the Delegation of the United States of America on the Tenth Inter-American Conference, March 1 – 28 1954’, Folder 76, Box 11, R. Richard Rubottom Papers, De Golyer Library, Southern Methodist University, Dallas Texas (hereafter Rubottom Papers). 79. Statement by Assistant Secretary of State Samuel Waugh to the Tenth InterAmerican Conference, Caracas, Venezuela, 10 March 1954, DOSB, 30, 22 March 1954, 427– 31. 80. Report prepared in the Department of State on Economic Matters at Caracas (undated), April 1954, FRUS 1952– 1954 Vol. IV, 306– 311; ‘Final Act of the Tenth Inter-American Conference in Caracas, March 28, 1954’, Folder 76, Box 11, Rubottom Papers. 81. Memorandum of Discussion at the 189th Meeting of the National Security Council, 18 March 1954, FRUS 1952– 1954 Vol. IV, 304– 9. 82. Report prepared in the Department of State on Economic Matters at Caracas (undated), April 1954, FRUS 1952– 1954 Vol. IV, 309– 11. 83. Report prepared in the Department of State on Economic Matters at Caracas (undated), April 1954, FRUS 1952– 1954 Vol. IV, 309– 11.

Chapter 2 Strategic and Economic Interventions from Guatemala to the Rio Conference 1. Michael Haefele, ‘Walt Rostow’s Stages of Economic Growth: Ideas and Action’, in David Engerman, Nils Gilman, Mark Haefele and Michael Latham (eds), Staging Growth: Modernization, Development, and the Global Cold War (Boston: University of Massachusetts Press, 2003), 84 – 5. 2. ‘Notes on Foreign Economic Policy’, 15 May 1954, Princeton Economic Conference 5/54 – Draft Papers, Box 82, C.D. Jackson Papers, EL. 3. ‘World Economic Policy – A Simple Outline of a Great Opportunity for the United States’, May 1954, Princeton Economic Conference 5/54 – Draft Papers, Box 82, C.D. Jackson Papers, EL. 4. Walt Rostow and Max Millikan, A Proposal: Key to an Effective Foreign Policy (New York: Harper & Bros, 1957); David Grossman Armstrong, ‘The True Believer: Walt Whitman Rostow and the Path to Vietnam’, Part 1 (PhD diss.: University of Texas at Austin, 2000), 307– 14; David Milne, America’s Rasputin: Walt Rostow and the Vietnam War (New York: Hill and Wang, 2008), ch. 2. 5. ‘Expansion of Domestic and Foreign Prosperity’, President Eisenhower’s Economic Report to Congress, 28 January 1954, DOSB, 30, 15 February 1954, 219– 22. 6. Special Message to the Congress on Foreign Economic Policy, 30 March 1954, PPPUS: 1954 Dwight D. Eisenhower, 12 June 2011; Kaufman, Trade and Aid, 17 – 26; Sloan, Eisenhower and the Management of Prosperity, 126. 7. ‘The Americas: On the March’, Time, 4 January 1954.

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8. ‘Third Progress Report on NSC 144/1, United States Objectives and Courses of Action with Respect to Latin America’, 25 May 1954, FRUS 1952– 1954 Vol. IV, 45 – 64. 9. Randall Woods, ‘Conflict or Community? The United States and Argentina’s Admission to the United Nations’, Pacific Historical Review, Vol. 46, No. 3 (August 1977), 361– 86; Lloyd Gardner, Economic Aspects of New Deal Diplomacy (Madison: University of Wisconsin Press, 1964), 201– 5. 10. Speech by President Pero´n, ‘What is Peronism?’ 20 August 1948, Modern History Sourcebook, Fordham University, at www.fordham.edu/halsall/mod/ 1950peronism2.html, accessed 22 February 2014; Glenn Dorn, ‘Peron’s Gambit: The United States and the Argentine Challenge to the Inter-American Order, 1946– 1948’, Diplomatic History, Vol. 26, No. 1 (Winter 2002), 1 – 20; Robert Beisner, Dean Acheson: A Life in the Cold War (New York: Oxford University Press, 2006), 570– 4; Howard Schaffer, Ellsworth Bunker: Global Troubleshooter, Vietnam Hawk (Chapel Hill: University of North Carolina Press, 2003), 23 – 36. 11. Rabe, Eisenhower, 36 – 8; on the press and Congress, ‘Peron Intensifies War on US Press Groups’, Los Angeles Times (hereafter LAT), 10 May 1953, 2; ‘The Hemisphere: Press Freeze Out’, Time, 18 May 1953; ‘Peron and the Press’, NYT, 3 May 1953, E8. 12. Memorandum from Foster Dulles to President Eisenhower, 18 June 1953, FRUS 1952 – 1954 Vol. IV, 440 – 1; Milton Eisenhower, The Wine Is Bitter, 64 – 6. 13. David Sheinin, Argentina and the United States: An Alliance Contained (Athens: University of Georgia Press, 2006), 106– 8; Milton Eisenhower quote to President Eisenhower in, Rabe, Eisenhower, 37 –8. 14. ‘Peron Gives Eisenhower High Praise’, LAT, 18 October 1953, 32; ‘Peron Lauds Ike’, WP, 18 October 1953. 15. Sheinin, Argentina and the United States, 106– 10. 16. NIE-91–54, ‘Probable Developments in Argentina’, 9 March 1954, CIA Reading Room, at www.foia.cia.gov/docs/DOC_0000119709/DOC_0000119709.pdf, accessed 16 September 2011; memorandum of a conversation by Durward Sandifer, 24 March 1954, FRUS 1952– 1954 Vol. IV, 467– 8. 17. Memorandum by James O’Connor to Tapley Bennett, 30 June 1954, FRUS 1952– 1954 Vol. IV, 469; ‘Balance Sheet: US– Argentine Relations’, paper prepared in the Office of South American Affairs, 17 August 1954, FRUS 1952– 1954 Vol. IV, 471– 3; ‘Argentina: A Pair of Deals’, Time, 27 September 1954. 18. Memorandum from Tapley Bennett to Henry Holland, 20 August 1954, FRUS 1952– 1954 Vol. IV, 229– 50, quotes at 245– 7. 19. Memorandum of conversation with President Pero´n by Henry Holland, 19 September 1954, FRUS 1952– 1954 Vol. IV, 473– 7. 20. Sheinin, Argentina and the United States, 108– 9. 21. ‘Argentina: Doing Business with Peron’, Time, 18 October 1954.

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22. Memorandum of a conversation with President Peron by Henry Holland, 6 December 1954, FRUS 1952– 1954 Vol. IV, 481– 4; ‘Holland and Peron have 4-Hour Talk’, NYT, 20 September 1954, 20. 23. On US– Brazilian relations before 1953, Robert Levine, Father of the Poor? Vargas and His Era (New York: Cambridge University Press, 1998); Thomas Skidmore, Politics in Brazil, 1930 –1964: An Experiment in Democracy (Oxford: Oxford University Press, 1967); Joseph Smith, A History of Brazil, 1500– 2000: Politics, Economy, Society, Diplomacy (London: Pearson Educational, 2002); Stanley Hilton, ‘The United States, Brazil, and the Cold War, 1945– 1960: End of the Special Relationship’, Journal of American History, Vol. 68, No. 3 (December 1981), 599– 624. 24. Simon Hanson, ‘Brazilian– American Relations: Case Study in American Foreign Policy’, Inter-American Economic Affairs, Vol. 5 (1952), 3 – 35, 34 – 5; Skidmore, Politics in Brazil, 115– 18; Michael W. Weis, Cold Warriors & Coups d’Etat: Brazilian – American Relations, 1945– 1964 (Albuquerque: University of New Mexico Press, 1993), 56. 25. Memorandum from Thomas Mann to Foster Dulles, 20 February 1953, FRUS 1952– 1954 Vol. IV, 607– 8. 26. Phone call between President Eisenhower and Foster Dulles, 20 February 1953; phone call between Foster Dulles and George Humphrey, 20 February 1953; phone call between Foster Dulles and Ed Miller, 20 February 1953, telephone memoranda January – April 1953, Box 1, Telephone Calls Series, John Foster Dulles Papers, EL. 27. Minutes of the Secretary’s staff meeting, Department of State, 24 February 1953, FRUS 1952– 1954 Vol. IV, 608– 609; minutes of the Cabinet meeting of 3 July 1953, Box 2, Cabinet Series, Whitman File, EL; Drew Pearson, ‘C.D. Jackson Backed Loan for Brazil’, WP, 20 March 1953, 40. 28. Gerald Haines, The Americanization of Brazil: A Study of US Cold War Diplomacy in the Third World, 1945–1954 (Wilmington, DE: Scholarly Resources Inc., 1989), 76 – 9; memorandum from Foster Dulles to President Eisenhower, 10 November 1953, John Foster Dulles, November 1953, Brazil (11), Box 4, International Series, Whitman File, EL; ‘Melancholy Anniversary’, Time, 16 February 1953; Skidmore, Politics in Brazil, 118– 9. 29. Letter from Walter N. Walmsley to John Moors Cabot, 21 March 1953, Folder Brazil, Box 1, RG 59, Entry 1131, Country File, Lot 56 D 13, National Archives, College Park, MD (hereafter NARA); memorandum for the executive officer of the OCB by Charles H. Taquey, 6 May 1954, OCB 091.4, Latin America (File#1) (4) March – June 1954, Box 71, OCB Central File Series, EL. 30. Weis, Cold Warriors & Coups d’Etats. 31. Memorandum of a conversation between President Eisenhower, Amaral Peixoto and John Moors Cabot, 7 May 1953, Brazil (11), Box 4, International Series, Whitman File, EL; telegram from John Foster Dulles to the embassy in Brazil, 8 May 1953, FRUS 1952 –1954 Vol. IV, 613– 6.

NOTES

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189

32. Letter from Walter Walmsley to John Moors Cabot, 20 November 1953, Folder Brazil, Box 1, Record Group 59, Entry 1131, Lot 56 D 13, NARA; NIE-86, National Intelligence Estimate, December 4, 1953, FRUS 1952– 1954 Vol. IV, 633– 45; memorandum of a conversation between Henry Holland and Joa˜o Carlos Muniz, 20 April 1954; memorandum from Henry Holland to Herbert Hoover Jr, 29 April 1954, Folder Brazil 1954, Box 2, Record Group 59, Entry 1132, Lot 57 D 294, NARA. 33. Memorandum from John Foster Dulles to James C. Dunn, 31 August 1954, John Foster Dulles Chronological – August 1954 (1), Box 9, General Correspondence and Memoranda Series, John Foster Dulles Papers, EL. 34. Discussion at the 212th meeting of the National Security Council, 3 September 1954, Box 6, NSC Series, Whitman File, EL; Skidmore, Politics in Brazil, 143 – 4. 35. Rabe, Eisenhower, 77 – 80; Cole Blasier, The Hovering Giant: US Responses to Revolutionary Change in Latin America (Pittsburgh: University of Pittsburgh Press, 1976; revised edn 1985); Kenneth Lehman, ‘Revolutions and Attributions: Making Sense of Eisenhower Administration Polices in Bolivia and Guatemala’, Diplomatic History, Vol. 21, No. 2 (Spring 1997), 185– 213; James Siekmeier, The Bolivian Revolution and the United States, 1952 to the Present (University Park: Pennsylvania State University Press, 2011). 36. Glenn Dorn, ‘Pushing Tin: U.S.– Bolivian Relations and the Coming of the National Revolution’, Diplomatic History, Vol. 35, No. 2 (April 2011), 203– 29; Ann Zulawski, ‘The National Revolution and Bolivia in the 1950s: What did Che See?’, in Paulo Drinot (ed.), Che’s Travels: The Making of a Revolutionary in 1950s Latin America (Durham, NC: Duke University Press, 2010), 181– 210; ‘RFC’s Revolution’, WP, 16 April 1952, 14. 37. ‘Bolivia Plans for Modified Control of Tin’, WP, 20 April 1952, 6; James Siekmeier, ‘Trailblazer Diplomat: Bolivian Ambassador Vı´ctor Andrade Uzquiano’s Efforts to In?uence U.S. Policy, 1944– 1962’, Diplomatic History, Vol. 28, No. 3 (June 2004), 385– 406. 38. Beisner, Dean Acheson, 575– 6; Siekmeier, ‘Trailblazer Diplomat’, 393– 8. 39. Telegram from Foster Dulles to the US embassy in Bolivia, 12 March 1953, FRUS 1952– 1954 Vol. IV, 522– 3. 40. Chalmers Roberts, ‘Bolivian Asks US Deeds, Not Words’, WP, 4 June 1953, 3; memorandum of a conversation, 22 June 1953, FRUS 1952–1954 Vol. IV, 532– 3; ‘Tin and Foreign Policy’, WP, 22 June 1953, 6. 41. Minutes of a Cabinet meeting, 3 July 1953, Box 4, Whitman File, EL; ‘US Offers Bolivia More Economic Aid’, WP, 7 July 1953, 12; ‘US Expands Aid to Bolivia in Tin Crisis’, WP, 15 October 1953, 3; Zulawski, ‘The National Revolution and Bolivia in the 1950s’, 190– 1. 42. Letter from President Eisenhower to President Paz Estenssoro, 14 October 1953, PPPUS: DDE 1953, 23 October 2013; ‘Help for Latin America’, WP, 16 October 1953, 26; ‘Bolivia to Get 2000 Tons of US Wheat’, LAT, 22 November 1953, 12.

190

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51 –54

43. NIE 92 – 54, ‘Probable Developments in Bolivia’, 19 March 1954, CIA Reading Room, at www.foia.cia.gov/docs/DOC_0000119710/DOC_0000119710.pdf, accessed 5 October 2011; ‘Bolivians to ask for more US Help’, WP, 13 February 1954, 8; Milton Eisenhower, The Wine Is Bitter, 68. 44. ‘Tin From Bolivia’, WP, 10 May 1954, 8; ‘Deal for Bolivia Tin Ore Reported’, LAT, 6 June 1954, 11. 45. ‘The Americas: Thanks’, Time, 11 October 1954. 46. Memorandum of a conversation with Bolivian president Paz Estenssoro by Henry Holland, 30 September 1954, FRUS 1952 – 1954 Vol. IV, 566 – 7. 47. Field, ‘Ideology as Strategy’; Lehman, ‘Revolutions and Attributions’, 210– 13. 48. The Guatemalan episode has been subjected to much study and assessment. A good sample can be found in Gleijses, Shattered Hope; Immerman, The CIA in Guatemala; Jim Handy, ‘“The Most Precious Fruit of the Revolution”: The Guatemalan Agrarian Reform, 1952–54’, Hispanic American Historical Review, Vol. 68, No. 4 (1988), 675–705; Stephen Schlesinger and Stephen Kinzer, Bitter Fruit: The Story of the American Coup in Guatemala, revised edn (Cambridge, MA: Harvard University Press, 2005); Nick Cullather, Secret History: The CIA’s Classified Account of Its Operations in Guatemala, 1952–1954 (Stanford, CA: Stanford University Press, 1999). 49. Grandin, ‘Off the Beach’, 435– 7; Gleijeses, Shattered Hope; Cullather, Secret History. 50. For accounts of this pressure coming from different areas, LaFeber, Inevitable Revolutions, 121– 7; Max Holland, ‘Private Sources of US Foreign Policy: William Pawley and the 1954 Coup d’Etat in Guatemala’, Journal of Cold War Studies, Vol. 7, No. 4 (Fall 2005), 36 – 73; Michael Grow, US Presidents and Latin American Interventions: Pursuing Regime Change in the Cold War (Lawrence: University Press of Kansas, 2008), 1 – 28. 51. Time magazine, in particular, as they had with Mossadiq in Iran, would play a major part in shaping public perceptions of A´rbenz. See John Foran, ‘Discursive Subversions: Time Magazine, the CIA Overthrow of Mussadiq, and the Installation of the Shah’, in Christian Appy (ed.), Cold War Constructions: The Political Culture of United States Imperialism, 1945– 1966 (Amherst: University of Massachusetts Press, 2006), 157–83. 52. ‘Probable Developments in Guatemala’, National Intelligence Estimate, May 19, 1953, FRUS 1952– 1954 Vol. IV, 1061–3. 53. Memorandum for the record, by the director of Central Intelligence Allen Dulles, 8 March 1953, FRUS 1952– 1954 Guatemala, 79. 54. Westad, Global Cold War, 146– 9; Friedman, Rethinking Anti-Americanism, 130– 5. 55. Memorandum from John Leddy to John Moors Cabot, 21 May 1953, FRUS 1952– 1954 Vol. IV, 1071– 3; special paper prepared in the Division of Research for Latin America, Department of State, 26 May 1953, FRUS 1952– 1954 Guatemala, 81; ‘NSC Guatemala’, Draft Policy Paper Prepared in the

NOTES

56. 57.

58. 59. 60. 61. 62. 63. 64. 65. 66.

67. 68. 69.

70. 71.

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Bureau of Inter-American Affairs, 19 August 1953, FRUS 1952– 1954 Vol. IV, 1074– 87. Friedman, ‘Fracas in Caracas’, 669– 89; Gleijeses, Shattered Hope, ch. 10; Immerman, The CIA in Guatemala. Eisenhower, Mandate for Change, 424–7; Cullather, Secret History, 98 – 9; Gleijeses, Shattered Hope; on the devastating impact in Guatemala, Greg Grandin, The Last Colonial Massacre: Latin America in the Cold War (Chicago: The University of Chicago Press, 2004). The president’s news conference, 30 June 1954; address at the Illinois State Fair, Springfield, 11 August 1954, PPPUS: DDE 1954, 12 January 2013. Osgood, Total Cold War, 146– 8; Rabe, Eisenhower, 83 –2; ‘State Visit’, Time, 14 November 1955. CIA memorandum by the chief of the Information Coordinating Division for the acting chief of Psychological and Paramilitary Operations Staff, 26 July 1954, CIA Reading Room, at www.foia.cia.gov, accessed 25 February 2009. Max Paul Friedman, ‘Anti-Americanism and US Foreign Relations’, Diplomatic History, Vol. 32, No. 4 (September 2008), 497– 51. Weiss quoted in Hove, ‘The Arbenz Factor’, 662. Rabe, Eisenhower, 70; Gilderhus, The Second Century, 150– 2; Siekmeier, Aid, Nationalism and Inter-American Relations, 184. Memorandum of conversation on a ‘Proposal for a New U.S. Foreign Economic Policy’, 24 August 1954, FRUS 1952– 1954 Vol. I, 83 – 6. Memorandum of conversation on a ‘Proposal for a New U.S. Foreign Economic Policy’, 24 August 1954, FRUS 1952– 1954 Vol. I, 83 – 6. Draft policy document by the NSC Planning Board for the National Security Council, 18 August 1954, Box 13, NSC 5432/1 Policy toward Latin America, White House Office – Office of the Special Assistant for National Security Affairs, NSC Series – Policy Papers Sub-series, EL. David Tal, ‘The Secretary of State versus the Secretary of Peace: The Dulles – Stassen Controversy and US Disarmament Policy, 1955– 1958’, Journal of Contemporary History, Vol. 41, No. 4 (October 2006), 720–41. Minutes of a Meeting of the Foreign Operations Administration, Executive Office Building, 21 June 1954, FRUS 1952– 1954 Vol. IV, 321– 5. Memorandum from Marion Hardesty to Harold Stassen, 19 July 1954, FRUS 1952– 1954 Vol. IV, 325 –7; suggested FOA draft letter for transmittal from the OCB to the NSC, 16 July 1954, OCB 091.4 Latin America (File#2) (2) July – December 1954, Box 72, OCB Central Files Series, EL. Memorandum from Robert Woodward to the executive officer of the OCB, ‘Special Report on the Implementation of NSC 144/1’, 30 June 1954, OCB 091.4 Latin America (File#1) (8) March– June 1954, Box 72, OCB Series, EL. Memorandum from Charles Norberg to Byron Enyart on the psychological framework for the Rio Economic Conference, 14 September 1954, OCB 091.4 Latin America (File#2) (5) July – December 1954, Box 72, OCB Central File Series, EL.

192

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59 – 63

72. Paper prepared by the Sub-Cabinet Committee on the Rio de Janeiro Economic Conference, 30 July 1954, Latin America (8), Box 5, Special Staff Series, NSC Staff Papers 1953– 1961, White House Office Staff, EL. 73. Letter from Dennis Fitzgerald to Harold Stassen, 22 July 1954; letter from Dennis Fitzgerald to Harold Stassen, 17 August 1954, Reading File – June 1954– December 1954 (6), Box 35, Series II, Dennis Fitzgerald Papers, EL. 74. Memorandum from Henry Holland to Walter Bedell Smith, 31 August 1954, FRUS 1952 – 1954 Vol. IV, 65 – 6; memorandum by Henry Holland to Walter Bedell Smith, 1 September 1954; letter from Henry Holland to Robert Woodward, 19 September 1954, FRUS 1952 – 1954 Vol. IV, 327 – 35. 75. Memorandum of discussion at the 212th meeting of the National Security Council, 2 September 1954, FRUS Vol. IV, 67 – 80; Zoumaras, ‘Eisenhower’s Foreign Economic Policy’, 164– 6. 76. NSC 5432/1 ‘United States Objectives and Courses of Action with Respect to Latin America’, 3 September 1954, FRUS 1952– 1954 Vol. IV, 81 – 6. 77. Paper prepared by the Latin American Working Group of the Operations Coordinating Board, 11 October 1954, FRUS 1952– 1954 Vol. IV, 335– 8. 78. Telegram from the Canadian ambassador to the United States to the Canadian Secretary of State for External Affairs, 22 October 1954, Documents on Canadian External Relations, Vol. 20, ch. VIII, at www.international.gc.ca/ department/history-histoire/dcer/details-en.asp?intRefid¼ 563, accessed 12 January 2012. 79. Memorandum of discussion at the 224th meeting of the National Security Council, 15 November 1954, FRUS 1952– 1954 Vol. IV, 344– 52. 80. Statement by George Humphrey at the Meeting of Ministers of Finance or Economy at the Rio de Janeiro Economic Conference, 23 November 1954, DOSB, 31, 6 December 1954, 863– 9. 81. ‘US Offers Partner Role to Aid Latin American Economy’, WP, 24 November 1954, 1; Chalmers Roberts, ‘US Shapes Policy for Latin American Aid’, WP, 19 October 1954, 11; ‘Progress at Rio’, WP, 2 December 1954, 16. 82. Forwarded clip of New York Times article, 24 November 1954, Henry Cabot Lodge 1954 (3), Box 24, Administration Series, Whitman File, EL. 83. Memorandum of a meeting of certain members of the United States delegation, Quitandinha, 25 November 1954, FRUS 1952– 1954 Vol. IV, 352– 7; memorandum of a meeting of certain members of the United States delegation, Quitandinha, 30 November 1954, FRUS 1952– 1954 Vol. IV, 358– 60. 84. Rabe, Eisenhower, 70 – 7; Michael Weis, Cold Warriors & Coups d’Etats, 82 – 5. 85. Telegram from Herbert Hoover Jr to Foster Dulles, 1 December 1954, FRUS 1952– 1954 Vol. IV, 361– 2. 86. Minutes of a Cabinet meeting, 3 December 1954, Box 2, Cabinet Series, EL. 87. Letter from President Eisenhower to Milton Eisenhower, 1 December 1954, DDE diary December 1954 (2), Box 8, DDE Diary Series, Ann Whitman File, Eisenhower Library.

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88. Greg Grandin, ‘Your Americanism and Mine: Americanism and AntiAmericanism in the Americas’, American Historical Review, Vol. 111, No. 4 (October 2006), 1042– 69; Friedman, Rethinking Anti-Americanism, ch. 4; Cindy Forster, ‘“Not in All of America Can There Be a Country as Democratic as This One”: Che and Revolution in Guatemala’, in Paulo Drinot, Che’s Travels, 210– 37. 89. Annual budget message to the Congress by President Eisenhower, 17 January 1955, PPPUS: DDE 1955, 23 January 2012.

Chapter 3 Confronting Moscow? 1. Bulganin quoted in Rabe, Eisenhower, 90. 2. Interview given by Nikolai Bulganin to a correspondent of Pravda, 17 January 1956 in Stephen Clissold (ed.), Soviet Relations with Latin America, 1918– 1968: A Documentary Survey (London: Oxford University Press, 1970), 158–9; on Soviet intentions in Latin America, Cole Blasier, The Giant’s Rival: The USSR and Latin America (Pittsburgh: University of Pittsburgh Press, 1983). 3. Memorandum of Discussion at the 320th Meeting of the National Security Council, 17 April 1957, FRUS 1955– 1957 Vol. X, 182. 4. On these debates, McClenahan and Becker, Eisenhower and the Cold War Economy, 183– 225; Ekbladh, The Great American Mission, 178– 89; Engerman, ‘The Romance of Economic Development and New Histories of the Cold War’, 23 – 54; Robert McMahon, ‘The Illusion of Vulnerability: American Reassessments of the Soviet Threat, 1955– 1956’, International History Review, Vol. 18, No. 3 (1996), 591–619; Westad, Global Cold War, 26 – 32, 86 – 97. 5. Existing accounts only focus limited attention on the SEO. See Rabe, Eisenhower; Siekmeier, Aid, Nationalism and Inter-American Relations; Loayza, ‘An Aladdin’s Lamp for Free Enterprise’; for a counterargument to this, Bevan Sewell, ‘A Perfect (Free-Market) World: Economics, the Eisenhower Administration, and the Soviet Economic Offensive in Latin America’, Diplomatic History, Vol. 32, No. 5 (November 2008), 841– 68. 6. Rabe, Eisenhower, 91. 7. State of the Union Address by President Eisenhower to Joint Session of Congress, 6 January 1955, PPPUS: DDE 1955, 25 January 2012. The use of spiritual language is telling here; see Inboden, Religion and American Foreign Policy, 1945 – 1960, 257 – 311; Andrew Preston, Sword of the Spirit, Shield of Faith: Religion in American War and Diplomacy (New York: Knopf, 2012), 440 – 65. 8. Aleksandr Fursenko and Timothy Naftali, Khrushchev’s Cold War: The Inside Story of an American Adversary (New York: W.W. Norton & Company, 2006), 57; William Taubman, Khrushchev: The Man, His Era (New York: Free Press, 2003), 325– 61; Vladislav Zubok, A Failed Empire: The Soviet Union in the Cold War from Stalin to Gorbachev, revised edn (Chapel Hill: University of North Carolina Press, 2009), 94 – 112.

194

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67 – 70

9. Special Survey of Select Soviet Bloc Economic Activities in Certain Free World Countries, produced by the CIA, September 22, 1955, CIA Reading Room, at www.foia.cia.gov/docs/DOC_0000474402/DOC_0000474402.pdf, accessed 20 January 2012. 10. Letter from C.D. Jackson to Nelson Rockefeller, 10 November 1955, FRUS 1955 – 1957 Vol. IX, 8 – 10; memorandum of discussion at the 266th meeting of the National Security Council, 15 November 1955, FRUS 1955 – 1957 Vol. X, 28 – 31; Engerman, ‘The Romance of Economic Development’. 11. Memorandum of discussion at the 267th meeting of the National Security Council, Camp David, 21 November 1955, FRUS 1955– 1957 Vol. IX, 32 – 7. Any kind of decision, however, remained some way off, as was demonstrated at a circuitous, lengthy and indecisive meeting of the NSC just a couple of weeks later. See memorandum of discussion at the 269th meeting of the National Security Council, Camp David, 8 December 1955, FRUS 1955–1957 Vol. X, 44 – 64. 12. Letter from President Eisenhower to John Foster Dulles, 5 December 1955, FRUS 1955– 1957 Vol. IX, 9 – 12, original emphasis. 13. Annual State of the Union Message to Congress by President Eisenhower, 5 January 1956, PPPUS: DDE 1956, 5 February 2012. 14. Memorandum of discussion at the 273rd meeting of the National Security Council, 18 January 1956, FRUS 1955– 1957 Vol. X, 64 – 8; on the issue of fostering development in Asia, Cullather, The Hungry World, 72 –159; Latham, The Right Kind of Revolution, 65 – 75. 15. Memorandum by the NSC Planning Board, February 1956, FRUS 1955– 1957 Vol. I, 193– 6; memorandum of discussion at the 277th meeting of the National Security Council, 27 February 1956, FRUS 1955– 1957 Vol. I, 201– 18. 16. Special message to Congress on the Mutual Security Program by President Eisenhower, 19 March 1956, PPPUS: DDE 1956, 8 February 2012. 17. This section draws heavily from the details provided in Kaufman, Trade and Aid, 68 – 71. 18. Press Conference by President Eisenhower, 4 May 1956, PPPUS: DDE 1956, 8 February 2012. 19. Dulles quoted in Burton Kaufman, ‘The United States Response to the Soviet Economic Offensive of the 1950s’, Diplomatic History, Vol. 2, No. 2 (April 1978), 153 – 65; for wider criticisms of Eisenhower’s policy at this point and the pressure to change course, Ekbladh, The Great American Mission, 182 – 4. 20. Study Group on United States Foreign Economic Policy, Working Paper Number 4, 6 December 1956, Council on Foreign Relations and the American Assembly (2), Box 2, Dennis Fitzgerald Papers, EL. 21. Special message to Congress on the Mutual Security Program by President Eisenhower, 19 March 1956, PPPUS: DDE 1956, 8 February 2012.

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22. National Security Council Progress Report on NSC 5432/1, 3 February 1955, NSC 5432/1 – Policy toward Latin America, Box 13, White House Office of the Special Assistant for National Security Affairs, Whitman File, EL. 23. Memorandum from Robert Crenshaw to the Executive Officer of the OCB, 9 November 1955, OCB 091.4 Latin America (File#4) (7) August – November 1955, Box 73, OCB Central File Series, EL; Alan McPherson, Yankee No! AntiAmericanism in US–Latin American Relations (Cambridge, MA: Harvard University Press, 2003), 24–5; CIA annexe to Progress Report on NSC 5432/1, 14 January 1955, CIA Reading Room, at www.foia.cia.gov/docs/DOC_0000920014/ DOC_0000920014.pdf, accessed 23 January 2012. 24. For a fuller account of this trend in US Cold War policy, David Schmitz, Thank God They’re on Our Side: The United States and Right-Wing Dictatorships, 1921– 1965 (Chapel Hill: University of North Carolina Press, 1999), ch. 5 in particular. 25. On Rockefeller’s involvement in Latin America, Cobbs, The Rich Neighbor Policy; Hart, Empire of Ideas, 31 – 48; Darlene Rivas, Missionary Capitalist: Nelson Rockefeller in Venezuela (Chapel Hill: University of North Carolina Press, 2002). 26. Memorandum of discussion at the 237th National Security Council meeting, 17 February 1955, FRUS 1955– 1957 Vol. VI, 2– 5. 27. Report by Vice President Richard Nixon on his trip to Latin America at the 240th meeting of the National Security Council, 10 March 1955, Box 6, NSC Series, Whitman File, EL. 28. National Security Council Progress Report on NSC 5432/1, 10 August 1955, FRUS 1955– 1957 Vol. VI, 6 – 13. 29. ‘Our Hemisphere’, NYT, 5 January 1955, 22; ‘Ike Confers on More Aid to Latin Area’, WP, 6 March 1955, A2; ‘Hemisphere Growth Put up to Trade’, WP, 29 March 1955, 22. 30. Memorandum of discussion at 258th meeting of the National Security Council, 8 September 1955, FRUS 1955– 1957 Vol. VI, 13 – 15. 31. Draft Paper Number 11: ‘Latin America—as a Demonstration Area of US Foreign Policy in Action’, by Stacy May, 24 September 1955, attached to memorandum by Robert Crenshaw for the members of the OCB Working Group on Latin America, 6 October 1955, OCB 091.4 – Latin America (File#4) (5) August – November 1955, Box 73, OCB Central File Series, EL. 32. NIE 80/90 – 55, National Intelligence Estimate, ‘Conditions and Trends in Latin America’, 6 December 1955, FRUS 1955– 1957 Vol. VI, 16 – 45. 33. Memorandum from Edwin T. Layton to the Joint Chiefs of Staff, December 7, 1955, OCB 091.4 Latin America (File#5) (2) December 1955, Box 73, OCB Central File Series, EL. 34. Adolf Berle, ‘Latin America Moves Slowly toward Stability’, New York Times magazine, 16 October 1955, 22. 35. ‘Bulganin and the Latins’, WP, 23 January 1956, 14. 36. ‘Red Bid to Latin America’, NYT, 18 January 1956, 30.

196

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77 –82

37. Memorandum of a conversation, Department of State, 28 December 1955, FRUS 1955– 1957 Vol. VI, 360– 1. 38. Memorandum from Henry Holland to John Foster Dulles and Herbert Hoover Jr, 17 January 1956, FRUS 1955– 1957 Vol. VI, 365– 71. 39. Memorandum of a conversation, Department of State, 18 January 1956, FRUS 1955– 1957 Vol. IV, 371– 2. 40. Memorandum from Henry Holland to John Foster Dulles, 24 February 1956, CFEP 537/1—‘US Position with Respect to an International Coffee Agreement’, Box 6, CFEP Series, EL. 41. National Security Council Progress Report, 28 March 1956, FRUS 1955– 1957 Vol. VI, 46 – 58. Emphasis in original. 42. ‘Outline Plan of Operations against Communism in Latin America’, prepared by the Operations Coordinating Board, 18 April 1956, FRUS 1955– 1957 Vol. VI, 61 – 6. 43. Circular telegram from Secretary of State Dulles to all diplomatic missions in the American republics, 16 May 1956; circular telegram from Acting Secretary of State Herbert Hoover to all diplomatic missions in the American republics, 1 June 1956, FRUS 1955– 1957 Vol. VI, 440– 3. 44. Memorandum from Acting Secretary of State Herbert Hoover to President Eisenhower, 6 July 1956, Panama (2), Box 43, International Series, Ann Whitman File, EL. 45. Briefing notes for President Eisenhower’s visit to the Panama Presidents’ Meeting, 19 July 1956, Panama Meeting of the Presidents – 1956 Briefing Papers (3), Box 3, Miscellaneous Series, Ann Whitman File, EL. 46. Briefing notes for President Eisenhower’s visit to the Panama Presidents Meeting, 19 July 1956, Panama Meeting of the Presidents – 1956 Briefing Papers (3), Box 3, Miscellaneous Series, Ann Whitman File, EL. 47. ‘Convalescent Abroad’, Time, 30 July 1956. 48. Memorandum by Harold Randall the US representative to the Inter-American Economic and Social Council, July 16, 1956, FRUS 1955 – 1957 Vol. VI, 445 – 9. 49. Milton Eisenhower, The Wine Is Bitter, 203. 50. Diary entry by President Eisenhower, 25 July 1956, in Robert Ferrell (ed.), The Eisenhower Diaries (New York: W.W. Norton, 1983), 327– 8. 51. Milton Eisenhower, The Wine Is Bitter, 10. 52. Press briefing by John Foster Dulles, Panama, 23 July 1956, Panama July (2), Box 2, International Series, Whitman File, EL. 53. On continuing Soviet efforts, Kaufman, Trade and Aid, 122–4; press conference by Premier Khrushchev, March 1958, in Clissold, Soviet Relations with Latin America, 159– 60. 54. Briefing note for President Eisenhower on NSC 5613, 4 September 1956, Latin America (2), Box No. 63, Disaster File, White House Office, EL. 55. Memorandum of discussion at the 296th meeting of the National Security Council, 6 September 1956, FRUS 1955– 1957 Vol. VI, 101– 13; Stephen

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Rabe, ‘Dulles, Latin America, and Cold War Anticommunism’, in Immerman, John Foster Dulles and the Diplomacy of the Cold War, 159– 89. NSC 5613/1 ‘Statement of Policy on U.S. Policy toward Latin America’, 25 September 1956, FRUS 1955– 1957 Vol. VI, 119– 32. NSC 5613/1 ‘Statement of Policy on U.S. Policy toward Latin America’, 25 September 1956, FRUS 1955– 1957 Vol. VI, 119– 32. Report from Thomas Kingsley to Melbourne and Crenshaw of the OCB, 14 August 1956, OCB 091.4 Latin America (File#7) (7), Box 75, OCB Central File Series, EL. Memorandum from Foster Dulles to President Eisenhower, 28 September 1956, John Foster Dulles – Chronological September 1956 (1), Box 14, JFD Chronological Series, John Foster Dulles Papers, EL. Recommendations for outline plan of operations with respect to Latin America, 7 November 1956, OCB 091.4 Latin America (File#8) (4), September – December 1956, Box 75, OCB Central Files Series, EL. Address by President Eisenhower at Miami International Airport, 29 October 1956, PPPUS: DDE 1956, 16 March 2012.

Chapter 4

You Can’t Spit on a Foreign Policy

1. Memorandum of a telephone conversation, 13 May 1958, FRUS 1958– 1960 Vol. V, 226– 7; Marvin Zahniser and Michael Weis, ‘A Diplomatic Pearl Harbor? Richard Nixon’s Goodwill Visit to Latin America in 1958’, Diplomatic History, Vol. 13, No. 2 (Spring 1989), 163– 90; Rabe, Eisenhower, ch. 6. 2. Letter from Secretary of State John Foster Dulles to Vice President Nixon, 6 March 1958, FRUS 1958– 1960 Vol. V, 222– 3. 3. ‘The Nixon Trip’, NYT, 7 May 1958, 34. 4. McPherson, Yankee No!, 26 – 33; ‘Washington Gives Mr Nixon A Hero’s Welcome’, The Times, 16 May 1958, 8; Schoultz, Beneath the United States, 350 – 5. 5. Judith Ewell, Venezuela and the United States: From Monroe’s Hemisphere to Petroleum’s Empire (Atlanta: University of Georgia Press, 1996), 195–9. 6. Existing studies have disagreed over whether it is the Nixon trip or the Cuban Revolution that provides the greatest impetus for change in this era, while other scholars – as in the case of Guatemala – have suggested that it was concerns about economic nationalism that drove the administration’s response. Nevertheless, the prevailing view is that, after 1958, US policymakers were suddenly far more concerned about Latin America. See Rabe, Eisenhower, chs 6 – 7; Zahniser and Weis, ‘A Diplomatic Pearl Harbor’; Brands, Latin America’s Cold War, 10 – 30; Taffet, Foreign Aid as Foreign Policy, 11 – 29; Gilderhus, The Second Century, 154 – 7; for the argument regarding economic nationalism, Siekmeier, Aid, Nationalism and Inter-American Relations; LaFeber, Inevitable Revolutions; for a nuanced perspective, which highlights the complex nature of inter-American relations in this era, Dustin Walcher,

198

7. 8.

9.

10. 11.

12. 13. 14.

15.

16.

17.

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89 –92

‘Petroleum Pitfalls: The United States, Argentine Nationalism, and the 1963 Oil Crisis’, Diplomatic History, Vol. 37 No. 1 (January 2013), 24 – 57. Outline Plan of Operations for Latin America Prepared for the Operations Coordinating Board, 18 April 1957, FRUS 1955– 1957 Vol. VI, 138– 42. On the influx of these advisers, see Milton Eisenhower, The Wine Is Bitter; Brands, Cold Warriors; the fullest account will be found in Thomas TunstallAllcock, ‘The First Alliance for Progress? Reshaping the Eisenhower Administration’s Latin American Policy’, Journal of Cold War Studies (Winter 2014), 85 – 110. See memorandum from Thomas Mann to Douglas Dillon, 19 November 1957, Box 1, Thomas C. Mann Papers, Baylor University, Texas (hereafter Mann Papers); on Mann’s economic position generally, transcript of Lincoln F. Gordon Oral History Interview I, 10 July 1969, by Paige Mulhollan, 8, LBJ Library, at www.lbjlibrary.net/assets/documents/archives/oral_histories/gordon_l/Gordon. pdf, accessed 23 April 2012. ‘Encouraging Economic Growth in Less Developed Countries of the Free World’, Speech by Under Secretary of State Douglas Dillon, 4 June 1957, DOSB, 37, 1 July 1957, 31 – 3. Memorandum for the record of testimony by Assistant Secretary of State Roy Rubottom to the Senate Sub-Committee on American Republics Affairs, 15 March 1957, Folder 1957 – Sub-Committee on Latin America, Senate Foreign Relations Committee, Box 4, Lot 59 D573, Entry 1135, NARA. Economic Report of the President, submitted to Congress 23 January 1957 (Washington, DC: United States Government Printing Office, 1957), 54– 5. Survey of Current Business, report by the Department of Commerce, August 1957 (Washington, DC: United States Government Printing Office, 1957), 22– 5. Memorandum from Assistant Secretary of State for Inter-American Affairs Roy Rubottom to Secretary of State Dulles, 7 May 1957, Folder 1957 – Economic, Box 2, Lot 59 D573, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files 1957– 1959, NARA. Memorandum from Deputy Assistant Secretary of State for Economic Affairs Douglas Dillon to Secretary of State Dulles, 15 May 1957, Folder 1957— Economic, Box 2, Lot 59 D573, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files 1957– 1959, NARA. Memorandum from Roy Rubottom to Douglas Dillon, 29 May 1957, Folder 1957—Economic, Box 2, Lot 59 D 573, Papers of the Assistant Secretary of State for Inter-American Affairs Roy R. Rubottom, Subject Files 1957– 1959, NARA. On the limited nature of these changes, paper by the International Development Advisory Board, April 1957, Folder Eisenhower, Dr Milton 1957, Box 2, Lot 59 D573, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files 1957– 1959, NARA.

NOTES TO PAGES 92 –95

199

18. Letter from Randolph Burgess to Milton Eisenhower, 4 June 1957, Folder Eisenhower, Dr Milton 1957, Box No. 2, Lot 59 D573, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files 1957– 1959, NARA. 19. Memorandum of a conversation, Department of the Treasury, 23 May 1957, FRUS 1955– 1957 Vol. VI, 502– 5. 20. Summary notes of a meeting of the Subcommittee on the Buenos Aires Economic Conference, Department of State, 28 May 1957, FRUS 1955– 1957 Vol. VI, 503– 7; US Position on the Major Issues Expected to be Discussed at the Economic Conference of the Organization of American States, 1 August 1957, CFEP 535 – Buenos Aires Economic Conference, Box 6, CFEP Series, EL; Siekmeier, Aid, Nationalism and Inter-American Relations, 302. 21. Memorandum from Secretary of State Dulles and Secretary of the Treasury Anderson to President Eisenhower, 5 August 1957, FRUS 1955– 1957 Vol. VI, 517– 18. 22. Joseph Newman, ‘Hemisphere Economic Parley Opens in Buenos Aires Today’, WP, 15 August 1957, A13. 23. ‘Increasing the Effectiveness of Inter-American Economic Cooperation’, address by Robert Anderson to the Inter-American Economic Meeting in Buenos Aires, 19 August 1957, DOSB, 37, 16 September 1957, 63 –9. 24. ‘UN Unit to Present Latin Market Plan’, WP, 21 August 1957, C6. 25. Memorandum of a conversation between Douglas Dillon and Raul Prebisch, 16 August 1957, FRUS 1955– 1957 Vol. VI, 521– 3. 26. Minutes of a Cabinet meeting, 23 August 1957, FRUS 1955– 1957 Vol. VI, 531– 2; ‘Hemisphere Bank Study Voted by US’, WP, 29 August 1957, A13. 27. Summary notes of a Meeting of the Delegation’s Steering Committee, 2 September 1957, FRUS 1955– 1957 Vol. VI, 554– 6. 28. Siekmeier, Aid, Nationalism and Inter-American Relations, 302– 5. 29. ‘Progress at Buenos Aires’, NYT, 4 September 1957, 32. 30. For the Latin American view, Ezequiel Padilla, ‘Hemisphere Economics’, NYT, 8 September 1957, E2. 31. Memorandum from Eric Snow to Secretary of State Dulles, 4 September 1957, FRUS 1955– 1957 Vol. VI, 557– 8. 32. Minutes of a staff meeting, 11 September 1957, FRUS 1955–1957 Vol. VI, 559–63; report produced within the Department of State, ‘Current Economic Developments’, 17 September 1957, FRUS 1955–1957 Vol. VI, 564–7. 33. Statement by President Eisenhower on the Buenos Aires economic conference, 4 September 1957, PPPUS: DDE 1957, 23 April 2012. 34. Statement by Douglas Dillon, 3 September 1957, DOSB, 37, 30 September 1957, 539– 40; ‘Inter-American Talks “Highly Gratify” US’, WP, 4 September 1957, A13. 35. Press and radio news conference by Roy Rubottom, 12 September 1957, Folder 1957 – Conference – Buenos Aires Economic, Box 2, Lot 59 D573, Entry

200

36. 37. 38. 39. 40.

41.

42.

43. 44. 45.

46. 47.

48. 49.

NOTES

TO PAGES

96 –100

1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files 1957– 1959, NARA. Telegram from Secretary Dulles to US diplomatic missions in Latin America, 21 October 1957, FRUS 1955– 1957 Vol. VI, 573– 8. ‘Aid to Latins Cited’, NYT, 19 October 1957, 4; for Rubottom’s attempt to adopt much the same line as Dulles, ‘Bright Future Seen for Latin America’, NYT, 15 November 1957, 13. Letter from Roy Rubottom to the deputy assistant secretary for international labor affairs, 23 October 1957, FRUS 1955– 1957 Vol. VI, 578– 80. Memorandum from Thomas Mann to Roy Rubottom, 9 December 1957; letter from Thomas Mann to Alma Pierce, 29 November 1957, Box 1, Mann Papers. Memorandum from Harry Turkel to Roy Rubottom and Douglas Dillon, 16 October 1957, Folder Economic 1957, Folder Eisenhower, Dr Milton 1957, Box 2, Lot 59 D573, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files, Record Group 59, NARA. Letter from Milton Eisenhower to Roy Rubottom, 25 November 1957, Folder Eisenhower, Dr Milton 1957, Box 2, Lot 59 D573, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files, Record Group 59, NARA. Letter from Assistant Secretary of State for Inter-American Affairs Roy Rubottom to Milton Eisenhower, December 17, 1957, Folder Eisenhower, Dr Milton 1957, Box 2, Lot 59 D573, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files, Record Group 59, NARA. Draft of testimony by Thomas Mann, undated but likely November – December 1957, Box 1, Mann Papers. Telegram from Roy Rubottom to Secretary of State Dulles, 26 December 1957, Box 9, Dulles – Herter Series, Whitman File, EL. Report by Maurice McAshan of the Business Advisory Council Committee on Latin America, ‘That Dollar Gap’, 24 January 1958, Folder 1958 – Business Advisory Council, Box 5, 1958 American & Foreign Power – D (Miscellaneous), Lot 60 D 553, Record Group 59, NARA. Address by Roy Rubottom to the National Coffee Association of the United States, Boca Raton, 13 January 1958, DOSB, 38, 10 February 1958, 212– 17. Letter from George Wyeth to Roy Rubottom, 26 February 1958; Report on Coffee by the Business Advisory Council’s Committee on Latin America, 31 March 1958, Folder 1958 – Business Advisory Council, Box 5, 1958 American & Foreign Power – D (Miscellaneous), Lot 60 D 553, Record Group 59, NARA. CFEP 569 – International Coffee Problem, Box 9, CFEP Series, NSC Staff Papers, EL. Memorandum from Harry Turkel to Roy Rubottom, Secretary Dulles, Thomas Mann and Douglas Dillon, 10 April 1958, Folder 1958 – Economic, Box 6 1958 Economic – Inter-American Regional Development Institution, Lot 60 D 553, Record Group 59, NARA.

NOTES

TO PAGES

100 –105

201

50. Memorandum from John Dreier to Roy Rubottom, 10 April 1958, Folder 1958 – Economic, Box 6, Record Group 59, Entry 1135, Records of the Assistant Secretary of State for Inter-American Affairs Roy Rubottom, Subject Files 1957 –9, Lot 59 D 573, NARA. 51. Address by Vice President Nixon, 15 May 1958, DOSB, 38, 9 June 1958, 950–2. 52. Minutes of Cabinet Meeting, 16 May 1958, FRUS 1958– 1960 Vol. V, 238– 9; Stephen Rabe, ‘The Caribbean Triangle: Betancourt, Castro, and Trujillo and US Foreign Policy, 1958 –1963’, Diplomatic History, Vol. 20, No. 1 (Winter 1996), 57. 53. Memorandum from the director of Central Intelligence Allen Dulles to the Secretary of State John Foster Dulles, 27 May 1958, FRUS 1958– 1960 Vol. V, 252– 5; memorandum of discussion at the 366th meeting of the National Security Council, 22 May 1958, Box No. 10, NSC Series, Whitman File, EL. 54. Memorandum from Eric Snow to Secretary of State Dulles, 15 May 1958, 1958 – IBRD – N (Miscellaneous), Box 7, Papers of the Assistant Secretary of State for Latin American Affairs Roy R. Rubottom, Lot 60 D 553, Record Group 59, NARA; this point was also made by other officials in testimony to Congress, particularly Robert Murphy. See Schoultz, Beneath the United States, 353. 55. Memorandum of discussion at the 366th meeting of the National Security Council, 22 May 1958, Box 10, NSC Series, Whitman File, EL. 56. Report from the Operations Coordinating Board to the National Security Council, ‘Report on Latin America’, 21 May 1958, FRUS 1958– 1960 Vol. V, 2 – 13; OCB Report on Latin America for President Eisenhower, 19 June 1958, 369th meeting of the National Security Council, Box 10, NSC Series, Whitman File, EL. 57. Memorandum of discussion at the 369th meeting of the National Security Council, 19 June 1958, FRUS 1958– 1960 Vol. V, 27 – 32; Schoultz, Beneath the United States, 352– 3; McPherson, Yankee No!, 33 – 7. 58. Memorandum of discussion at the 369th meeting of the National Security Council, 19 June 1958, FRUS 1958 – 1960 Vol. V, 27 – 32; on the role of the USIA and propaganda in Latin America, see Osgood, Total Cold War, 148; for a different perspective, which examines the use that the CIA made of religious front groups in South America during the Cold War in an effort to improve perspectives of the United States, Hugh Wilford, The Mighty Wurlitzer: How the CIA Played America (Cambridge, MA: Harvard University Press, 2008), 183 – 97. 59. OCB report on Latin America, 19 June 1958, 369th meeting of the NSC, Box 10, NSC Series, Whitman File, EL; ‘Back to the Hemisphere’, NYT, 4 August 1958, 20. 60. Memorandum of a conversation, Department of State, 24 June 1958, FRUS 1958– 1960 Vol. V, 260– 3. 61. Dulles to Milton Eisenhower, quoted in Milton Eisenhower, The Wine Is Bitter, 212; see also memorandum from Allen Dulles to Secretary of State Dulles,

202

62.

63. 64.

65. 66. 67.

68. 69. 70. 71. 72. 73.

74. 75. 76.

NOTES

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105 –108

27 May 1958; memorandum for the record of a meeting in the White House, 2 June 1958, FRUS 1958– 1960 Vol. V, 252– 6. For the Dillon quote, Siekmeier, Aid, Nationalism and Inter-American Relation, 320, but more broadly on this period and the creation of the IADB 301– 24; W. Kenworthy, ‘US Backs Move in Latin America for a Loan Bank’, NYT, 13 August 1958, 1; ‘A New Hemispheric Policy’, NYT, 15 August 1958, 20. For the view that the administration’s support of the IADB was to head off future Latin American aid requests, Matthew Loayza, ‘An “Aladdin’s Lamp” for Free Enterprise’, 99 –100. Skidmore, Politics in Brazil, 163– 86; Smith, A History of Brazil, 176; Joseph Smith, Brazil and the United States: Convergence and Divergence (Athens: University of Georgia Press, 2010); Robert J. Alexander, The ABC Presidents: Conversations and Correspondence with the Presidents of Argentina, Brazil, and Chile (Westport, CT: Praeger, 1992), 108– 18. Telegram from the US embassy in Brazil to the Department of State, 23 May 1958, FRUS 1958– 1960 Vol. V, 676– 8. Letter from Brazilian president Juscelino Kubitschek to President Eisenhower, 28 May 1958, Brazil (8), Box 4, International Series, Whitman File, EL. Letter from President Eisenhower to President Kubitschek, 10 June 1958, PPPUS: DDE 1958, December 1, 2008; draft of letter from President Eisenhower to President Kubitschek of Brazil, 5 June 1958, DDE diary June 1958, Box 34, DDE Diary Series, Whitman File, EL. Memorandum of a conversation between President Kubitschek of Brazil and Roy Rubottom, 10 June 1958, FRUS 1958– 1960 Vol. V, 679– 83. Telegram from the Department of State to the US embassy in Brazil, 20 June 1958, FRUS 1958– 1960 Vol. V, 685– 8. Speech by the president of the Republic of the United States of Brazil Juscelino Kubitschek, Rio de Janeiro, 20 June 1958, Brazil (7), Box 4, International Series, Whitman File, EL. Telegram from the Department of State to the US embassy in Brazil, Washington, 24 June 1958, FRUS 1958 –1960 Vol. V, 688– 9. Darnton, ‘Asymmetry and Agenda-Setting in US– Latin American Relations’, 57 – 9. Memorandum of a conversation between Assistant Secretary of State Roy Rubottom and the Mexican ambassador to the OAS Luis Quintanilla, 24 June 1958, 1958 – Foreign Ministers Meetings, Box 6, Lot 60, D553, Record Group 59, Records for the Assistant Secretary of State for Inter-American Affairs, NARA. Memorandum of a conversation, Brazilian Foreign Office, 5 August 1958, FRUS 1958– 1960 Vol. V, 692– 5. Memorandum of a conversation between Secretary Dulles and President Kubitschek, 5 August 1958, FRUS 1958– 1960 Vol. V, 696– 9. Dulles quote from speech to Chamber of Commerce in Weis, Cold Warriors & Coups d’Etat, 119.

NOTES

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108 –112

203

77. ‘Famous Friends’, Time, 18 August 1958. 78. Letter from Secretary of State Dulles to President Kubitschek, 7 August 1958, FRUS 1958– 1960 Vol. V, 700– 1. 79. Telegram from the US embassy in Brazil to the Department of State, 7 August 1958, FRUS 1958– 1960 Vol. V, 702– 3; Weis, Cold Warriors & Coups d’Etat, 120; Robert Alexander, Juscelino Kubitschek and the Development of Brazil, 290– 1. 80. Speech Douglas Dillon to the Special Committee of the Council of the Organization of American States, 18 November 1958, DOSB, 39, 8 December 1958, 918–22. 81. Milton Eisenhower, ‘Report to the President: US– Latin American Relations’, 27 December 1958, Box No 7, Milton Eisenhower Papers, EL; Price Day, ‘Dr. Eisenhower Recommends Abrazo’, Baltimore Morning Sun, 5 January 1959, Box 7, Milton Eisenhower Papers, EL, original emphasis. 82. E.W. Kenworthy, ‘US Policy Shift on Latins Urged’, NYT, 4 January 1959, 1; ‘Dr. Eisenhower’s Report’, NYT, 5 January 1959, 28. 83. Address by Roy Rubottom to the American Association of Law Schools, Chicago, IL, 29 December 1958, DOSB, 40, 26 January 1959, 119– 26. 84. Memorandum from Roy Rubottom to John Foster Dulles, 27 November 1958, 1958 – Eisenhower, Dr Milton, Box 6, Lot 60, D553, Record Group 59, Records for the Assistant Secretary of State for Inter-American Affairs, NARA. 85. Special Report by the Operations Coordinating Board to the NSC, 26 November 1958, FRUS 1958– 1968 Vol. V, 36– 60.

Chapter 5 The Cuban Problem 1. On the background of Castro’s uprising and US policies toward it, Thomas Paterson, Contesting Castro: The United States and the Triumph of the Cuban Revolution (New York: Oxford University Press, 1994); Jon Lee Anderson, Che Guevara: A Revolutionary Life (New York: Bantam Books, 1997), 269– 337; Lars Schoultz, That Infernal Little Cuban Republic: The United States and the Cuban Revolution (Chapel Hill: University of North Carolina Press, 2009), 52 – 82. 2. Memorandum of a conference, 31 December 1958, FRUS 1958– 1960 Vol. I, 323– 9. 3. On Castro’s influence in Latin America, Schoultz, Infernal Little Republic, 82 – 109; McPherson, Yankee No!, 38 –77. 4. On the Caribbean, Jason Parker, Brother’s Keeper: The United States, Race, and Empire in the British Caribbean, 1937 –1962 (New York: Oxford University Press, 2008), 119– 40; Westad, Global Cold War, 170– 1. 5. Brands, Latin America’s Cold War, 24 – 35; Daniela Spenser, ‘The Caribbean Crisis: Catalyst for Soviet Projection in Latin America’, in Joseph and Spenser, In from the Cold, 77 – 112; for some wider reflections on this, Gilbert Joseph, ‘Latin America’s Long Cold War’.

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113 –117

6. NSC Briefing on anti-Americanism in Cuba, January 21, 1959, CIA Reading Room, at www.foia.cia.gov/docs/DOC_0000132327/DOC_0000132327.pdf, accessed 12 September 2012; telegram from US ambassador in Cuba Philip Bonsal to the Department of State, 5 February 1959, FRUS 1958– 1960 Vol. VI, 395. 7. On the April trip, Alan McPherson, ‘The Limits of Populist Diplomacy: Fidel Castro’s April 1959 Trip to North America’, Diplomacy and Statecraft, Vol. 18, No. 1 (March 2007), 237 – 68; Paterson, Contesting Castro, 69 – 241. 8. Dorothy McCardle, ‘Brasilia Is Modern “Boom Town”’, WP, 1 February 1959, F12; ‘Business Trends Key to Americas’, LAT, 8 March 1959, 30. 9. Editorial Note, FRUS 1958– 1960 Vol. V, 78 – 9. 10. Memorandum from Rollin Attwood of the Office of Latin American Operations to Assistant Secretary of State for Inter-American Affairs Roy Rubottom, 6 January 1959, DDRS CK3100082895. 11. Memorandum from Roy Melbourne of the NSC to Special Assistant to the President Karl Harr, 15 January 1959, DDRS CK3100428604; memorandum from Chairman of the Joint Chiefs of Staff Nathan Twining to Secretary of Defense Thomas Gates, undated but presumably late January 1959, NSC 5902 Latin America (2), Box 26, NSC Series – Policy Papers, Office of the Special Assistant for National Security Affairs, EL. 12. Memorandum from Philip Halia to Gordon Gray, containing Milton Eisenhower’s views on NSC 5902, 9 February 1959, Latin America (3), Box 5, White House Office – NSC Staff Papers, Special Staff Series, EL. 13. Briefing Note for NSC meeting, 11 February 1959, 396th meeting—February 12, 1959, NSC Series, Whitman File, EL. 14. Memorandum of discussion at the 396th meeting of the National Security Council, 12 February 1959, FRUS 1958– 1960 Vol. V, 79 – 91; for an assessment of the levels of financial assistance in the area, memorandum from Charles Haskins to Gordon Gray, 29 January 1959, DDRS CK3100165188. 15. NSC 5902/1, Statement of US Policy toward Latin America, 16 February 1959, FRUS 1958– 1960 Vol. V, 91 – 103. 16. NSC 5902/1, Statement of US Policy toward Latin America, 16 February 1959, FRUS 1958– 1960 Vol. V, 91 – 103. 17. NSC 5902/1, Statement of US Policy toward Latin America, 16 February 1959, FRUS 1958– 1960 Vol. V, 91 – 103. 18. Parker, Brother’s Keeper, 119– 39; Gilderhus, The Second Century, 156– 63. 19. NSC briefing on situation in Cuba, 17 March 1959, CIA Reading Room, at www.foia.cia.gov/docs/DOC_0000132330/DOC_0000132330.pdf, accessed 13 September 2012; memorandum from Secretary of State Christian Herter to President Eisenhower, 23 April 1959, DDRS, CK3100357236. 20. Speech by Raul Castro, Havana, 11 September 1959, taken from http://lanic. utexas.edu/project/castro/db/1959/19590914.html, accessed 29 September 2012.

NOTES TO PAGES 117 –119

205

21. Speech by Fidel Castro to the Cuban people at Loyalty Rally, Havana, 26 October 1959, taken from: http://lanic.utexas.edu/project/castro/db/1959/ 19591026.html, accessed 29 September 2012. 22. Information and details from Schoultz, That Infernal Little Cuban Republic, 100– 8; Rabe, Eisenhower, 133; McPherson, Yankee No!, 60 –8; Grow, US Presidents and Latin American Interventions, 28 – 57; on Castroism as an existential threat to the US position in Latin America, Louis Perez, Cuba in the American Imagination: Metaphor and the Imperial Ethos (Chapel Hill: University of North Carolina Press, 2008), 248– 9. 23. Telegram from Secretary of State Herter to President Eisenhower, 12 August 1959, DDRS CK3100449931. 24. For indicative reports of the way that US analysts tied events in Cuba to events in the Caribbean, OCB agenda item for a meeting on US policy in Latin America, 23 June 1959, DDRS CK3100517496; NSC briefing on situation in the Caribbean, 8 July 1959, DDRS; memorandum from Rubottom to Acting Secretary of State Herter, 18 April 1959, FRUS 1958– 1960 Vol. V, 287– 9; Rabe, ‘The Caribbean Triangle’, 55 –78. 25. Herter quote in memorandum of discussion at the 411th meeting of the National Security Council, 25 June 1959, FRUS 1958–1960 Vol. V, 391–1. 26. Rubottom quoted in McPherson, Yankee No!, 67 – 8; Perez, Cuba in the American Imagination, 250. 27. On policy in the Caribbean and the West Indies, NSC 6002/1, ‘Statement of US Policy toward the West Indies’, 21 March 1960, FRUS 1958– 1960 Vol. V, 433– 43; Parker, Brother’s Keeper, 130– 9; Spencer Mawby, ‘“Uncle Sam, We Want back We Land”: Eric Williams and the Anglo-American Controversy over the Chaguaramas Naval Base’, Diplomatic History, Vol. 36, No. 1 (January 2012), 119– 45; Spencer Mawby, Ordering Independence: The End of Empire in the Anglophone Caribbean, 1947– 1969 (Basingstoke: Palgrave, 2012). 28. Piero Gleijses, ‘Ships in the Night: The CIA, the White House and the Bay of Pigs’, Journal of Latin American Studies, Vol. 27, No. 1 (February 1995), 1–42. 29. Memorandum from Secretary of State Herter to President Eisenhower, February 2, 1960, Box 12, Dulles – Herter Series, Whitman File, EL. 30. It was a point noted by Eisenhower in discussion with one Senator in March 1960. Summary of meeting between President Eisenhower and Senator Smathers, 4 March 1960, DDRS CK3100314533. 31. Rabe, Eisenhower, 153– 73; on Betancourt, Castro and Trujillo, CIA Intelligence Report on Meeting between President Betancourt and Ambassador Sparks, 29 April 1960, CIA Reading Room, at www.foia.cia.gov/docs/DOC_0000132472/ DOC_0000132472.pdf, accessed 1 October 2012; for a fuller account of this period, Schoultz, That Infernal Little Cuban Republic, 109–42. 32. Telegram from President Eisenhower to Canadian prime minister John Diefenbaker, 9 July 1960, DDRS CK3100096837. 33. Memorandum of discussion at the 467th meeting of the National Security Council, 17 November 1960, FRUS 1958– 1960 Vol. V, 453– 5.

206

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120 –122

34. Transcript of Presidential Debate, Washington DC, 7 October 1960, online by Gerhard Peters and John T. Woolley, the American Presidency Project, at www. presidency.ucsb.edu/ws/?pid¼ 29401, accessed 1 October 2012. 35. Walter Lippmann, ‘Today and Tomorrow: The Duty of Rich Nations’, WP, 29 January 1959, A17. 36. On the embracement of Kubitschek’s ideas, Darnton, ‘Asymmetry and AgendaSetting in US– Latin American Relations’; on Frondizi and Argentina, Dustin Walcher, ‘Structuring the Economy on the Periphery: The United States, the 1958 Argentine Stabilization Agreement, and the Evolution of Global Capitalism’, in Bevan Sewell and Maria Ryan (eds), Working to the Margins: US Foreign Policy and the ‘Periphery’, 1945– 2008 (forthcoming). 37. On Bolivia, ‘US May Reduce Staff in Bolivia’, NYT, 12 March 1959, 15; Lehman, ‘Revolutions and Attributions’, 210–12; interestingly, James Siekmeier argues that the Bolivian case was, in fact, more successful – suggesting that, irrespective of widespread problems, the US ultimately decided that its approach had worked and that this could, in turn, be rolled out across the region, Siekmeier, The Bolivian Revolution and the United States, 83–5; on Guatemala, Stephen Streeter, ‘The Failure of “Liberal Developmentalism”: The United States’s Anti-Communist Showcase in Guatemala, 1954–1960’, International History Review, Vol. 21, No. 2 (June 1999), 386–413; Lehman, ‘Revolutions and Attributions’, 212. 38. Press conference by President Eisenhower, 5 May 1959, PPPUS: DDE 1959, 21 September 2012. 39. ‘US Itemizes Economic Aid at Meeting’, WP, 1 May 1959, 16; on the backdrop to the meeting, Tad Szulc, ‘Joint Action Set on Aid to Latins’, NYT, 22 March 1959, 20; ‘Latin-American Economics’, NYT, 29 April 1959, 32. The Committee of 21 was the group set up in the aftermath of the Panama Presidents’ Meeting in 1956, which was intended to provide a forum for Latin American nations to meet with the United States in order to discuss shared economic interests. 40. E.W. Kenworthy, ‘Charter Is Initialled for Americas Bank’, NYT, 9 April 1959, 1; ‘A Bank for the Hemisphere’, NYT, 10 April 1959, 28; ‘A Bank for Neighbors’, WP, 9 April 1959, A20. 41. Memorandum of meeting between President Eisenhower and group led by Treasury Secretary Anderson, 5 March 1959, 1 – 15 March 1959, Staff Notes (2), Box 39, DDE Diary Series, Whitman File, EL. 42. Final proposal by the United States with respect to the Inter-American Banking Institution, 5 March 1959, 1 – 15 March 1959, Staff Notes (2), Box 39, DDE Diary Series, Whitman File, EL. 43. Final proposal by the United States with respect to the Inter-American Banking Institution, 5 March 1959, 1 – 15 March 1959, Staff Notes (2), Box 39, DDE Diary Series, Whitman File, EL. 44. ‘The Projected Interamerican Bank: Some Preliminary Considerations’, 8 May 1959, Council on Foreign Relations and the American Assembly (1), Box 2, Dennis Fitzgerald Papers, EL.

NOTES TO PAGES 123 –126

207

45. Special message to Congress by President Eisenhower on the establishment of the Inter-American Development Bank, 11 May 1959, PPPUS: DDE 1959, 28 September 2012. 46. ‘Ike Asks for $450 Million for Hemisphere Bank’, WP, 12 May 1959, A9; ‘Growing Pains’, WP, 18 May 1959, A14; see also Milton Eisenhower, The Wine Is Bitter, 154– 7. 47. Letter from Assistant Secretary of State for Inter-American Affairs Roy Rubottom to the US ambassador in Argentina Willard Beaulac, 30 May 1959, FRUS 1958 – 1960 Vol. V, 568 – 70; memorandum of conversation between President Frondizi and US ambassador to Argentina Willard Beaulac, 10 June 1959, FRUS 1958 – 1960 Vol. V, 572 – 4; Walcher, ‘Structuring the Economy on the Periphery’; Sheinin, Argentina and the United States, 114 – 21. 48. Bevan Sewell, ‘Early Modernization Theory? The Eisenhower Administration and the Foreign Policy of Development in Brazil’, English Historical Review, Vol. 125, No. 517 (December 2010), 1449– 80. 49. Sheldon Maram, ‘Juscelino Kubitschek and the 1960 Presidential Election’, Journal of Latin American Studies, Vol. 24, No. 1 (February 1992), 124– 45; Skidmore, Politics in Brazil, 182– 97; Smith, A History of Brazil, 164– 70. 50. Memorandum from Roy Rubottom to Secretary of State Christian Herter, 15 July 1959; memorandum from Alton Hemba to Roy Rubottom, 16 October 1959; memorandum from Dwight Scarborough to Roy Rubottom, 3 November 1959, Folder 1959 – Brazil, Box 11, Record Group 59, Entry 1135, Rubottom Papers, Subject Files 1957– 1959, Lot 61 D 279, NARA. 51. Memorandum of discussion at the 407th meeting of the National Security Council, 21 May 1959, Box 11, NSC Series, Whitman File, EL; on the problem of growing populations, Matthew Connelly, ‘Seeing beyond the State: The Population Control Movement and the Problem of Sovereignty’, Past and Present, No. 193 (November 2006), 197– 233. 52. Regional Operations Plan for Latin America prepared by the Operations Coordinating Board, 1 July 1959, FRUS 1958– 1960 Vol. V, 117–33. 53. State of the Union Address by President Eisenhower to Congress, 9 January 1959, PPPUS: DDE 1959, 2 October 2012. 54. McPherson, Yankee No!; Friedman, Rethinking Anti-Americanism, 145– 51. 55. Osgood, Total Cold War, 356– 61; Fursenko and Naftali, Khrushchev’s Cold War, 292– 5. 56. ‘Next: South America’, WP, 9 January 1960, A8. 57. Notes of the Secretary of State’s staff meeting, 21 August 1959, FRUS 1958– 1960 Vol. V, 346– 7; memorandum from Secretary of State Herter to President Eisenhower, containing the declaration of the Santiago Conference, 24 August 1959, Box 9, Dulles – Herter Series, Whitman File, EL; ‘Dilemmas at Santiago’, WP, 15 August 1959, A8. 58. Memorandum of a conversation between President Eisenhower and the National Advisory Committee on Inter-American Affairs, 3 December 1959;

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59. 60.

61. 62. 63.

64. 65. 66. 67. 68. 69. 70.

71.

72. 73. 74. 75.

NOTES

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telegram from Herter to President Eisenhower, 9 December 1959, FRUS 1958– 1960 Vol. V, 267– 70. Telegram from Department of State to US embassies in Argentina, Brazil, Chile and Uruguay, 6 January 1960, DDRS CK 3100449938. Telegram from Department of State to all diplomatic posts in Latin America, 4 February 1960, FRUS 1958– 1960 Vol. V, 274– 8; Eisenhower also rejected a suggestion by President Kubitschek that the US give ‘preliminary’ agreement to creating a Marshall Plan for Latin America. Memorandum from Herter to President Eisenhower, 29 January 1960, DDRS CK 3100300976. Radio and television address by President Eisenhower, 21 February 1960, PPPUS: DDE 1960, 3 October 2012. Address before a joint session of the Brazilian Congress, 24 February 1960, PPPUS: DDE 1960, 3 October 2012; Sewell, ‘Early Modernization Theory?’. On the emergence of poverty and how it fit into ideas relating to modernisation and development, Cullather, The Hungry World; Sheyda Jahanbani, The Poverty of the World: Rediscovering the Poor at Home and Abroad (New York: Oxford University Press, forthcoming). Remarks by President Eisenhower to the meeting of the American Assembly, Dorado, Puerto Rico, 4 March 1960, PPPUS: DDE 1960, 3 October 2012. Memorandum from Secretary Herter to President Eisenhower, 12 March 1960, FRUS 1958– 1960 Vol. V, 279– 80. ‘The Americas: The Students & the President’, Time, 18 April 1960; Rabe, Eisenhower, 136–7; Milton Eisenhower, The Wine Is Bitter, 242–8. ‘Southern Exposure’, WP, 22 February 1960, A10. Radio and television address by President Eisenhower, 8 March 1960, PPPUS: DDE 1960, 3 October 2013. Report by the Operations Coordinating Board to the National Security Council on Latin America, 6 April 1960, FRUS 1958– 1960 Vol. V, 134– 40; ‘Cuban – US Relations’, NYT, 13 April 1960, 38. Memorandum from Secretary Herter to President Eisenhower, 2 February 1960, Box 12, Dulles – Herter Series, Whitman File, EL; memorandum from Secretary Herter to President Eisenhower, 23 April 1960, Box 12, Dulles – Herter Series, Whitman File, EL; Tad Szulc, ‘Cuba: How Other Latins See It’, NYT, 17 April 1960, E6. Brands, Latin America’s Cold War, 30 – 1; Tanya Harmer, ‘Two, Three, Many Revolutions? Cuba and the Prospects for Revolutionary Change in Latin America’, Journal of Latin American Studies, Vol. 45, No. 1 (February 2013), 61 – 89. Morse quoted in ‘Journey’s End’, WP, 9 March 1960, A12. ‘Pan-American Week’, NYT, 18 April 1960, 28. Memorandum from John Bell to Gerard Smith, 5 July 1960, FRUS 1958– 1960 Vol. V, 198– 208. Memorandum from John Bell to Gerard Smith, 5 July 1960, FRUS 1958– 1960 Vol. V, 198– 208.

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76. Memorandum of discussion at the 443rd meeting of the National Security Council, 5 May 1960, FRUS 1958–1960 Vol. V, 140– 2; memorandum of a conversation between President Eisenhower and Peruvian prime minister Pedro Beltran, 9 June 1960, DDRS CK3100216207. 77. Draft statement by President Eisenhower on the Social Progress Fund, 8 July 1960, DDRS CK 3100184674; staff comments on draft presidential address, July 1960, DDRS CK 3100184682; memorandum of discussion 11 July 1960, DDRS CK 3100483639. 78. News conference by President Eisenhower, Newport, Rhode Island, 11 July 1960, PPPUS: DDE 1960, 5 October 2012; the New York Times, it is worth noting, nevertheless referred to it as a ‘Marshall Plan for Latin America.’ ‘A Hemispheric Marshall Plan’, NYT, 10 July 1960, E11; ‘Ike, Herter to Discuss Cuba Crisis, Aid Today’, WP, 9 July 1960, A1; ‘President to Send Appeal to Congress’, LAT, 10 July 1960, D4. 79. Memorandum from Douglas Dillon to President Eisenhower, 1 August 1960, Christian Herter, August 1960 (2), Box 13, Dulles – Herter Series, Whitman File, EL. 80. Memorandum of conversation between President Eisenhower, Secretary Herter et al., 1 August 1960, DDRS CK 3100211765; Zoumaras, ‘Eisenhower’s Foreign Economic Policy’, 180– 1. 81. Memorandum of a conversation between President Eisenhower and Secretary Herter, 30 August 1960, DDRS CK 3100392752. 82. Telegram from Dillon to Secretary Herter, 7 September 1960, DDRS CK 3100460792; telegram from Dillon to Secretary Herter, 11 September 1960, DDRS CK 3100460793. 83. Memorandum of a conversation between President Eisenhower and Uruguayan president-elect Haedo, 20 September 1960, DDRS CK 3100183672. 84. News conference by President Eisenhower, 10 August 1960, PPPUS: DDE 1960, 5 October 2012. 85. Remarks by President Eisenhower at a luncheon for Latin American delegates to the UN, 22 September 1960, PPPUS: DDE 1960, 5 October 2012. 86. Editorial note, FRUS 1958– 1960 Vol. V, 143; revised version of NSC 5902/1, third draft, 15 November 1960, DDRS CK 3100184124; on the shifting state of Latin American politics, Brands, Latin America’s Cold War, 23 – 4; Jeffrey Gould, ‘Solidarity under Siege: The Latin American Left, 1968’, American Historical Review, Vol. 114, No. 2 (April 2009), 348– 75; Joseph, ‘Latin America’s Long Cold War’, 400– 11. 87. Milton Eisenhower, The Wine Is Bitter, 330.

Chapter 6 The Failure of Modernisation 1. For some discussion of this, Gaddis, Strategies of Containment, 230; Lawrence Freedman, Kennedy’s Wars: Berlin, Cuba, Laos, and Vietnam (New York: Oxford University Press, 2000); on Kennedy’s policies toward Castro prior to 1962 and

210

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3. 4. 5.

6.

7.

8.

9.

10. 11.

NOTES TO PAGES 137 –140 the misguided logic underpinning them, Friedman, Rethinking Anti-Americanism, 147– 51; Renata Keller, ‘The Latin American Missile Crisis’, Diplomatic History (forthcoming). Summary record of NSC meeting, 13 March 1963, DDRS CK; ‘Kennedy Faces 3 Latin Problems: Vista Latina’, WP, 17 March 1963, E4; for an argument that strongly supports this notion of Cuba’s importance, and its separation from other parts of the area, Asa McKercher, ‘Steamed Up: Domestic Politics, Congress, and Cuba, 1959– 1963’, Diplomatic History, Vol. 38, No. 3 (June 2014), 599– 628. Stephen Rabe, ‘After the Missiles of October: John F. Kennedy and Cuba, November 1962 to November 1963’, Presidential Studies Quarterly, Vol. 30, No. 4 (December 2000), 714–26. On modernisation theory, Gilman, Mandarins of the Future; Milne, America’s Rasputin; Latham, Modernization as Ideology. Rabe, The Most Dangerous Area in the World, 1 – 33; Taffet, Foreign Aid as Foreign Policy, 1– 47; Latham, Modernization as Ideology, 69 – 109; Brands, Latin America’s Cold War, 44 – 9; Field, ‘Ideology as Strategy’, 147– 83; Michael Weis, ‘The Twilight of Pan-Americanism: The Alliance for Progress, Neo-colonialism, and Non-alignment in Brazil, 1961– 1964’, International History Review, Vol. 23, No. 2 (April 2001), 322– 44. For Kennedy’s life and his advisers, Robert Dallek, John F. Kennedy: An Unfinished Life (New York: Penguin, 2004); Stephen Rabe, John F. Kennedy: World Leader (Washington, DC: Potomac Books, 2010); James Giglio, The Presidency of John F. Kennedy, 2nd edn (Lawrence: University Press of Kansas, 2006); Peter Ling, John F. Kennedy (London: Routledge, 2013). On Kennedy’s national security apparatus, Andrew Preston, The War Council: McGeorge Bundy, the NSC, and Vietnam (Cambridge, MA: Harvard University Press, 2006), 36 – 54; on Kennedy’s foreign policy more broadly, Herring, From Colony to Superpower, 702– 19; Freedman, Kennedy’s Wars. Campbell Craig and Fredrik Logevall, America’s Cold War: The Politics of Insecurity (Cambridge, MA: Belknap Press of Harvard University Press, 2009), 189– 96; Democratic Party Platform of 1960, July 11, 1960, online by Gerhard Peters and John T. Woolley, the American Presidency Project, at www.presi dency.ucsb.edu/ws/?pid¼29602, accessed 9 October 2012. For wider discussion on domestic politics and foreign policy, Fredrik Logevall, ‘Politics and Foreign Relations’, Journal of American History, Vol. 95, No. 4 (March 2009), 1074– 8; on this ‘moment’, when advisers like Walt Rostow discerned an opportunity for a new approach, Amanda Kay McVety, Enlightened Aid: US Development as Foreign Policy in Ethiopia (New York: Oxford University Press, 2012), chs 5 and 6; Latham, Right Kind of Revolution, 36 –53. Gilman, Mandarins of the Future, 174– 90. Letter from Walt Rostow to Adlai Stevenson, 2 December 1957; letter from Rostow to Stevenson, 14 January 1958, Box 69, Adlai Stevenson Papers, SMLP.

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12. Testimony by Walt Rostow before the Senate Committee on Foreign Relations, 27 February 1958, Box 561, JFK – Pre-presidential Papers, John F. Kennedy Library, Boston, MA (hereafter JFKL). 13. Letter from Rostow to Stevenson, 12 September 1958, Box 69, Stevenson Papers, SMLP. 14. Walt W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge: Cambridge University Press, 1960), 1. 15. Rostow, The Stages of Economic Growth, 142– 4. 16. Latham, Right Kind of Revolution, 59. 17. On Rostow’s model, its simplicity, and wider intellectual discussions at this time, Nicole Sackley, ‘Cosmopolitanism and the Uses of Tradition: Robert Redfield and Alternative Visions of Modernization during the Cold War’, Modern Intellectual History, Vol. 9, No. 3 (November 2012), 565– 95, 567– 8; Howard Brick, The Age of Contradiction: American Thought and Culture in the 1960s (Ithaca, NY: Cornell University Press, 2001), 44 – 65; on Rostow and JFK’s relationship, Milne, America’s Rasputin. 18. On Kennedy’s appeal to Africa during the 1960s campaign and its political impact, James Meriwether, ‘“Worth a Lot of Negro Votes”: Black Voters, Africa, and the 1960 Presidential Campaign’, Journal of American History, Vol. 95, No. 3 (December 2008), 737– 63; Philip Muhlenbeek, Betting on the Africans: John F. Kennedy’s Courting of African Nationalist Leaders (New York: Oxford University Press, 2012), 34 – 41. 19. Schlesinger journal entry, in Arthur Schlesinger Jr, Journals 1952– 2000 (London: Atlantic Books, 2007), 90 – 1. 20. Russell Contreras, ‘Viva Kennedy: JFK’s Pioneering Efforts to Win Latino Voters’, Huffington Post, 25 November 2012, at www.huffingtonpost.com/2012/ 11/25/viva-kennedy-jfk-latino-vote_n_2188069.html, accessed 22 March 2014. 21. News conference by President Kennedy, 25 January 1961, PPPUS: JFK 1961, 14 October 2012. 22. Annual Message to Congress on the State of the Union by President Kennedy, 30 January 1961, PPPUS: JFK 1961, 14 October 2012. 23. Some scholars, in fact, have argued that the Alliance for Progress was, in reality, simply an extension of the way in which Eisenhower had been moving. See, in particular, Rabe, ‘Controlling Revolutions’; Zoumaras, ‘Eisenhower’s Foreign Economic Policy’, 155– 92; it is also a point made by Milton Eisenhower in The Wine Is Bitter. 24. ‘The Strategy of Foreign Aid’, memorandum by Walt Rostow forwarded to John F. Kennedy, 22 December 1960, ‘Task Force Reports’, Box 1074, Prepresidential Papers, Papers of President Kennedy, JFKL. 25. Kennedy quoted in Rabe, John F. Kennedy: World Leader, 75. 26. Memorandum from Arthur Schlesinger to Richard Goodwin, 24 July 1961, Latin American Policy (1), Box 8, Richard Goodwin Papers, JFKL.

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144 –148

27. Speech by President Kennedy to members of Congress and diplomatic corps of Latin America, 13 March 1961, PPPUS: JFK 1961, 14 October 2012. 28. Record of a telephone conversation between George Ball and Richard Goodwin, 23 February 1961, Latin America 1/23/1961– 8/16/1963, Box 5, George Ball Papers, JFKL. 29. Record of a telephone conversation between George Ball and Walt Rostow, 1 March 1961, Latin America 1/23/1961–8/16/1963, Box 5, George Ball Papers, JFKL. 30. Memorandum from George McGhee to Adolf Berle, 3 March 1961, Box 1, Richard Goodwin Papers, JFKL. 31. Planning paper for economic and social development, June 1961, Alliance for Progress Punta del Este meeting, 8/61 Preparatory Papers, Box 1, Richard Goodwin Papers, JFKL. 32. For the Berle quote, Lucien Vandenbroucke, ‘Anatomy of a Failure: The Decision to Land at the Bay of Pigs’, Presidential Studies Quarterly, Vol. 99, No. 3 (Fall 1984), 471– 91. 33. Task Force on Latin America Report, 4 January 1961, Task Force Reports, Box 1074, Papers of President Kennedy, Pre-presidential Papers, JFKL. 34. For an account of Schlesinger’s trip, which illustrates just how narrow his experiences were, see Schlesinger, Journals, 102– 6. 35. Memorandum from Arthur Schlesinger to President Kennedy, 10 March 1961, FRUS 1961– 1963 Vol. XII, Doc No. 7. 36. Latham, Modernization as Ideology, 82 – 3; Taffet, Foreign Aid as Foreign Policy, 32 – 5; for further details, especially on Teodoro Moscoso, Kennedy’s choice to run the alliance, see Rabe, The Most Dangerous Area in the World, 148– 9. 37. Field, ‘Ideology as Strategy’; Weis, ‘Twilight of Pan-Americanism’; Taffet, Foreign Aid as Foreign Policy, 95–147; Stephen Rabe, US Intervention in British Guiana: A Cold War Story (Chapel Hill: University of North Carolina Press, 2005). 38. Summary by McGeorge Bundy of a conversation between President Kennedy and his advisers on Cuba, 28 January 1961, DDRS CK3100470054. 39. Friedman, ‘Anti-Americanism and US Foreign Relations’, 497 – 514, particularly 509; Howard Jones, The Bay of Pigs (New York: Oxford University Press, 2008), 122– 9; for an insider account of the days around the operation, and the view that Secretary of State Dean Rusk, in particular, should have done more to raise objections, Schlesinger, Journals, 109– 20. 40. See memorandum of discussion between President Kennedy and Charles de Gaulle, 1 June 1961, DDRS CK3100133326; memorandum of White House meeting between President Kennedy, Secretary Rusk, Secretary McNamara, Vice President Johnson and Attorney General Robert Kennedy, 8 June 1961, DDRS CK3100325111; Rabe, ‘The Caribbean Triangle’, 55 –78; McPherson, Yankee No!, 122– 31. 41. Remarks by President Kennedy to the Organization of American States, 14 April 1961, PPPUS: JFK 1961, 26 October 2012; ‘President Calls for Latin

NOTES

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43.

44. 45.

46. 47. 48. 49. 50. 51. 52.

53.

54.

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Parley to Spur Alliance’, NYT, 15 April 1961, 1; ‘New World Ideals’, WP, 15 April 1961, A8. Circular telegram from Department of State to all American diplomatic posts in American republics, 5 May 1961, Ambassador Adlai Stevenson trip to Latin America 6/61, Box 250a, National Security Files, Papers of President Kennedy, JFKL. Memorandum of a conversation at the White House, 24 May 1961, Ambassador Adlai Stevenson trip to Latin America 6/61, Box 250a, National Security Files, Papers of President Kennedy, JFKL; ‘Stevenson to Visit 10 Latin Capitals to Help Speed Development Program’, WP, 29 May 1961, A1; ‘The Stevenson Touch’, WP, 30 May 1961, A12. Taffet, Foreign Aid as Foreign Policy, 29 – 46. Report to President Kennedy on Latin America Trip by Adlai Stevenson, 27 June 1961, Ambassador Adlai Stevenson trip to Latin America 6/61, Box 250a, National Security Files, Papers of President Kennedy, JFKL; see also the edited version in FRUS 1961–1963 Vol. XII, Doc. No. 14. I am hugely thankful to Ellie Shermer for her opinion of Hodges and his role within the Kennedy administration and US political history more broadly. Memorandum and report from Luther Hodges to President Kennedy, 13 March 1961, Foreign Economic Policy, Box 1, Richard Goodwin Papers, JFKL. Notes by McGeorge Bundy for lunch with Robert Komer, 21 August 1961, DDRS CK3100306400. Memorandum from Chester Bowles to Dean Rusk, 25 July 1961, FRUS 1961– 1963 Vol. XII, Doc. No. 17. Memorandum from Richard Goodwin to President Kennedy, 28 September 1961, FRUS 1961– 1963 Vol. XII, Doc. No. 33. Memorandum from Lincoln Gordon to Richard Goodwin, 9 October 1961, Latin America Regional Conferences, Box 8, Richard Goodwin Papers, JFKL. Telegram from the US embassy in Mexico City to Secretary Rusk (containing report by Bowles), 20 October 1961, Alliance for Progress 6/61 – 3/62, Box WH-2, Papers of Arthur Schlesinger, JFKL; see also FRUS 1961– 1963 Vol. XII, Doc. No. 34; Summary Minutes of a Meeting, 29 November 1961, FRUS 1961– 1963 Vol. XII, Doc. No. 35. Taffet, Foreign Aid as Foreign Policy, 39 – 43; Robert David Johnson, ‘Constitutionalism Abroad and at Home: The United States Senate and the Alliance for Progress, 1961– 1967’, International History Review, Vol. 21, No. 2 (June 1999), 414– 42. ‘For Alianza a Warning’, Life, March 1962; for other press assessments that took a negative approach, Latham, Modernization as Ideology, 100– 8; for a further assessment of these problems, anonymous report on the alliance, undated but probably March 1962, Alliance for Progress, Box 95, President’s Office Files – Subjects, Papers of President Kennedy, JFKL.

214

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153 –156

55. Highlights of the first meeting of the Working Group on Problems of the Alliance for Progress, 16 January 1962, FRUS 1961– 1963 Vol. XII, Doc. No. 37. 56. Highlights of discussion at the Secretary of State’s Policy Planning Committee meeting, 13 February 1962, FRUS 1961– 1961 Vol. XII, Doc. No. 40. 57. Memorandum of conversation on the Alliance for Progress, 16 February 1962, FRUS 1961– 1963 Vol. XII, Doc. No. 41. 58. Memorandum from Bill Haddad to President Kennedy, 9 March 1962, Alliance for Progress, Box 95, President’s Office Files – Subjects, Papers of President Kennedy, JFKL. 59. Survey of the Alliance for Progress by the Bureau of the Budget, 7 August 1962, Alliance for Progress 7/62, Box 290a, National Security File, Papers of President Kennedy, JFKL. 60. On COMAP and its creation, memorandum from Teodoro Moscoso to Carl Kaysen, 9 April 1962; memo from Stanley Surrey to Carl Kaysen, 16 April 1962, Alliance for Progress 4/62 – 6/62, Box 290a, NSF, Papers of President Kennedy, JFKL; circular telegram from Department of State to all diplomatic posts in American republics, 4 April 1962, Alliance for Progress 4/62– 6/62, Box 290a, NSF, Papers of President Kennedy, JFKL. 61. Speech by Peter Nehemkis, sent to Jack Behrman and Secretary Hodges, 21 March 1962, Committee for the Alliance for Progress (COMAP), Correspondence 1962, Box 2, Jack Behrman Papers, JFKL. 62. Memorandum of Conversation at COMAP meeting, 16 August 1962, Committee for the Alliance for Progress (COMAP), Correspondence 1962, Box 2, Jack Behrman Papers, JFKL. 63. Memo from Schlesinger to Ralph Dungan, 15 October 1962, DDRS CK 3100392763. 64. Memo from Schlesinger to Ralph Dungan, 18 October 1962, Alliance for Progress 9/28/62– 10/18/62, Box WH-2, Schlesinger Papers, JFKL. 65. Memo from Walt Rostow to McGeorge Bundy, containing report from Arturo Morales-Carrion, 3 May 1962, Alliance for Progress 4/62 – 6/62, Box 290a, NSF, Papers of President Kennedy, JFKL; Tafett, Foreign Aid as Foreign Policy, 43 – 6. 66. Memo from Teodoro Moscoso to President Kennedy, 23 March 1962, Alliance for Progress Reports 3/62 – 4/62; memo from Moscoso to President Kennedy, 18 May 1962, Box 291, NSF, Papers of President Kennedy, JFKL. 67. Memo from Moscoso to President Kennedy, 22 June 1962, Alliance for Progress Reports 5/62– 7/62, Box 291, NSF, Papers of President Kennedy, JFKL; Latham, Modernization as Ideology, 100. 68. USIA Research and Reference Service, results of a public opinion survey in seven countries, June 1963, DDRS CK3100014471. 69. Memorandum from unknown author to President Kennedy, undated, Alliance for Progress, Box 95, President’s Office Files – Papers of President Kennedy, JFKL; also quoted in Latham, Modernization as Ideology, 100.

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70. Memo from Jack Behrman to Secretary Hodges, 6 February 1963, COMAP Correspondence 11/62 –2/63, Box 2, Jack Behrman Papers, JFKL; Rabe, Most Dangerous Area in the World, 166–7. 71. ‘Panel Urges More Aid for Latin America, Greater Emphasis on Private Enterprise’, Wall Street Journal, 4 February 1963; report by Raymond Mikesell to Jack Behrman, 26 February 1963, COMAP Correspondence 11/62– 2/63; memo from Peter Jones to Jack Behrman, 15 April 1963, COMAP Correspondence 3/63– 5/63, Box 2, Jack Behrman Papers, JFKL. 72. Draft memo, ‘A Reappraisal of the Alliance for Progress’, 1963, notes re the Clay Committee 1963, Box 23, Papers of David Elliott Bell, JFKL. 73. Memorandum by David Elliott Bell, 21 January 1963, notes re the Clay Committee 1963, Box 23, Papers of David Elliott Bell, JFKL. 74. Report to the president from the Committee to Strengthen the Security of the Free World (Clay Committee), 20 March 1963, Clay Committee Report, 1963, Box 23, Papers of David Elliott Bell, JFKL. 75. Article by Ed Martin, Department of State Bulletin, 4 November 1963, 698– 700; editorial note, FRUS 1961– 1963 Vol. XII, Doc. No. 64. 76. On authoritarianism, both in Latin America and more broadly, Field, ‘Ideology as Strategy’; Latham, Right Kind of Revolution, 123–57; on Asia, Simpson, Economists with Guns; Jeremy Kuzmarov, ‘Modernizing Repression: Police Training, Political Violence, and Nation Building in the “American Century”’, Diplomatic History, Vol. 33, No. 2 (April 2009), 191– 221. 77. Memorandum from Schlesinger to President Kennedy, 8 October 1963, FRUS 1961– 1963 Vol. XII, Doc. No. 65. 78. Address by President Kennedy in Miami, 18 November 1963, PPPUS: JFK 1963, 7 February 2014. 79. For excellent accounts of this issue, Francis Gavin, Gold, Dollars, & Power: The Politics of International Monetary Relations, 1958– 1971 (Chapel Hill: University of North Carolina Press, 2004), 59 –117; William Borden, ‘Defending Hegemony: American Foreign Economic Policy’, in Paterson, Kennedy’s Quest for Victory, 57 –86. 80. Memorandum from Robert Oshins to Peter Jones, 25 October 1963, Agency for International Development (AID), Correspondence 5/65– 6/63, Box 1, Jack Behrman Papers, JFKL. 81. Freedman, Kennedy’s Wars; Taubman, Khrushchev, 529– 78; Fursenko and Naftali, Khrushchev’s Cold War, 465– 92. 82. Keller, ‘The Latin American Missile Crisis’. 83. Dillon quoted in Record of National Security Council Meeting, 20 October 1962, in Ernest May and Philip Zelikow (eds), The Kennedy Tapes: Inside the White House during the Cuban Missile Crisis (New York: W.W. Norton, 2001), 131. 84. On Kennedy’s interventionism in the area, Friedman, Rethinking AntiAmericanism, 151– 6; Rabe, The Killing Zone.

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Conclusion 1. Remarks by President Kennedy in Houston, 21 November 1963, PPPUS: JFK 1963, 8 April 2014; ‘John F. Kennedy Addresses Latinos Night before Assassination’, Huffington Post, 29 May 2013, www.huffingtonpost.com/2013/ 05/29/john-f-kennedy-latinos_n_3354849.html, accessed 8 April 2014. 2. Remarks Intended for Delivery by President Kennedy to the Texas Democratic State Committee in Austin, 22 November 1963, PPPUS: JFK 1963, 8 April 2014; McPherson, Yankee No!, 75 –6. 3. Rabe, The Most Dangerous Area in the World, 1; Recollections by Dorothy Dillon on Guatemala and Lawrence Taylor on Columbia, ‘The Shot felt around the World – Reactions to the JFK Assassination’, Association for Diplomatic Studies and Training, http://adst.org/2013/11/the-shot-felt-round-the-worldreactions-to-the-jfk-assassination, accessed 8 April 2014. 4. Mitchell Lerner, ‘“A Big Tree of Peace and Justice”: The Vice Presidential Travels of Lyndon Johnson’, Diplomatic History, Vol. 34, No. 2 (April 2010), 392– 3. 5. For further details on Johnson’s stated determination to honour Kennedy’s legacy, Fredrik Logevall, Choosing War: The Lost Chance for Peace and the Escalation of War in Vietnam (Berkeley: University of California Press, 1999); David Kaiser, American Tragedy: Kennedy, Johnson, and the Origins of the Vietnam War (Cambridge, MA: Harvard University Press, 2000). 6. Address by President Lyndon Johnson to representatives of countries of Latin America, 26 November 1963, PPPUS: LBJ 1963, 16 March 2014. 7. Statement by President Johnson to Congress, 14 December 1963, PPPUS: LBJ 1963, 18 March 2014; Nick Cullather, ‘LBJ’s Third War: The War on Hunger’, in Francis Gavin and Mark Atwood Lawrence (eds), Beyond the Cold War: Lyndon Johnson and the New Global Challenges of the 1960s (New York: Oxford University Press, 2014), 122. 8. Jonathan Colman, The Foreign Policy of Lyndon B. Johnson: The United States and the World, 1963–1969 (Edinburgh: Edinburgh University Press, 2010), 163–6. 9. Memorandum of a conversation between President Johnson, Thomas Mann and Latin American diplomatic representatives, 11 May 1964, FRUS 1964– 1968 Vol. XXXI, Doc. No. 13. 10. Tom Tunstall-Allcock, ‘Becoming “Mr Latin America”: Thomas C. Mann Reconsidered’, Diplomatic History (forthcoming). 11. Transcript, Thomas C. Mann Oral History Interview I, 11/4/68, by Joe B. Frantz, www.lbjlib.utexas.edu/johnson/archives.hom/oralhistory.hom/mann-t/ mann.pdf, accessed 1 September 2014. Copy, LBJ Library, Austin, Texas. 12. LBJ quoted in Randall Woods, ‘Conflicted Hegemon: LBJ and the Dominican Republic’, Diplomatic History, Vol. 32, No. 5 (November 2008), 749– 66; McPherson, Yankee No!, 117– 62; Gilderhus, The Second Century, 184– 94; Stephen Rabe, ‘The Johnson Doctrine’, Presidential Studies Quarterly, Vol. 36, No. 1 (January 2006), 48 – 58.

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13. Alan McPherson, ‘Latin America’, in Mitchell Lerner (ed.), A Companion to Lyndon B. Johnson (Malden, MA: Wiley-Blackwell, 2012), 387– 400. 14. Joseph Tulchin, ‘The Promise of Progress: United States Relations with Latin America during the Administration of Lyndon B. Johnson’, in Warren Cohen and Nancy Bernkopf Tucker (eds), Lyndon Johnson Confronts the World: US Foreign Policy, 1963 –1968 (New York: Cambridge University Press, 1995), 211– 45; Brands, ‘Third World Politics in an Age of Global Upheaval’; Mark Atwood Lawrence, ‘History from Below: The United States and Latin America in the Nixon Years’, in Frederik Logevall and Andrew Preston (eds), Nixon in the World: American Foreign Relations, 1969–1977 (New York: Oxford University Press, 2008), 269–89; Harmer, Allende’s Chile, 255–75; on the abandonment of development, Hal Brands, ‘Economic Development and the Contours of U.S. Foreign Policy: The Nixon Administration’s Approach to Latin America, 1969– 1974’, Peace & Change, Vol. 33, No. 2 (April 2008), 243–73. 15. Grandin, ‘What Was Containment?’ 16. Nomi Prins, All the President’s Bankers: The Hidden Alliances That Drive American Power (New York: Nation Books, 2014), 198– 9, 212– 23. 17. On the influence of race, Schoultz, Beneath the United States; on the Monroe Doctrine, Jay Sexton, The Monroe Doctrine: Empire and Nation in NineteenthCentury America (New York: Hill and Wang, 2011); Ryan, US Foreign Policy in World History, 40 –54. 18. Dwight D. Eisenhower, Waging Peace: The White House Years, 1956– 1961 (London: Heinemann, 1965), 514– 15; Connelly, Fatal Misconception. 19. Democratic Party Platform, 11 July 1960, taken from www.presidency.ucsb. edu/ws/index.php?pid¼29602, accessed 15 May 2014. 20. Robert Dean, ‘Masculinity as Ideology: John F. Kennedy and the Domestic Politics of Foreign Policy’, Diplomatic History, Vol. 22, No. 1 (Winter 1998), 29 – 30; K.A. Cuordileone, Manhood and American Political Culture in the Cold War (New York: Routledge, 2005). 21. For this comparison, Barbara Keys, Reclaiming American Virtue: The Human Rights Revolution of the 1970s (Cambridge, MA: Harvard University Press, 2014), 270– 1. 22. Rakove, Kennedy, Johnson, and the Nonaligned World, 263. 23. Melvyn Leffler, A Preponderance of Power: National Security, the Truman Administration, and the Cold War (Stanford, CA: Stanford University Press, 1992), 495– 511. 24. Special Report by the Operations Coordinating Board to the NSC, 26 November 1958, FRUS 1958– 1968 Vol. V, 36– 60. 25. Minutes of an NSC review group meeting, 3 July 1969, FRUS 1969– 1976 Vol. E-10, Doc. No. 3. 26. Study prepared in response to National Security Study Memorandum 15, 5 July 1969, FRUS 1969– 1976 Vol. E-10, Doc. No. 4. 27. Hal Brands, ‘Economic Development and the Contours of US Foreign Policy: The Nixon Administration’s Approach to Latin America, 1969– 1974’, Peace &

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Change, Vol. 33, No. 2 (April 2008), 243–73; for an assessment of the impact that the 1970s had on US foreign policy, Daniel Sargent, A Superpower Transformed: The Remaking of American Foreign Relations in the 1970s (New York: Oxford University Press, forthcoming); for keeping the region quiet, Mark Atwood Lawrence, ‘Latin America and the Quest for Stability’, in Melvin Small (eds), A Companion to Richard Nixon (Oxford: Wiley-Blackwell, 2011), 460– 2, quote on 461. 28. On the era of violence that would engulf the region, with the US playing no small part, Greg Grandin, Empire’s Workshop: Latin America, the United States, and the Rise of the New Imperialism (New York: Owl Books, 2007); Westad, Global Cold War, 334– 48.

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INDEX

Acheson, Dean, 44, 50 Africa, 6, 8, 23, 64, 68, 90, 140– 3 Alliance for Progress (AFP), 1 – 2, 9 – 11, 136– 7, 143– 60 Anderson, Robert, 90, 92 – 3 Andrade, Victor, 50 Anti-Americanism, 25, 82, 117– 8 Arbenz, Jacobo, 9, 12, 36 – 8, 45, 53 –6, 119 Argentina, 32, 42 – 6, 49, 50 – 2, 56, 61, 72, 123, 126, 155– 7; and Buenos Aires Conference (1957), 89, 93 – 5; and International Monetary Fund (IMF), 123 Armas, Castillo, 55 Asia, 4, 8, 14, 22 – 3, 34, 55 – 7, 62 –4, 68 – 9, 90, 130, 140– 1, 143, 148, 153 Balance of Payments, 19, 35, 47, 98 –9, 100, 124, 158– 9 Ball, George, 144 Batista, Fulgencio, 111– 2 Bay of Pigs, 112, 119, 136, 148 Beaulac, Willard, 32 Bedell Smith, Walter, 27, 31, 59 Bell, John, 130– 1 Berle, Adolf, 75 – 6, 138, 145

Betancourt, Romulo, 88, 118– 9 Bogota, Act of, 24 Bogota Conference (1960), 133, 145 Bolivia, 4, 9, 11, 33, 42 – 3, 56, 70, 113, 120, 174; and US response to 1952 revolution, 49 – 52 Bonsal, Philip, 113 Bowie, Robert, 56 – 7 Bowles, Chester, 151–2 Braden, Spruille, 117 Brazil, 2, 42 – 3, 50 – 2, 56, 72, 99, 113, 122, 126– 7, 157; and Operation Pan America (1958), 105– 9, 120; and request for IMF assistance, 123– 4 and Rio de Janeiro Economic Conference (1954), 57 – 62; and US response to Vargas government loan request (1953 – 4), 27 – 8, 46 – 9; Buenos Aires Economic Conference (1957), 91 – 6, 100 Bulganin, Nikolai, 64, 71, 77 Bundy, McGeorge, 151 Bureau of the Budget, 59, 154 Burgess, Randolph, 92 Business Advisory Council, 98 –9

INDEX Cabot, John Moors, 33, 36, 45, 50, 54, 123– 4 Capitalism, 4 – 5, 32, 44, 75, 102 Caracas Conference (1954), 36 – 9, 54 – 5, 80 Caribbean , 112, 116– 20, 125– 6, 136, 148– 9 Castro, Fidel, 2, 11, 117, 168; and Cuban Revolution, 111 – 3, 116; and Eisenhower’s attempts to oust from power, 117– 20, 125, 129– 31, 133; and Kennedy’s attempts to oust from power, 136– 7, 142, 148 Castro, Raul, 116 Central Intelligence Agency (CIA), 24 – 5, 40, 49, 67, 101, 143; and Bay of Pigs Operation (1961), 112, 136, 148– 9 and intervention in Guatemala (1954), 52 – 5; Chile, 32, 56, 118, 126, 129, 155– 6 Coffee, Pricing Agreement, 73, 77, 98 – 100 Communism: generally, 4, 8, 13– 4, 18, 22 – 4, 41, 57, 68 – 70; in Guatemala, 52 – 5; in Latin America, 22 – 5, 37, 47, 58, 63, 71 – 3, 77 – 8, 85 –8, 101– 8, 112–9, 125–6, 145– 6, 148, 163 Congress, 11, 17, 34, 41, 44 – 5, 59, 61 – 3, 69 – 70, 90, 117– 8, 122, 132, 137, 163; and funding for Alliance for Progress, 138, 142, 144– 5, 149, 152– 3, 159, 169– 72 Council on Foreign Relations (CFR), 70, 122, Cuba, 4, 6, 13, 31, 110– 3, 116– 20, 129– 31, 133, 136– 7, 147– 9, 157, 163, 168, 174 Cuban Missile Crisis (1962), 159, 161 Decolonisation, 8

237

Democracy, 13 – 4, 66, 72, 77, 101– 4, 157, 165 Department of Commerce, 22, 90, 154, 159, Department of Defense, 114 Development Loan Fund, 70 Diefenbaker, John, 119 Dillon, Douglas, 90 – 4, 105, 108, 120, 132–3, 137, 154, 159 Dreier, John, 36, 100 Dulles, Allen, 24 –5, 40, 53 –5, 68 – 9, 101, 119, 136 Dulles, John Foster: and Argentina, 45; background, 17 – 8; and Bolivia, 50 – 1; and Brazil, 47 – 9, 106– 9; and Caracas Conference, 36 –9; and Guatemala, 54; and Latin America, 23 – 4, 30 – 1, 62, 77 – 8, 81 – 5, 87, 91 – 7, 101– 5, 110; replacement as secretary of state, 111; as secretary of state, 18 – 22, 64, 67 – 70 Dungan, Ralph, 154 Eisenhower, Milton: and Argentina, 44; and Latin America generally, 16, 61 – 2, 80 – 1, 90 – 2, 96, 114– 5, 126, 134; Report on Latin America (1953), 31 – 7, 85; Report on Latin America (1958), 103– 7, 109– 10, 114 Elliott Bell, David, 156 Estenssoro, Paz, 49 –52 Export-Import Bank (EXIM), 27 – 8, 33, 43, 45, 47, 57 – 9, 61, 77 – 9, 122, 125 Foreign Operations Administration (FOA), 57 –60

238

THE US AND LATIN AMERICA

Goodwin, Richard, 138, 143–4, 151– 2, 170 Gordon, Lincoln, 143 Guatemala, 2 –4, 9, 12– 3, 18, 25, 36, 42 – 3, 52 – 6, 63, 70, 72, 116, 120– 1, 130, 162, 174 Hagerty, James, 79 Haiti, 48, 116 Herter, Christian, 111, 116– 9, 126, 129, 133 Hodges, Luther, 150, 154, 156 Holland, Henry: and Argentina, 45 – 6; and Brazil, 48; and Latin America generally, 57– 9, 61 –2, 77, 89 Honduras, 48 Hoover Jr., Herbert , 61 –2, 77 Hughes, Emmett, 30 –2 Humphrey, George, 20– 1, 27, 41, 47, 50, 60 – 2, 68 – 70, 72 – 4, 90 – 1, 115 Inter-American Development Bank (IADB), 105– 7, 110, 116, 121– 3, 125, 132 International Coffee Organization (ICO), 99 International Monetary Fund (IMF), 43, 123– 4 Jackson, C.D., 20, 41 Jimenez, Marcos Perez, 88 Johnson, Lyndon, 163– 5 Joint Brazil-United States Economic Development Commission, 48 Joint Chiefs of Staff (JCS), 75, 82 Kennedy, John, 1 – 7, 10 – 3, 15, 75, 103, 119, 120, 130 – 1, 135 – 74 Khrushchev, Nikita, 67, 126, 136, 159 Kissinger, Henry, 171– 3

Kubitschek, Juscelino, 105– 10, 123–4, 130 Lippmann, Walter, 120 Mann, Thomas, 90, 96 – 7, 121, 124, 143, 164– 5 Martin, Ed, 143, 157– 8 Marxism, 141 McCone, John, 136–7 Middle East, 22, 55, 64, 140– 1, 148 Millikan, Max, 41, 140 Morales-Carrion, Arturo, 155 Morse, Wayne, 130 Moscoso, Teodoro, 143, 149, 155 Movimiento Nacionalista Revolucionario (MNR), 49 –50 Mutual Security Program, 35, 69 –70 National Security Council (NSC), 20– 1, 24 – 6, 38, 49, 52, 59– 60, 64, 67, 72 – 3, 101–3, 115–9, 124, 131, 134– 6, 173 New York Herald Tribune, 157 New York Times, 1, 30, 44, 61, 75 – 6, 87, 94, 109, 130, 133, 156 Nixon, Richard: and Central America trip (1955), 55, 73; as president, 166, 172– 3; and South American tour (1958), 4, 87 – 9, 97, 100– 6, 109– 10 as vice president, 2, 30, 67 – 9, 113, 119– 20, 142 NSC 144/1 (1953), 19, 24 – 9, 30 – 4, 39, 42, 52, 56, 116, 133, 168 NSC 5432/1 (1954), 57 – 60, 71, 73, 81 NSC 5602/1 (1956), 69 NSC 5613/1 (1956), 81 – 3, 85 NSC 5902/1 (1959), 9, 115–6, 120, 134 Operations Coordinating Board (OCB), 32, 37, 58, 72, 78, 83 – 5, 89, 102, 104, 110, 125, 171

INDEX Operation Pan-America (OPA), 105– 10, 121, 123 Organization of American States (OAS), 30, 36, 54 – 5, 79, 82, 100, 107, 118, 129– 30, 133 Panama, 16, 54 Panama Presidents’ Meeting (1956), 78 – 82, 127 Passman, Otto, 149 Peixoto, Amaral, 107 Peron, Juan, 43 – 6 Poverty, 1, 5, 9– 10, 21, 23, 68, 100, 107, 125– 9, 132 Prebisch, Raul, 32, 39, 93 Puerto Rico, 126– 7 Punta del Este Conference (1961), 144, 154, 163 Radford, Arthur, 82 Randall, Harold (Randall Commission), 41, 56, 80 Reston, James, 133 Rio de Janeiro Economic Conference (1954), 57 – 62, 71, 73, 77, 105 Rockefeller, Nelson, 30, 72 Roosevelt, Franklin, 148, 161 Rostow, Walt, 41, 138– 44, 168– 9 Rubottom, Roy, 90 – 2, 95 – 9, 106– 7, 110, 118 Rusk, Dean, 151 Santiago Conference (1959), 118, 126 Schlesinger, Arthur, 138, 142– 6, 151, 154– 5, 158, 165, 170

239

Social Progress Fund, 125–8, 130–4 Soviet Union, 8, 11, 14, 18, 22 – 4, 54, 64 – 9, 74 – 5, 81, 137, 140 – 2, 161, 163, 169 Stalin, Josef, 19 – 22, 64 Stassen, Harold, 26 –7, 57 –60, 65, 68, 73– 4, 91, 115 Stevenson, Adlai, 140– 1, 148– 50 Test Ban Treaty, 161 Time, 33, 43, 51, 152 Treasury Department, 59, 92, 114, 154 Trujillo, Rafael, 73, 112, 118–9, 131, 148 Truman, Harry, 17 – 9, 24, 29, 44, 48– 50 United Nations, 24, 148 United States Information Agency (USIA), 156 Uruguay, 126, 133 Vargas, Getulio, 47 – 9 Venezuela, 36, 72, 76, 87 – 8, 98, 112, 118, 162 Vietnam, 165 Washington Post, 33, 51, 76, 93, 113, 123, 126, 129, 156 Wilson, Charles (Charlie), 67, 72 Woodward, Robert, 36, 58 World Bank, the, 33, 43, 121, 125