Latin America and United States policies

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Latin America and United States policies report of Senator Mike Mansfield on a study mission to Latin America
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Document / Senate ;
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1 online resource (v, 85 p.) : maps. ;
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Mansfield, Mike, 1903-2001
United States -- Congress. -- Senate. -- Committee on Appropriations
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Relations -- United States -- Latin America   ( lcsh )
Relations -- Latin America -- United States   ( lcsh )
Relations -- États-Unis -- Amérique latine   ( ram )
Relations -- Amérique latine -- États-Unis   ( ram )
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Title from PDF t.p. (LLMC Digital, viewed on Sept. 25, 2010)
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"Submitted by Senator Mike Mansfield to the Senate Committee on Appropriations on January 13, 1962"--T.p. verso.
General Note:
Includes as appendices 6 reports by Senator Mansfield on Latin America.

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Columbia Law Library
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Columbia Law Library
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oclc - 663150050
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lcc - F1418 .U431
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AA00001340:00001


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87TH CONGRESS SENATE DOCUMENT
2d Session SENATE No. 82


LATIN AMERICA AND

UNITED STATES POLICIES




REPORT
OF

SENATOR MIKE MANSFIELD
ON A STUDY MISSION
TO

LATIN AMERICA


MARCH 29 (legislative day, MARCH 28), 1962.-Ordered to be printed
with illustrations


U.S. GOVERNMENT PRINTING OFFICE
81934 O WASHINGTON : 1962


) C -; .4





7X




L/



S. Res. 302
IN THE SENATE OF THE UNITED STATES,
March 29 (legislative day, March 28), 1962.
Resolved, That there be printed with illustrations, as a Senate
document, a report entitled "Latin American and United States
Policies", submitted by Senator Mike Mansfield to the Senate Com-
mittee on Appropriations on January 13, 1962; and that two
thousand additional copies be printed for use of that committee.
Attest:
FELTON M. JOHNSTON,
Secretary.















CONTENTS


Page
1. Introductory ---------------------------------------- 1
2. Current situation in Latin America.------------------------------- 2
3. U.S. interests-------------------------------------------------- 4
4. U.S. policies and administration------------------------------- 8
5. Concluding comments and recommendations ----------------------- 10
Appendixes:
I. U.S. technical assistance in Haiti---------------------------- 19
II. U.S. technical assistance programs in Mexico and Central America_ 31
III. Mexico ------------------------------------------------- 39
IV. Technical cooperation in the Andes countries of South America__ 51
V. Mexico-United States interparliamentary group--------------- 69
VI. The basic problem of Latin America ------------------------ 81
M















LETTER OF TRANSMITTAL


JANUARY 13, 1962.
Hon. JOHN L. MCCLELLAN,
Chairman, Senate Subcommittee on State, Justice and the Judiciary and
Related Agencies, U.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: Submitted herewith is the report which we
agreed that I should make at the conclusion of the study in Latin
America of the Subcommittee on State, Justice, and the Judiciary
and Related Agencies, of the Appropriations Committee. I would
suggest that release of this report be deferred until the conclusion of
the Punta del Este Conference which is scheduled to convene in
Uruguay on January 22. The views expressed in this report are
those of one Senator and are intended to contribute to the considera-
tion of certain foreign policy questions by the Senate. The views
expressed by the U.S. delegation at Punta del Este will be those of
the President and, hence, the official position of the U.S. Government.
There should be no confusion on that score.
There is not treated in detail in this report the operations of the
various U.S. agencies in the nations which we visited since that subject
is being considered by the subcommittee as a whole. What I have
sought to do here is to suggest major aspects of the Latin American
situation of which we need to be aware, both in weighing issues of
foreign policy and in legislating on related matters, notably aid pro-
grams and the staffing of agencies of the executive branch which
operate abroad. Also included are individual conclusions and recom-
mendations respecting our interests and our foreign policies which
grow out of these observations and other studies over the years. The
appendix contains reprints of reports which I have made on Latin
America in preceding years to the Committee on Foreign Relations
and other observations.
This report is submitted in my capacity as an ex-officio member of
your subcommittee, from the Committee on Foreign Relations. May
I take this occasion, Mr. Chairman, to express my deep admiration
for the manner in which you conducted the subcommittee's proceed-
ings. It was a privilege to serve under your outstanding leadership
and with the other able members of the subcommittee, Senators
Smith (Maine), Dworshak, Bible, and Hruska. I am confident that
the subcommittee's work will be of benefit to our relations with the
Latin American nations.
I should also like to express my thanks to the staff personnel from
the Senate and the Air Force as well as to the personnel of the U.S.
offices abroad. Their assistance and cooperation were most beneficial
to the purposes of the study.
Sincerely yours,
MIKE MANSFIELD.
V












LATIN AMERICA AND UNITED STATES POLICIES


1. INTRODUCTORY
In Latin America, as elsewhere in the world, the maintenance of
the most effective possible relations is dependent on our part on three
principal factors: (1) An accurate comprehension of the situation as
it exists and as it is evolving; (2) an accurate comprehension of our
interests and a sense of proportion as to the importance of specific
interests to the Nation as a whole; (3) the development of effective
policies and their administration in a fashion which permits a realistic
adjustment of our interests to the evolving situation.
If our understanding of the situation in Latin America is inaccurate,
our relations will be correspondingly less effective. If we do not
adequately comprehend our various national interests and the inter-
play between them, our relations will be correspondingly less effective.
If our policies and their administration persist in the ingrained paths
of the past out of inertia or if they change simply for the sake of change,
if they presume to do more than it is practicable to do or less than
they can potentially do, our relations will be correspondingly less
effective.
In all three factors-in comprehension of the situation, in evaluation
of our interests and in adjustments of the two through practical
policies and alert administration-there have been deficiencies for
many years. Significantly, there is recognition of that fact in this
Nation. When we speak in general terms of our difficulties with or
our neglect of Latin America we are referring, in specifics, to deficien-
cies in one or more of these three factors.
The Alliance for Progress represents a profound effort of leadership
which could hasten the end of many of these deficiencies. In concept,
it recognizes that Latin America is in an era of far-reaching change.
In concept, it recognizes that we have a special concern in hemispheric
affairs and that certain of our interests have deepened sharply or
otherwise altered in recent years. In concept, it recognizes that we
must modify old approaches and find new approaches, as necessary,
in order to safeguard our interests in the light of the changing situa-
tion.
The Alliance for Progress, however, is a prescription for action; it
is not, of itself, action. It is a promise of substantial benefit to the
people of this hemisphere, our own included. The fulfillment of the
promise depends on action, on the actions of many, not on those of
the President alone or of the United States alone. The fulfillment
depends on wise political and other leadership not only here but
throughout the Americas. It depends on the adaptability and
dedication of the bureaucracies of this Nation, of the other American
republics, and the agencies of inter-American and international
cooperation. It depends upon a high degree of mutual understanding





LATIN AMERICA AND UNITED STATES POLICIES


among the peoples of the Americas so that there can be an accurate
identification of common needs and reasonable expectations. Failure
to meet these requirements will compel modifications in the Alliance
for Progress. A significant abdication of these responsibilities may
render the concept largely irrelevant to the future of the hemisphere.

2. THE CURRENT SITUATION IN LATIN AMERICA
The situation in Latin America is not one of unrelieved social
stagnation, technical backwardness, and human misery. Conditions
which may be so characterized exist in many parts of the region but
it is inaccurate and misleading to view the entirety in that light.
S Similarly, there is a degree of Communist influence in the Latin
American countries and there is a high level of political instability in
many of them. But, again, it is inaccurate and misleading to view
the whole as seething with unrest and on the verge of collapse into
communism.
Yet these overdramatized simplifications have come to dominate
much of our thinking with respect to Latin America. Their in-
accuracy or more properly, their one-sidedness represents a significant
danger to the United States and to the hemisphere. The concepts
have become deeply involved in the design and administration of our
policies with respect to Latin America. To the extent that these
policies represent a response to an incomplete interpretation of the
situation, they can bring about inappropriate action. At best, the
policies are likely to prove as ineffective as they are costly. At worst,
they may act inadvertently against our interests and to enhance the
role which communism and other totalitarian forms play in Latin
America.
Therefore, in considering policies for Latin America, it is essential
to bear in mind that what is involved is not a flat surface painted in
the twin tones of misery and communism. Rather, it is a faceted
situation in which there is a great deal of glitter along with the gloom
and a whole spectrum of political forms and possibilities.
To be sure, we are considering an area of high illiteracy rates, an
area in which there are millions of people who do not even speak Span-
ish or Portuguese, let alone read or write these principal national
languages. We are considering an area in which millions of people
obtain few, if any, of the public services and the material conveniences
which we associate with modern life. We are considering an area in
which millions of people have little, if any, modern medical care, an
area in which high rates of death at birth and other factors shorten
average life expectancies. We are considering an area in which mil-
lions of people eke out a bare subsistence under antiquated systems of
tenure and inefficient techniques of agriculture. We are considering
an area in which millions of the dispossessed from the countryside
flow into and around the cities and live in appalling conditions of
squalor.
All these conditions are to be found in Latin America. But this
picture of backwardness is incomplete if it is taken as the whole.
We are also considering an area in which tens of millions of people do
read and write, an area which contains nations with high literacy
rates. We are considering an area which includes several of the
great cities of the globe, cities of extraordinary design and dynamism,





LATIN AMERICA AND UNITED STATES POLICIES


cities whose services and concentrations of modern amenities and
cultural achievements rival those found elsewhere in the world. We
are dealing with nations which contain a substantial supply of modern
medical and other scientific and technical skills. We are dealing
with nations which have great resources of natural wealth in proportion
to population.
We are dealing, finally, with nations which are in the midst of an
expanding industrialization. If this process is stimulating inflationary
pressures and other difficulties for millions, it is also producing new
wealth, new benefits, and new opportunities and it is expanding the
reservoir of skills for further development.
The brighter facets of the situation do not reflect evenly within the
nations of Latin America. On the contrary, there is, generally, a
widening contrast as between city and countryside in each nation.
Nor is the reflection even as among the nations. A dynamic of prog-
ress, for example, is very much in evidence in Mexico. It is less
evident, but it is not absent, elsewhere.
The important point, however, is that positive economic and social
factors are to be found in the situation in Latin America. An appre-
ciation of them is essential to an accurate understanding of the area.
Any approach to policy which ignores or underestimates these factors
by an obsessive fixation on the misery and backwardness which are
also present, begins on an erroneous premise. Inevitably, the error
will multiply in the actions which unfold under the policy.
In a similar fashion, it is essential to keep a sense of balance with
respect to political developments in Latin America. As already
noted, there is a Communist factor, spectacular in Cuba and less
evident but nevertheless present in greater or lesser degree throughout
Latin America. There is a high level of political instability in some
nations which is related not only to communism but to more tradi-
tional political deficiencies. Jefeism, for example, military dictation
of politics, oligarchic control, mob violence, and other such practices
are by no means gone from the scene.
Again, however, the positive factors should not be overlooked.
The forms of popularly responsible government exist in most of the
nations of Latin America. Furthermore, an extension in the practice
of such government seems still to be the dominant trend.
In this connection, it would be well to bear in mind the experience
of our close neighbor, the Republic of Mexico. After a century of
government by coup, a far-reaching revolution took place which
caused great anxiety at the time. However, out of that revolution
evolved the responsible Government which exists today and with
which excellent relations are maintained. That Government has
operated in a pattern of freedom for many years and through several
recent transitions of the Presidency which have been brought about
by peaceful elections. Under that Government there have already
been striking economic and social advances and there is well-based
hope for the continuance of this progress.
In a situation as varied as that which prevails in Latin America, few
generalizations are valid. There is one, however, which approaches
a universality of application. An enormous pressure for change exists
in Latin America. It is operating on many levels and in different
ways. At base, however, this pressure is not much different from
that which affects other parts of the world. In a sentence, there is a
81934 O-62-2





LATIN AMERICA AND UNITED STATES POLICIES


growing determination on the part of ordinary people to live their
lives with a greater sense of personal worth, with a fuller participation
in national life and with more ample and more equitable access to the
human benefits which are the promise of modern science and tech-
nology. This determination may take the form of a simple desire
for piped water in a village in the Andean highlands. It may be a
desire for automobile transportation in the cities or some other such
amenity. It may be a demand for more schools. It may take an
abstract form such as the deep questioning of existing social structures
and that intense examination of philosophies and ideologies which is
generally characteristic of university life in Latin America. Whatever
the form, the determination exists throughout Latin America and is
already producing significant changes in the area.
The principal question, then, with respect to the situation in Latin
America is not whether the region will change but whether or not
the change will be rapid enough and can go deeply enough by processes
that are peaceful and evolutionary.
The requirements for evolutionary change are clear. In the first
place, there must be a modernization and a great and continuing
expansion of the facilities for the production of goods and services.
In the second place, there must be or there must come into being,
promptly, institutions which are capable of bringing about a wide
diffusion of the benefits of expansion and modernization, institutions
which act to increase popular participation in national life, institu-
tions which serve to insure increasing respect for the intrinsic dignity
of all people.
These requisites have very specific implications in Latin America.
They mean bringing into production millions of acres of unused or
underused land through resettlement, through irrigation and reclama-
ticn and an expanded use of the whole range of scientific agricultural
techniques. They mean a great development of communications and
transportation. They mean a rapid growth in industrial production.
They mean a spread of social services in the countryside no. less than
in the cities. They mean an end to illiteracy and also the fostering
of technical training and scientific inquiry. They mean tax reform.
They mean dedicated civil servants. They mean a decline in ex-
ploitative and demagogic government. They mean an extension of
responsible government.
In some Latin American nations, there appear to be reasonably
good prospects for meeting these requirements. Elsewhere the pros-
pects for evolutionary change are not encouraging. Where change
does not come about by such means, however, the alternative is not
likely to be an indefinite tolerance of the existing situation. Rather,
it is likely to be militant efforts to produce change by revolutionary
means, in traditional or newly imported patterns.

3. U.S. INTERESTS
It is against this background of both backwardness and progress
and, above all, of widespread change, in process or incipient, evolu-
tionary or revolutionary, that the three major U.S. interests with
respect to Latin America must be viewed if they are to be safeguarded
effectively. The first and paramount of these interests is the mainte-
nance of friendly political ties within the hemisphere. These ties





LATIN AMERICA AND UNITED STATES POLICIES 5

which date from the dissolution of the colonial relations with Europe
in the 18th and 19th centuries, have had a checkered history. There
has been great respect and admiration for this Nation in Latin
America-for its concepts of freedom and for its achievements. And,
on our part, there has been a continuing thread of warm sympathy
with Latin America growing out of the common revolutionary experi-
ence with respect to Europe and the difficulties which have been en-
countered by its peoples under exploitative government.
There have also been very serious difficulties with various Latin
American nations at various times. The present conflict with Cuba,
for example, has many antecedents. Nevertheless, inter-American
ties have held in essentials and, in essentials, every effort' must be
made to see that they continue to hold and grow stronger. They are
immensely desirable now and will become even more desirable in the
future. They are vital in situations of world crisis.
These political ties with Latin America are intimately associated
with the security and peace of this Nation and, hence, have an im-
portant bearing on requirements for defense. One can only speculate
on what the cost of defense, already in excess of $50 billion annually
would be, if there were a huge expanse of hostility to the south, rather
than the essentially friendly neighbors which we now have. o
These ties of inter-American friendship also undergird the other
two principal U.S. interests-trade and investment. Inter-American
trade may involve directly the well-being of a relatively small per-
centage of our population but indirectly it involves us all. Latin
American products form an integral part of the consumer habits of
our citizens and are woven into our industry and commerce. Our
exports to Latin America of agricultural and manufactured products
and services are linked with the livelihood of many of our citizens.
The present importance of inter-American trade and its potential
are indicated by a growing volume. In 1940 our exports to Latin
America totaled $1 billion and our imports from Latin America were
$900 million. In 1960, exports were $5.2 billion and imports were
$4.7 billion. We might well contemplate the importance of the
returns, wages and other benefits which are involved for our own
people and the Latin Americans in a trade of $10 billion annually.
Trade can and does take place, of course, without the maintenance
of close political ties. But the relationship of such ties to trade is
indicated in the extreme case of Cuba. In 1957, Cuban-United States
trade amounted to over $1 billion. That trade, today, is down to
an annual rate of under $50 million.
In a similar fashion, the third principal U.S. interest with respect
to Latin America-investment- is closely associated with these ties.
U.S. investments in that area have grown from $2.8 billion in 1940
to a total of $8.4 billion in 1960. In a reverse fashion, again, to cite
the extreme case of Cuba, the total of U.S. private investment in
Cuba stood at $850 million in 1957 but this investment has been
completely overwhelmed by the hostility which now characterizes
Cu an-United States relations.
-At should be stressed that these interests are not one sided If
they meainmuch to us, they mean a great deal to the Latin American
nations. 'If friendly political ties with Latin America act to reduce
the cost of defense to us and increase our security, these ties do the
same for Latin America. If inter-American trade means jobs, profits,





LATIN AMERICA AND UNITED STATES POLICIES


and other benefits to this Nation, it has a similar effect in Latin
America. If investment in Latin America brings opportunities and
returns to U.S. citizens, it brings greater productivity, development,
and other benefits to Latin America.
In short, the interests which we have with respect to Latin America
are mutual interests. Because they are, however, we cannot assume
the automatic preservation and extension of these interests. Our
cultural and political ties with the nations to the south are under
intense and continuous propagandistic attack, not only from Com-
munist nations outside the hemisphere and from Cuba but from
various sources within the Latin American nations.
Inter-American trade is beset with serious problems which involve
primary commodities such as copper, lead, and zinc .and for which
durable solutions that meet the need of our own producers and con-
sumers and the Latin American producers have yet to be found.
Competition for international trade is growing rapidly. From
Europe-especially Western Europe-and Asia there is heightened
competition with our typical exports to Latin America. From
Africa and other areas, there is heightened competition with typical
Latin American exports to this Nation.
There is room for great trade channels, not only north and south
within the Americas but east and west to the other continents.
Nevertheless, the impact of regional trade groupings on inter-American
trade is as yet an uncertain one. In the short run at least, these
groupings could be damaging unless there is a common understanding
of the interest of the Americas in hemispheric trade and common
action if necessary to safeguard these interests.
With respect to U.S. investment, the fact that the enterprises
which it sponsors in Latin America may be efficiently managed, pay
high wages and make important contributions to development does
not, of itself, safeguard this interest from erosion. On the contrary,
U.S. investments are often the subject of popular suspicion, political
attack, and damaging legislation.
The degree of difficulty which U.S. investment experiences varies
from place to place and from time to time. Generally speaking,
where there is intense political stimulation of nationalist sentiment
for whatever reason, there is likely to be a high degree of opposition
to foreign business and U.S. business in particular. Generally speak-
ing, where U.S. business operates on a very large scale and is concen-
trated in extractive or plantation-type operations or in public utilities
it is more likely to be a target of hostility than where it is spread in
many units into many industries; emotions are more easily aroused
over a foreign-owned petroleum or utility company than over a
foreign-owned shoe factory. Where U.S.- or foreign-owned business
in general constitutes the major source of economic activity in any
given country, investment is also highly susceptible to attack. That
is the case, particularly, where locally owned enterprises of a modern
type are just coming into being and are unsure of their competitive
capacities or where the taxing of foreign enterprises may seem to
offer a politically palatable alternative to internal fiscal reform.
Measures to neutralize the opposition to U.S. investment have had
some effective results. The Department of State has pushed hard
for treaties, agreements, and other corrective action. The information
program conducts general public relations programs on the virtues of





LATIN AMERICA AND UNITED STATES POLICIES


our system. U.S. enterprises have made themselves more acceptable
in certain localities by better selection and training of personnel for
service in Latin America. Some have "self-nationalized," in the
sense of incorporating ever larger numbers of Latin Americans in
management, by buying locally wherever possible, by encouraging
local capital to join with U.S. capital in corporations of mixed owner-
ship, by participating in a broad range of community activities, and
by similar means.
It is doubtful, however, that such measures in themselves will
Suffice to end the basic difficulties of U.S. investment in present cir-
cumstances. The experiences of U.S. mineral producers are revealing
in this connection. In one country, these producers have sought to
pursue most of the constructive measures noted above. Further,
wage payments to local workers and the liberal benefits which are
provided raise real earnings far above the average in the country of
operation and to a level which is comparable to that of similar workers
in this Nation. The profits from these operations are nominal by
U.S. standards and far below returns which are common in Latin
America. Nevertheless, these operations are under constant political
pressure and are jeopardized by tax squeezes, with the threat of
further measures always in the background.
The difficulties which U.S. investment experiences in Latin America
are not unique to that area. Generally speaking, these difficulties are
endemic in developing nations. In all honesty, we should not over-
look the fact that examples of opposition to foreign-owned business
are not alien to our own earlier history of economic development. In
time, the growth and expansion of locally financed and managed
enterprise should tend to reduce the difficulties because foreign-owned
enterprises become "lost," so to speak, in a setting of substantial
economic development. But so long as private U.S. investment con-
stitutes a very conspicuous part of the total economy of any Latin
American nation, so long as a large percentage of this investment is
concentrated in the ownership of what might be termed the "emotional
industries"-that is, those involving the direct exploitation of natural
resources-the problems of safeguarding this interest are not likely
to be solved. And, unsolved, the problems exacerbate all the diffi-
culties of maintaining effective relations.
A less evident but none the less real danger to all our interests re-
specting Latin America is the difficulty of adjusting national attitudes
both on our part and on the part of the Latin Americans to a situation
of great transition. As noted, in Latin America, these attitudes con-
tain a high degree of respect and even affection for this Nation. But
there is among Latin Americans also a hangover frcm an earlier day
when we were widely characterized as the "Colossus of the North."
And there is a hangover in this Nation of militant sentiments of omnip-
otent responsibility for whatever occurs in Latin America, particu-
larly in the Caribbean area. These feelings can be aroused on both
sides. In Latin America, they can be aroused by the words of political
and other leaders. The experience with Cuba in the early days of the
Castro regime is revealing in this connection. There is little doubt
that feelings of mass hostility were readily stimulated and channeled
against this Nation by the Cuban revolutionary leaders at that time.
Unfortunately, such feelings cannot be so readily abated on our
part. They cannot be abated by words alone, no matter how much





LATIN AMERICA AND UNITED STATES POLICIES


may be said by the information program and how well it may be said.
The principal reason is nationalism. Misguided or otherwise, it is
already by far the more powerful factor in any Latin American situa-
tion in which we may be encountering serious difficulties.
Sober information programs have value in correcting distortions and
in affirming our policies. But words and propaganda, per se, also
have a point of diminishing returns. An excess of words, apart from
cost, tends to intensify adverse reactions because it suggests that we
do protest too much. And if the excess becomes so great as to suggest
tilting with windmills it can tend to the ludicrous.
In short, there is no verbal panacea which will eliminate quickly
certain negative attitudes which have long lain beneath the surface
of our friendly relations with the nations of Latin America. These
attitudes can be softened but they will persist for some time to come
and occasionally will break forth in angry statements or unfriendly
acts. Presidential visits, interparliamentary meetings, exchanges of
persons, cultural interchange, sensible information programs, and
other devices for promoting understanding are very helpful. But the
deeper solution lies in a long and constructive experience in Latin
America, with the flowering of a sound national consciousness, with
the strengthening of national stability, with the development of
broader contacts with the rest of the world, and with the growing
mutual benefits of inter-Americanism.
The distorted attitudes of the past, among other factors, must be
borne in mind as we move into an era of more intense attention to
Latin American affairs. There is cause for neither apology nor
arrogance in the history of our relations with Latin America and
neither apology nor arrogance will serve our contemporary interests.
There is cause in this history for a most determined effort to under-
stand the situation as it is today and to deal with it with restraint.
4. UNITED STATES POLICIES AND ADMINISTRATION
This effort is especially necessary in view of the changing situation
in Latin America. It is important to bear in mind that we are
dealing less and less with a region containing preponderantly inert
populations, governed and otherwise controlled by a relative handful
of people. In these circumstances, it is increasingly insufficient merely
to maintain good relations with Latin American governments unless
those governments, in turn, are in good standing with their own
peoples. It is not enough for our representatives to enjoy a close
association with a small group of officials and others at the top
especially if that group, in turn, does not enjoy a close association
with its own people. It will not serve our interests to be admired by
those who are little admired by their own people. If the term "our
friends in Latin America" is to have meaning in the sense of policy,
it must relate to those who are regarded as friends by their own
people.
An approach of policy which is heavily and indiscriminately de-
pendent on incumbent wielders of power and little concerned with the
sources of power or the changing nature of power in Latin America is
one that is full of pitfalls for the interests of this Nation. It will
become increasingly inadequate as the beachhead societies so charac-
teristic of the past in Latin America continue to give way to more
rounded national societies.






LATIN AMERICA AND UNITED STATES POLICIES


If older approaches are inadequate, there is also considerable doubt
that the newer approach which has permeated policy in recent years-
the approach associated with foreign aid-offers any greater assur-
ance for the maintenance of effective relations and the safeguarding
of our interests. This approach has been carried over from the
successful experience with the Marshall plan in Western Europe. It
has relevance to the situation in Latin America, but only if it is ad-
justed to what is a far different situation. In a sentence, Western
Europe required a substantial but marginal assist to restore itself
after the war, whereas Latin America requires, not restoration but
thorough-going inner change at the outset and a marginal assist in
bringing about that change.
Unless this difference is fully appreciated, any significant flow of
aid to that region will involve grave dangers to the long-range interests
of this Nation. Apart from the prospects of an unending drain on
public resources, such a flow also promises to lead us into a position
of ambiguous responsibility for the support of existing situations which
are intolerable to the people who live in them but in which the resist-
ance to change cannot be overcome by evolutionary means. Aid in
these situations may delay revolutions but unless we are prepared for
an ever-deepening involvement aid is not likely to prevent revolution
in the end. On the contrary, the effect of aid could be to help insure
that communism or some other extreme revolutionary form will be
seen increasingly by millions as the only way out of an intolerable
situation. And, if such revolution does occur, our aid will have placed
this Nation in the position of being one of its principal targets. In
short, we have got to face bluntly the fact that misguided assistance
can prove at least as damaging to our interests as a failure to aid at all.
It is delusive to believe that any practical level of U.S. aid alone
can be the principal factor in maintaining internal stability in Latin
America, except in isolated instances and for limited periods of time.
Similarly, it is delusive to believe that the principal missing ingredient
to satisfactory development in Latin America is such aid as may be
supplied by the United States. ,
Latin America is an area of over 200 million people with an enor-
mous complex of difficulties as well as a great indigenous supply of
natural resources and labor and substantial modern skills. There is
a great pressure for change and there is also a great resistance to
change. We s luld not underestimate the potential of outside aid
in that kind setting, but even more important we should not over-
estimate it. A'Most important, we must recognize that outside aid is
a catalyst which will act with significant effectiveness in promoting
internal stability and development only as it is combined with an
indigenous leadership, able and willing to guide indigenous resources
and skills into channels of benefit for a whole society. /Without such
leadership, there is little prospect of accommodating the reasonable
expectations of the people of Latin America by evolutionary means,
with or without U.S. aid.
The responsibilities for what transpires in the Latin American
countries are, in order, national and hemispheric (and ours only as a
part of the hemisphere). An approach which presumes to reverse
the order or which views the hemispheric responsibility as exclusively
a U.S. responsibility will be as damaging to our long-range interests
as it will be to the interests of the people of Latin America.





10 LATIN AMERICA AND UNITED STATES POLICIES

As indicated at the outset, the Alliance for Progress promises a way
around both the inadequacies of the outmoded approaches of the past
and the pitfalls in the more recent approach of policy which tends to
overemphasize the factor of aid. The phrase, "Alianza para el
Progresso" has circulated throughout Latin America and has met
with warm approval even as it has aroused warm expectations. In
all frankness, however, it must be stated that the full implications of
the concept do not yet appear to be widely grasped either by the Latin
Americans or, indeed, even by our own bureaucracy abroad. On the
part of the Latin Americans, there is still reluctance to face the
realities of national sacrifice which are entailed in the concept, as well
as the limits of U.S. responsibility as one nation of the hemisphere.
Indeed, some of our own representatives in the field may be contrib-
uting to this misunderstanding both by an overanxiety to help and
to publicize our willingness to help.
It is true that it takes time for a concept such as the alliance to filter
through the massive machinery of the bureaucracy. Nevertheless,
we must face the fact that tangible changes in the approach to Latin
America have yet to take place. We must face the fact, too, that
expectations have been kindled which, if they are not met promptly
and vigorously when it is reasonable to meet them or disavowed
promptly and firmly when it is not, may tend to make this Nation
a target for a wave of hostility and ridicule in Latin America.

5. CONCLUDING COMMENTS AND RECOMMENDATIONS
Latin America is in the midst of a dynamic social transition. For
the most part, this transition is proceeding along evolutionary paths.
There is no assurance, however, that it will not veer into channels of
revolution of greater or lesser magnitude in some Latin American
countries.
It is in our national interests that essential change take place in
Latin America by peaceful and evolutionary means. It is also in the
interests of the people of Latin America. This community of interest
is the basis for the Alliance for Progress.
It must be emphasized, however, that the concept assumes the
existence of the essential ingredients for such change in Latin America.
It assumes, for example, dedicated indigenous leadership. It assumes
a willingness on the part of those who are able to do so, to make
moderate sacrifices now for the long-range benefit of their countries.
It assumes the absence of insurmountable resistance to evolutionary
change.
The Alliance assumes, too, that not only this Nation but the other
American Republics and, perhaps, other nations will cooperate in add-
ing such external ingredients as loans, skills, and investment as may
be necessary to evolutionary change in Latin America.
Where the indigenous ingredients are not present, the Alliance for
Progress will not be able to supply them, except in minor isolated
instances. And, as already noted, an overeagerness to apply outside
help may act not to stimulate necessary change but rather serve to
prolong an unsatisfactory status quo.
To delineate and to tread a delicate line between effective aid to
evolutionary change in Latin America and inadvertent aid to the
maintenance of an unsatisfactory status quo is the fundamental





LATIN AMERICA AND UNITED STATES POLICIES


challenge in our contemporary relations with the southern Republics.
The undertaking is extremely difficult and will require great percep-
tion and great restraint. The President will need and should have
the responsiveness of the bureaucracy and the broad support of the
Congress in this effort. For, on finding the line and hewing to it,
rests the future of our interests in this hemisphere. If we do not aid
the transition in Latin America, our interests will suffer. If we aid
in a misguided or inept way, we shall waste public funds and our
interests are likely to suffer at least as much in the end.
This approach will not find favor with those who would have the
United States carry the principal financial burden of maintaining an
unsatisfactory status quo in Latin America, nor with those who would
prefer change by extreme revolution rather than evolution. There
will be criticism in some quarters if this approach is followed, and,
perhaps, even temporary reprisals against our existing interests.
Unless we are prepared, however, to remain firm in the insistence
that we will aid only where there is a reasonable opportunity for the
ordinary people of Latin America to obtain tangible benefit from the
help, we will face, sooner or later, greater difficulties than criticism
and mporary reprisals.
the Alliance for Progress must be clearly understood now and
pursued solely as a vigorous effort to assist in necessary change in
Latin America, for the benefit of the people of that region.,. This
understanding of the Alliance must be established promptly in inter-
American circles. Without it, the Alliance will tend merely to pro-
long the old aid program under a new name and with an increased
and endless drain on public funds.
gfiis understanding must also be established within our own bu-
reaucracy, particularly with respect to the military and nonmilitary
aid programs. Both of these programs have so far been littleaffected
in practice in Latin America by the Alliance for Progress. ,They con-
tinue to operate on the old basis of a- broad commitment of this
Nation to ambiguous responsibilities concerned largely with maintain-
ing internal stability in the Latin American countries. -The commit-
ment is both presumptuous and impractical in terms of policy, as
well as costly. -XIost seriously, the continued pursuit of this commit-
ment can act against the intent 9f the Alliance for Progress by but-
tressing resistance to change. vind if it acts against the intent of
the Alliance, it acts against both our long-range national interests and
the interests of the people of Latin America.
As a first step, then, in bringing our policies in Latin America
into line with the Alliance for Progress, it would appear essential
to divest the existing military and nonmilitary aid programs of the
negative objectives associated with promoting internal stability in
Latin America. /his action would leave military aid with more
appropriate functions largely in connection with hemispheric defense
against actual military aggression.
It is very difficult, of course, to draw a line between military aid
which serves hemispheric defense and military aid which serves to
buttress internal stability. It would be helpful, however, if the
latter term were dropped from the lexicon of the aid programs.
It would be helpful, too, in this connection if the Secretary of State
and the Secretary of Defense were to review, jointly, strategic con-
81934 0-62--3





1Z LATIN AMERICA AND UNITED STATES POLICIES

cepts for defense of this hemisphere and try to arrive at a clear under-
standing of a practical role which specific Latin American nations
may reasonably be expected to play in these concepts. It would
also be helpful to bear in mind that any government which must
rely heavily on outside assistance merely to maintain internal stability
is likely to have very little to contribute to hemispheric defense at a
time of military crisis.
As for the nonmilitary aid programs, they should be divested not
only of such unlimited objectives as helping to maintain internal
stability but they should also be divested of vague objectives con-
cerning the promotion of development in other nations. After these
steps have been taken the slate will have been prepared for a redefini-
tion of specific and practical objectives which will serve the purpose
of the Alliance for Progress.
This redefinition can take place, however, only if the negotiations
with the Latin American nations under the alliance establish the
specific dimensions of our aid commitment with respect to each nation
or regional situation. The Latin American nations should have
reasonable long-range plans of national or regional development.
Under these plans, we should seek as far as possible to define our own
commitment in terms of very specific projects rather than commit
ourselves to an underwriting across the board, of a percentage of the
cost of these plans. Without some such arrangement, there is little
prospect of establishing public responsibility for performance. With-
out some such arrangement, it will be impossible to make clear at
home or abroad what we are committed to do and, equally what we
are not committed to do.
Further, our specific commitments under the Alliance should be
conditional on the commitments of the Latin American governments
themselves and to some extent on those of other participants in any
situation. The conditions should be known in this country and in
Latin America. We should be prepared to stay clear of or to with-
draw from situations where these conditions are not being met. Once
these circumstances of effective and responsible action have been
established, however, we should be prepared to act generously, with a
minimum of redtape and with great vigor in terms of our own
commitment.
The present bureaucratic structure under which military and non-
military aid are administered continues to be attuned to aid in the old
pattern in Latin America. This structure requires substantial change
if it is to provide effective support to the Alliance for Progress. Under
ambiguous objectives of promoting internal stability and economic
development, the administrative structure of the aid programs has
tended to spread in almost identical patterns into nation after nation.
This extension of the bureaucratic process overseas tends to generate
its own pressures for ever-increasing commitments which are then
incorporated into policy and act to impel it to flow in certain channels.
In short, the instruments of policy tend to become the determinants of
policy and the tail wags the dog.
It is entirely possible that a thorough study of the strategic realities
of hemispheric defense will indicate that many of the military missions
in Latin America have tended to come into being by the process of
bureaucratic extension. If so, there should be no hesitancy in curtail-
ing this process and withdrawing these missions:wherever possible.





LATIN AMERICA AND UNITED STATES POLICIES


Residual functions could be shifted to the military attaches of the
embassies or transferred back to this country. Not only would public
funds and dollar exchange be saved by this course, but at the same
time the purposes of the Alliance for Progress might well be facilitated.
In a similar fashion, nonmilitary AID missions of the type which
now function in Latin America will clearly require change if the
vague objectives of promoting internal stability and development
are redefined in terms of specific responsibilities for specific projects
under the Alliance. Moreover, the creation of the Peace Corps and
the Food for Peace programs, the establishment of the Inter-American
Bank, the availability of other inter-American and international
agencies, and the potential of a significant contribution of skills and
other resources from some Latin American nations to their neighbors,
as well as the flow of aid and investment from nations outside this
hemisphere, all suggest the desirability of a drastic redesign of the
present AID missions in Latin America.
We must face up to the enormous duplication of sources of help
for Latin America which already exist. These are not yet used in
any integrated pattern. We can ill afford to waste either the funds
or the talents that are involved in this duplication. Moreover, it
is likely that more sources of aid will continue to be piled on top of
existing sources and, beyond great cost, there will be such cumber-
someness, confusion, rivalry, and redtape that effective followthrough
under the Alliance for Progress will become next to impossible.
A shakedown of agencies and reordering of functions is clearly
needed. It is entirely possible that the best approach will be to limit
the permanent overseas aid establishment in Latin America to a
single development agent of the highest caliber in each embassy. A
single agent, under the direct supervision of the Ambassador, without
attachment to any operating agency, would be in a most effective
position to advise the Ambassador and, hence, the Secretary of State
and the President on what sources of assistance are needed in any
given situation and how these sources might be most efficiently
blended in the discharge of our specific responsibilities under the
Alliance.
An arrangement of this kind might result in a better use of our own
bureaucracy. It might also help in mobilizing the participation of
the many inter-American and international agencies which can be
encouraged to play a much larger role in Latin America than is now
the case. It might help, further, to insure a maximum flow of skills
which are in surplus in some Latin American nations into areas of
need in the region and to encourage an imput of capital and aid from
Western Europe and elsewhere.
Apart from bringing the aid programs and their administration into
line with the Alliance for Progress, other actions pertaining to inter-
American relations suggest themselves, actions which might strengthen
and advance our interests in this hemisphere. Some steps have al-
ready been taken, for example, to clarify the lines of authority in
Washington with respect to Latin American policies. The influence
of the ambassadors has been strengthened and new ambassadors of
broad background have been assigned to Latin America. There has
also been a marked improvement in the language capacities and other
skills of younger Foreign Service officers as a result of better training
programs which have been made possible by past congressional ac-





14 LATIN AMERICA AND UNITED STATES POLICIES

tions. The embassies, however, still tend to operate largely on the
basis of the inertia of past policies and on inadequate firsthand
contact with whole situations. Associations of embassy officials are
largely confined to the cities, to other U.S. nationals, and to a rela-
tively small group of Latin Americans. Certainly, it would appear
desirable to encourage considerable on-the-ground travel, particularly
by younger Foreign Service officers at the outset of an assignment.
In this and in other ways the acuteness of observation and the accu-
racy of interpretation might be increased.
Every reasonable support, including adequate funds, should be
given by the Senate to improvements of this kind in the Foreign
Service. For it is largely on the depth of understanding and percep-
tion of the younger officers of the embassies that our policies will
depend in Latin America during the years ahead. In the end, their
performance will have much to do with determining whether we
understand the situation thoroughly and whether or not we follow the
best course to safeguard the interests of this Nation.
The virtue of any massive propaganda campaign in Latin America
must be questioned. As already noted there is a point of diminishing
returns in words, whether over the airwaves or in printed form.
To be sure, there is a need for carefully conceived information
programs which explain and publicize the policies and purposes of
this Nation, which tell the truth without undignified embellishments,
which make clear not only what we are doing but what we are not
doing and have no intention of doing. But words endlessly propa-
gated, in the end, will not determine the course of Latin America's
future, whether the words come from us or the Russians. In the
end, that course will be determined by the Latin American people
on the basis of what is of enduring value to them.
Exchanges of persons which are sometimes linked to information
programs are, in reality, in a different category. These are concerned
with deepening understanding both ways in the hemisphere, over the
long range. The Fulbright and similar programs are of great value
in inter-American relations and efforts should be made to strengthen
them and to diversify them. One variant which seems to be worthy
of encouragement is the expansion of the sister-university concept,
as between our universities and universities in Latin America.
There are also substantial opportunities for an expansion of medical
and other scientific and technical exchange among the American
Republics on a highly selective basis and in both directions. Our
own professions would have much to gain from this expansion as
would those of the Latin American nations and, again, every practicable
encouragement should be given to such exchanges.
With respect to inter-American trade, it is of the utmost importance
that this interest not be neglected in connection with the impending
trade legislation and our interest in the European Common Market
and other trade groupings, two of which, incidentally, are developing
in Latin America. We should study, deeply, in concert with Latin
America and, it would seem desirable, with Canada as well, the impli-
cations of these trading trends. This subject would be worthy of.
consideration by the impending meetings of both the Mexican-United
States and the Canadian-United States Parliamentary Groups. As
a matter of official policy, moreover, this Government would be well
advised to consult with the Latin American nations in advance of





LATIN AMERICA AND UNITED STATES POLICIES 15

major decisions in connection with the European trade groupings
which may affect their interests. Indeed, the possibilities and perhaps
even the necessity of developing an inter-American approach to the
European Common Market and other trade groupings should not be
overlooked.
With regard to such key commodities as copper, lead, zinc, cotton,
and others which encounter perennial difficulties in the world market,
a common hemispheric approach might be explored in an effort to
evolve more effective international agreements. There is a great need
to provide a measure of stability for producers and workers with, of
course, safeguards for consumers. It is becoming apparent that
without effective international agreements there is little prospect of
alleviating the hardships of those engaged in the production of these
commodities, either in Latin America or in the United States.
Some of our most immediate difficulties in Latin America are asso-
ciated with our interest in investment in that region. Every reason-
able protection should be given to U.S. industries which are seeking
fair conditions under which to operate in that region. Every appro-
priate help should be given to these industries which are trying to
increase their.acceptability in Latin America through "self-nationali-
zation."
However, in the light of the continuing opposition to U.S. invest-
ment, in the light of the decline in our dollar exchange reserves, it is
doubtful that special inducements should be offered to capital to flow
to Latin America at this time.
In some countries, local ownership and U.S. enterprise appear to
have developed highly effective and mutually satisfactory working
arrangements on the basis of stable conditions of management over
a period of years with adequate recompense for the risks taken. It
might be to the general advantage of our interests in Latin America
if difficulties with particular investments could be reduced through
mutual accommodations of this kind.
An opportunity may exist for a major advance in hemispheric co-
operation in connection with a most important humanitarian endeavor.
For some time now, the Defense Department has been developing and
expanding techniques for air and sea rescue work throughout the
Americas. On a less-organized basis, this Nation has participated
through the aid programs from time to time in relief work in con-
nection with disasters, such as those which have struck Chile and
Peru in recent times.
It would be desirable to explore the possibilities of consolidating
these and related functions in a permanent hemispheric rescue and
relief unit under the Organization of the American States. Such an
organization could stockpile food and other emergency supplies at
strategic points and otherwise plan and prepare in advance for co-
operative and immediate action whenever and wherever disaster
strikes in the Western Hemisphere. An organization of this kind
would not only have the highest practical utility but would be a
symbol of the humanistic potential of hemispheric cooperation.
In the realm of political relations, there may be need for a reassess-
ment of the role of the Organization of the American States. Uni-
lateral intervention by one country in the affairs of another in this
hemisphere was discarded in the era of the good neighbor policy, an
era which marked a major advance in inter-American relations.





16 LATIN AMERICA AND UNITED STATES POLICIES

Nevertheless, we must face the fact that situations arise in particular
states which are adverse to the security of others or are so flagrant in
their trampling of human decency as to outrage the conscience of the
hemisphere. Such a situation existed in the Dominican Republic.
Such a situation prevails in Cuba.
In these or in any similar situation which may arise in the Americas,
we cannot expect identical evaluations from each American nation.
But regardless of differences of views, the important point is that these
situations cannot be ignored as a hemispheric responsibility. The
OAS must be prepared to face them, to debate fully and frankly the
issues that are involved in them and then set a course on the basis of
collective wisdom and carry it through on the basis of collective action.
Unless the organization has this kind of vitality, the American nations
will tend to act individually and ineffectively in matters that are
properly of hemispheric concern and, eventually, the functions of the
OAS are likely to be assumed elsewhere.
We are at a decisive point in inter-American relations. The benefits
which are derived from these relations can be expanded through the
Alliance for Progress and other means. But if the problems of inter-
American relations are allowed to drift or if they are treated with
ineffective remedies, there is a danger of the steady erosion of these
relations. Much depends on what this Nation does under the Alliance
for Progress. But the answers to these problems will not be found in
the Alliance alone. Nor will they be found in our policies alone, no
matter how enlightened they may be. In the last analysis, the future
of inter-American relations will depend on a full appreciation by the
people of the Americas, of the mutual benefits which these relations
bring to the hemisphere and on the sense of responsibility, restraint,
and dedication with which all the American nations act to sustain
and strengthen these relations.





























APPENDIX








17











83d session COMMITTEE PRINT





UNITED STATES TECHNICAL

ASSISTANCE IN HAITI




REPORT

OF

SENATOR MIKE MANSFIELD

ON A STUDY MISSION TO HAITI












JUNE 1954






Printed for the use of the Senate Committee on Foreign Relations


UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1954


81934 0-62---4






20 LATIN AMERICA AND UNITED STATES POLICIES


COMMITTEE ON FOREIGN RELATIONS
ALEXANDER WILEY, Wisconsin, Chairman
H. ALEXANDER SMITH, New Jersey WALTER F. GEORGE, Georgia
BOURKE B. HICKENLOOPER, Iowa THEODORE FRANCIS GREEN, Rhode Island
WILLIAM LANGER, North Dakota J. WILLIAM FULBRIGHT, Arkansas
HOMER FERGUSON, Michigan JOHN J. SPARKMAN, Alabama
WILLIAM F. KNOWLAND, California GUY M. GILLETTE, Iowa
GEORGE D. AIKEN, Vermont HUBERT H. HUMPHREY, Minnesota
HOMER E. CAPEHART, Indiana MIKE MANSFIELD, Montana
FRANCIS O. WILCOX, Chief of Staff
CARL M. MARCY, Consultant
JuLIUs N. CAHN, Counsel
PAT M. HOLT, Consultant
ALWYN V. FREEMAN, Consultant
C. C. O'DAY, ChiefClerk
DORIS CovINGTON, Assistant Clerk





LATIN AMERICA AND UNITED STATES POLICIES


LETTER OF TRANSMITTAL


UNITED STATES SENATE,
COMMITTEE ON FOREIGN RELATIONS,
February 19, 1954.
Hon. ALEXANDER WILEY,
Chairman, Senate Foreign Relations Committee,
United States Senate.
DEAR MR. CHAIRMAN: In response to your request, I am enclosing
for your consideration a report on technical assistance to the Republic
of Haiti.
It is my hope that this report will be of value to the committee in
understanding the problems connected with technical assistance to
Haiti and that our Government will be able to do what it can through
this program to help the Haitians to help themselves in raising their
living and health standards and bettering their economic security.
With best personal wishes, I am,
Sincerely yours,
MIKE MANSFIELD.





22 LATIN AMERICA AND UNITED STATES POLICIES


PREFACE
This study on United States technical assistance to Haiti, which
was prepared by Senator Mansfield at my request, should be helpful to
the Committee on Foreign Relations and to the Senate during their
consideration of the foreign-aid program. It is a case study of the
problems of one of the countries to which we give modest assistance.
It shows how the technical-assistance program helps the people of
Haiti to meet these problems. The study points out the need in Haiti
for foreign private capital to assist in the creation of small industries
to back up its agricultural economy.
It is my hope that other members of the Committee on Foreign
Relations will be able to make similar studies of countries we are
assisting. Such studies serve to check on the United States adminis-
tration of the programs. They also enable members of this committee
to become familiar with the problems with which they must cope in
enacting foreign-aid legislation.
It will be noted from the report that the ratio of Haitian contri-
butions to United States contributions has gradually but consistently
moved upward. Thus, in 1944, Haiti contributed only about $1.50
for each $30 contributed by the United States. For fiscal year 1954,
however, the Haitian Government is to contribute about $8 for every
$6 given by the United States. The intent of the programs is thus
being carried out by increasing the local contributions to programs
which are in the interests of Haiti as well as in the interests of the
United States.
The Haitian people and their Government are to be commended for
their steady advance, thus contributing to the economic and defensive
military strength of this hemisphere.
ALEXANDER WILEY,
Chairman, Senate Committee on Foreign Relations.
JUNE 15, 1954.







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LATIN AMERICA AND UNITED STATES POLICIES


UNITED STATES TECHNICAL ASSISTANCE IN HAITI


1. INTRODUCTION
Haiti is the oldest Latin American Republic, having celebrated on
January 1, 1954, the 150th anniversary of its bitterly won independ-
ence from France. It is a Negro Republic and it is one of the world's
poorest and least developed countries.
Too many people are on too little land-about 3,500,000 in an area
the size of Maryland. Four-fifths of the island is mountainous, much
of it eroded and barren. Within the limits of a $30 million annual
budget, President Paul Eugene Magloire has started programs to
attract tourists, build roads, improve agriculture, and reduce illiteracy
which is extensive.
Both the United Nations Technical Assistance Bureau and the
United States, through point 4, are helping. This country has fos-
tered a technical assistance program for more than 10 years in Latin
America and Haiti shares in the undertaking. It is a cooperative
program in which the United States. and the countries in need of
technical assistance work together, each assuming a share of the
costs involved. Haiti is an excellent example of how the technical
assistance program can help to raise standards of living, create new
sources of wealth, increase productivity, and expand purchasing
power.
Haiti, which has potentially arable land of 2.5 million acres, has only
1 million acres under cultivation. On these acres it produces primarily
coffee, sisal, fiber, sugar, and bananas. It possesses certain valuable
forest resources and probably important mineral resources, as yet
unproved, which include copper, bauxite, and petroleum.
The important immediate needs of the island are for modern prac-
tices in agriculture, the extension of irrigation, and greater utilization
of land. Land rehabilitation and increased food production are
probably more necessary in Haiti than in any other independent
American Republic.
Extreme pressure of population has already stripped the steep
mountain slopes of most of their forest cover. The use of so much
wood for charcoal and uncontrolled burning and overgrazing have
further aggravated the serious soil-erosion problem.
Lack of adequately trained Haitian technicians, impoverished soil,
poor roads, inadequate transportation, lack of marketing and proc-
essing facilities, lack of proper land surveys and registration of titles,
and high agricultural credit rates tend to keep small farmers in con-
stant poverty. Lack of opportunities for vocational training and
common school education are great handicaps as the Nation strives
for a more efficient health program for the people. The prevalence
of tuberculosis, malaria, yaws, parasitic infections, malnutrition, and
anemia constitute major health problems. The lack of an adequate
program of preventive medicine, shortage of water, the absence of





LATIN AMERICA AND UNITED STATES POLICIES


basic sanitary facilities and the poverty of the people complicate
the difficulties.
In cooperation with the United States Institute of Inter-American
Affairs, an instrument of the point 4 program, the Haitians have been
making progress against some of the toughest and most complex
problems on earth.
The Institute of Inter-American Affairs began its program of
cooperative technical assistance in the basic fields of health and
sanitation, agriculture and education, in cooperation with Latin
American countries on March 31, 1942.
In the fiscal year 1952 significant changes were made in the Insti-
tute's activities and in the organization of the Institute itself. The
Act of International Development in 1950 and the Mutual Security
Act of 1951 centralized technical assistance for Latin America in the
Technical Cooperation Administration (Department of State) within
the framework of the Mutual Security program. Direct appropria-
tions to the Institute were discontinued after 1951. The Institute's
funds for 1952 consisted of a grant-in-aid from TCA made from the
appropriations for the Mutual Security program.
During the early years of technical aid to Haiti the United States
provided the larger portion of funds for the projects. As a comparison
shows, the Haitian contributions have steadily grown until now they
contribute approximately 60 percent of the funds for this program.
These figures do not apply to any other independent agencies operating
in the country. After 1951 they apply only to the Institute of Inter-
American Affairs, point 4, and the Mutual Security Agency.

2. CONTRIBUTIONS TO TECHNICAL AID IN HAITI

1944 1948 1951 1953
United States---...........--------.. ------- -------- $300,637 $463,343 $469,065 $598, 900
Haiti----.......... ------ ..------------------------- 16,666 316,892 644,903 895,400

The proposed United States contribution for the fiscal year 1954
is $943,900 and the Haitian contribution is estimated at $1,029,000.
During the 1953 fiscal year there were 30 technicians employed by the
United States, the proposed number for 1954 is 52. Most of the
budget increase is in agriculture, with a smaller increase allowed in
health. A new technical assistance program is in process of being
planned for rural education and one technician in public administra-
tion is helping improve the Haitian customs service.

3. AGRICULTURE AND NATURAL RESOURCES
Since Haiti has one of the heaviest population pressures on agri-
culture in the Western Hemisphere, improvement in this field is the
most important activity of the technical aid program. Projects are
of two different types: Extension education in improved farm practices
and better methods of utilizing existing resources and the develop-
ment of additional land resources through irrigation.
The 30 Haitian extension agents working with the American staff
do not permit full countrywide coverage, so extension work has been
concentrated around irrigation projects. Through farm visits, meet-





LATIN AMERICA AND UNITED STATES POLICIES


ings, and demonstrations farmers have been assisted in becoming
more productive by being taught how to seed and plant and to improve
the quality of their vegetables. Work has continued in spreading the
use of improved varieties of field crops and vegetables, in teaching
irrigation methods, in 4-H work, in helping eradicate insect pests,
rodents, and plant diseases, in soil conservation, and even in teaching
a few farmers the use of the plow.
One of the most important results during the past year has been the
progress made in helping farmers organize study clubs and the start
they have made through these clubs in analyzing their own problems.
Another significant development was the initiation of a home-econom-
ics program during the past year. Six home-economics extension
agents, all of them Haitians who work with our American home econ-
omist, are now at work in the field helping farm families with home-
making and community problems, including nutrition, cooking, cloth-
ing, health, gardening, home management, and 4-H Club work.
In order to relieve the population pressure, additional land resources
are being developed by putting old irrigation systems back into use
and building new ones. Such projects are in operation at St. Raphael,
Torbeck, Fonds Parisien, Camp Perrin, and Cavaillon which will
eventually'add about 16,500 additional acres to the land in production.
The pilot irrigation project developed in the Artibonite Valley has
resulted in a real start being made this year on construction work
which is designed to irrigate 74,000 acres in this valley as well as to
develop power. We are now providing technical assistance in the
agricultural development of the whole valley. Although the full
results of the irrigation projects are not yet apparent, new crops of
irrigated rice have added to the nation's food supply. A few wells
were drilled during the year to provide underground water for irriga-
tion and domestic use.
In addition to continuing its experimental work in developing a
supply of high-yielding, disease-free seed stock, the Marfranc Rubber
Station, located near Jeremie, also carried on extension work with
farmers on rubber production and furnished technical assistance to
SHADA (Societe Haitiano Am6ricaine de Development Agricole)
which has approximately 200,000 rubber tress that have reached the
stage of production.
The forestry technician recently assigned to the Pine Forest of
SHADA has given advice on the marking of trees for cutting, the
preferable areas for selective cutting, improved logging practices and
lumber-marketing information. He was responsible for SHADA's
entering into an agreement with a private construction company to
purchase approximately 120,000 board feet of short-length lumber
which had heretofore been wasted.
4.. HEALTH
In the field of health, the technical-aid program initially made its
principal contribution in reducing yaws and is now broadening its
attack to include other diseases. It is the long-range objective of
this cooperative undertaking to assist in the development of a country-
wide health program. The work has no doubt already relieved con-
siderable suffering and has improved the productivity of the labor
force to some extent. Through reducing the death rate slightly, it
may also have increased the rate of population growth.
81934 0-62-5





28 LATIN AMERICA AND UNITED STATES POLICIES

Progress has been made in converting from a program restricted
largely to the treatment of yaws to a general health program which
provides facilities for preventive as well as curative medicine and for
sanitation measures. A health center was completed at Mierbalais,
which has clinical facilities for the treatment of various communicable
diseases. In all, during the first year of operation some 33,392 clinic
visits were made by 16,785 patients coming from more than 50 towns.
A domestic water-supply system was finished and placed in opera-
tion in the town of Croix-des-Bouquets. This village of 1,500 persons,
which grows to around 7,000 on market days, contributed approxi-
mately one-third of the cost of the project. Water-supply projects were
initiated in Ouanaminthe, Terrier Rouge, and Corail. At the end of
the year arrangements will be made for the establishment of a public-
health nursing program in connection with the rural health-center
operations. Continued assistance has been given to the National
School of Nursing. Work in assisting the Haitian Government with
vital statistics was begun toward the end of last year.

5. EDUCATION, PUBLIC ADMINISTRATION, HOUSING
A cooperative rural-education program is now being established.
If this actually can be worked it should be the most significant aspect
of this year's activity since the difficulty at the root of many of the
most serious problems in Haiti is the lack of education. Most of the
population is illiterate not only in the sense of not knowing how to
read and write, but also in the sense of not understanding economic
development. Many have participated in a money economy for only a
short time.
Another improvement resulting in part from United States assist-
ance affects the customs service. The examination and control of
passenger baggage is already proceeding on a more realistic basis.
A housing technician is being recruited whose problem will be to
help the Haitian farmer construct a better house at less cost and with
a minimum use of scarce materials. Rural houses and other buildings
in Haiti are now made with a crude wattle and daub technique that
was brought from Africa in colonial times.
The program developed for fiscal year 1955 will continue to operate
in agriculture, health, education, aid to customs, and housing. There
should be an expansion of special assistance to the Artibonite project
where a small increase in the number of technicians is necessary if
our responsibilities are to be carried out. American officials in Haiti
envisage a broadening of the program in fiscal year 1955 if requested
by the Haitian Government to include certain new functions, such
as more careful planning of projects, improving public administration,
giving technical advice on farm-to-market roads, and helping stimu-
late industrial development and private investment.
Although it is of the utmost importance to bring about a better
balance in the economy through industrial development, at the same
time that agriculture is being made more efficient, it will take con-
siderable work before we can be of much help in this field. Ameri-
can officials expect, however, that eventually a start can be made in
the small agricultural processing industries. Haitians especially need
assistance with production and marketing problems in sisal, mahog-
any, oils, and other commodities. There are a great many difficulties






LATIN AMERICA AND UNITED STATES POLICIES


in the way of the development of small manufacturing industries in
Haiti, but there is hope that a start can be made in this field in fiscal
year 1955 if the Haitian Government requests such cooperation.

6. ARTIBONITE PROJECT
The successful pilot irrigation project that the technical aid pro-
gram developed a few years ago in the Artibonite Valley has almost
started a chain reaction. The Haitian officials have become enthusi-
astic about developing the entire valley, the possibility of which has
been debated for 200 years. The Haitian Government voted $8 mil-
lion and induced'our Export-Import Bank to approve a loan of $14
million. Haiti now intends to go ahead with the full development of
the project on which it has already pledged itself over a period of a
few years to spend the equivalent of more than 1 full year's income,
a sum far greater in relation to the resources of Haiti than that spent
by most other countries for economic development. Within the last
6 months operations have gotten underway in building dams, access
roads, and major canals. The early stages of the work are planned
to tie in land preparation and drainage with the construction activ-
ities of the dams, so that some new irrigable land can be put into early
production and start yielding income while the rest of the project is
being finished.
The prospective market for cement opened up by the proposed dam
construction probably was one important factor in Haiti's getting a
new industry, a much needed cement factory. This factory, as well
as job opportunities in the dam and canal construction work, increased
the purchasing power of hundreds of people which in turn stimulated
business. The purchase of materials, both in Haiti and in the United
States, helped business in both countries. The eventual development
of power at the big dam will relieve one of the present bottlenecks in
industrial development and contribute greatly to the success of the
project.
This accomplishment in stimulating Haiti's economy and trade
with the United States was to a large extent, the result of the preap-
plication of technical assistance rather than as a direct consequence
of the encouragement of trade and investment. It illustrated the
potentially widespread effect of technical assistance as applied
through the "servicio." The approach is more than simply technical
assistance. It involves the expenditure by the "servicio" of grant
funds contributed by both governments to help assure that the work
of the.technicians will be effective

7. UNITED NATIONS PROGRAM
Contributions in the way of technical assistance in the fields of
health and agriculture are also being made in Haiti by the United
Nations and the specialized agencies of that organization.
The Food and Agriculture Organization of the United Nations is
operating in the agricultural and natural resources field, having
specialists in forestry, soil erosion, fish farming, and animal husbandry.
Other United Nations' technicians are engaged in such activities
as furnishing fiscal advice to the National Bank, conducting a school
for hotel employees, organizing cooperatives, developing rural indus-





LATIN AMERICA AND UNITED STATES POLICIES


tries and giving advice on economic and financial statistics. The
International Labor Office of the United Nations will assist in the
local training of garage mechanics, electricians, artisans for the
building industry, and help in the development of cottage industries
using such materials as leather and fibers.
UNESCO has had a project in fundamental education for adults and
is considering the possibility of going into the field of rural education.
If they do enter this field the United States will change its plans since
it is the declared policy of the mission not to duplicate work carried
on by the U. N. groups.
8. CONCLUSION
Under President Magloire, Haiti has achieved, for the time being at
least, the political stability indispensable to economic and social de-
velopment. The pace forward may be excruciatingly slow but it is
in the right direction.
President Magloire emphasizes that Haiti is not seeking charity.
He would like foreign capital to establish small industrial plants as
a buttress for what is essentially an agricultural economy. To attract
foreign capital, the Haitian Government passed a law reducing taxes
and eliminating certain duties on new industries. The lack of response
from foreign private capital has built up a suspicion that, as the Presi-
dent put it, the United States "is not interested in helping us to
industrialize."
This suspicion is held by many Haitians and, observers believe, it
may well be the wedge used eventually by the Communists to try to
gain entry here. They have made no serious effort yet, perhaps
because Haiti is a land of small farms-too small in the opinion of most
experts-and the Communists cannot use land reform as a rallying
cry.
Our technical assistance program is faced with many difficulties
in Haiti. Presumably if there were no such difficulties, we would not
be in Haiti. But the need for the program is great and the people
generally seem to appreciate this fact, particularly the thousands of
families who are cooperating in our programs. There is reason for
optimism about the opportunity for future accomplishment when one
becomes acquainted with the Haitian people. Most of them are very
cooperative, very industrious and very eager to learn. They have,
moreover, as a President, an able and energetic executive who com-
prehends the problems of economic progress and is eager to tackle
them.













REPORT BY SENATOR MANSFIELD ON U.S. TECHNICAL
ASSISTANCE PROGRAMS IN MEXICO AND CENTRAL
AMERICA 1
MEXICO
The technical assistance program in Mexico which has increased in
size from $765,000 in 1953 to some $1.8 million in 1956, is in need of
careful attention. In an area of critical importance to the United
States, it is doubtful if the program as presently operated serves the
interests of either this country or Mexico as well as it should.
The fault does not lie with the officers engaged in administration of
the program who exhibit ability and understanding. Rather, it grows
out of an apparent failure at the governmental level to reach certain
basic understandings essential to the success of the program at the
operating level.
If technical assistance in Mexico is to serve the national interest of
the United States, it must be based on a mutuality of interests as
between the two Governments concerned, and those Governments
must recognize that mutuality of interest. In other words, it is
.doubtful if the technical assistance program in Mexico is worth con-
tinuing unless the policymaking officials of both nations agree that
each nation will reap benefits from the program.
There was little evidence that such officials of the United States
are giving their wholehearted support to the technical assistance pro-
gram in Mexico. Likewise, there was little evidence that their counter-
parts in the Mexican Government are particularly interested in the
program. As a result, the day-to-day operating people on the Ameri-
can and Mexican sides must carry on in a somewhat sub rosa fashion.
If the technical assistance program in Mexico is worth doing, it is
worth doing well. The time has come for officials of both Govern-
ments at the ministerial level to reach a clear understanding whether
it is in the mutual interests of the United States and Mexico to con-
tinue the program. If it is agreed that the program should be con-
tinued, as I believe, then it must receive the wholehearted support of
officials of both Governments at all levels.

THE NATIONAL INTERESTS OF THE UNITED STATES AND MEXICO
It is my belief that a limited technical assistance program is in the
mutual interests of the United States and Mexico.
So far as the United States is concerned, a Mexico with a higher
standard of living and a larger national income would be a better
customer for the United States. By the same token, Mexico would
find this country a better customer for its products. Moreover, from
the point of view of the United States it is not desirable for the dis-
parity of standards of living as between the two countries to become
1 Source: S. Rept. 139, Technical assistance, final report of the Committee on Foreign Relations, Mar. 12
1957, pp. 505-514.





32 LATIN AMERICA AND UNITED STATES POLICIES

greater. Rather, the gap should be narrowed so that the material
and cultural wealth of the Americas can be put to the joint job of
expanding the area of man's individual freedom and of contributing
to his spiritual strength.
The technical assistance program to be in the national interests of
the United States and Mexico cannot be a one-way street. Mexican
art and architecture, rooted in the Mexican civilizations of the past,
can make immeasurable contributions to the life and culture of the
United States. Similarly, U.S. techniques in some agricultural and
industrial areas can make substantial contributions to the Republic
of Mexico.
Technical assistance can contribute not only to improvement of
living standards in Mexico and consequent expansion of trade between
the two countries, but it can help bring the peoples of these nations
more closely together. As the bonds of friendship are strengthened
it may be expected that on the international stage the Mexican
Government will better understand the policies and attitudes of the
United States. The same would be true with respect to U.S. under-
standing of her great neighbor to the south.
There are many factors in the Mexican situation which make the
operation of a technical assistance program most difficult.
In the first place, Mexico is not an underdeveloped country in the
usual sense. She has engineers, doctors, architects, scientists,
educators, industrialists, and other professional people among the
most able in the world. Her mineral resources are in the process of
development.
Under these circumstances, it is but natural that there is resentment
in some circles in Mexico at "gringo" meddling. There is no question
but that in time Mexico would be able to engineer her own economic
development without outside assistance. Nevertheless, Mexico does
need more trained mechanics; better agricultural production; and in
general, assistance in the development of a middle class. The main
contribution the United States might make to this development
would be to expedite the process already underway.
A second difficulty encountered in operating a technical assistance
program in Mexico stems from the strong nationalism of her people.
Some of this nationalism, for understandable reasons, expresses
itself in terms of anti-Americanism. Our size tends to dominate
Mexico. Moreover, there have been occasions in the past, including
the Texas declaration of independence in 1836 and the subsequent
war with the United States, the landings of marines in Vera Cruz, the
disputes arising out of the changing nature of the boundary'between
the United States, and the occasional exploitation of Mexican laborers
in the United States, which have fanned anti-American sentiment.
Suspicion of the United States is such that it has been said that no
friend of the United States could ever be elected President of Mexico.
Indeed, the present President, Adolfo Ruiz Cortines, who was elected
in 1952 was severely handicapped during the election campaign
because it was charged that he had been on the payroll of the United
States during the Vera Cruz incident.
This nationalism is indicated by the reaction of a high-ranking
Mexican official to U.S. assistance which was given during recent floods
at Tampico. He commented that a press release issued by the Ameri-
can authorities had not mentioned that certain of the relief activities





LATIN AMERICA AND UNITED STATES POLICIES 33

had "been carried on in collaboration with" the Mexican authorities.
This omission, he felt, reflected on the efforts of the Mexicans to help
themselves.
Strong nationalism, a characteristic of every proud people, including
ourselves, is not to be regretted. But nationalism must be under-
stood and worked with. This means that the tendency of some
American officials, not in Mexico in particular but also elsewhere, to
couch the technical assistance program solely in terms of gifts of supe-
rior technical knowledge, must be avoided. Nationalism, insofar as
it may operate to impede a technical assistance program, can best be
dealt with by making it clear that our aid programs are undertaken
because of their mutual value to both participants. This assistance
is not an activity carried on by the United States for charity purposes.
The program rather has been undertaken because we believe these
expenditures in foreign countries serve to promote the general welfare
and interests of the United States. We cannot expect Mexico, or any
other country, to participate wholeheartedly in such programs unless
they believe the programs are also in their national interest.
A third factor which impedes the successful operation of the tech-
nical assistance program is attributable to the activities of the Com-
munist underground in Mexico. Although the Communist Party is
recognized as legal, it has not registered as a party for purposes of
participating in elections Nevertheless, there is little doubt but that
there has been some Communist penetration in governmental and
educational circles. Furthermore, the Soviet Embassy in Mexico
has been a source of considerable Communist propaganda throughout
Latin America.
While communism does not pose an immediate threat to Mexico
and while the government is firmly dedicated to the principles of
democracy, there is evidence that Communist elements in Mexico
seek to pervert nationalism into anti-Americanism. They have
sought also to brand the technical assistance program as 20th century
American imperialism. To some extent they have been successful in
equating technical assistance with imperialism, thereby inducing
some Mexicans to make a mistake similar to that made by some
Americans who have equated the liberalism of the Mexican Govern-
ment with communism.
The greatest difficulty in carrying on the technical assistance pro-
gram, however, is not attributable to the nature of the country, to
nationalism, or to communism. The greatest difficulty arises, as
indicated earlier, in the failure of the two Governments candidly to
explore the area in which their joint national interests might be ad-
vanced by a technical assistance program. This will be a stumbling
block to future technical assistance programs in Mexico, as it has
been to past programs-several of which have literally withered
away because of the lack of interest of responsible officials in both
countries.
CONCLUSION
It is beyond the province of this report to try to tell either the
executive branch of the U.S. Government, or the Government of
Mexico how to operate the technical assistance program in Mexico.
Observation of the program for the few days available did not provide
a sound background or basis for submitting detailed recommenda-





34 LATIN AMERICA AND UNITED STATES POLICIES

tions. It was possible during this period, nevertheless, to determine
with some degree of confidence that the program as presently operated
does not serve either the interests of the United States or of Mexico as
fully as would be possible if both countries were wholehearted in their
support of the program.
It is suggested, therefore, that the U.S. Government at the minis-
terial level should find an opportunity in the near future to make a
straightforward statement to the Government of Mexico to the effect
that the United States believes that it is in our national interest, as
well as in the national interest of Mexico, to carry on a limited techni-
cal assistance program for the purpose of reducing the disparity in
economic conditions which now exists, to the end that trade and mutual
understanding be increased. Should it be possible to reach a clear
agreement on the basis of such a mutuality of interest, present diffi-
culties at the operating level should be mitigated, assistance would be
far more effective than it is at present, and mutual pride and publicity
might be given to the joint efforts of these two North American
neighbors.
Should Mexico believe that the technical assistance program is not
in her national interest, there should be no recriminations from the
United States. As has been indicated earlier in this report, Mexico
may be expected in time, and on her own, to get the same results,
albeit they may be delayed more than might be the case were she to
participate in the technical assistance program.
GUATEMALA
The economic and technical assistance program in Guatemala offers
a unique contrast to the program in Mexico. While the technical as-
sistance programs in the two countries are of approximately the same
dollar value ($1.8 million for 1956), Guatemala has a population of
about 3 million in contrast to the 23 million population of Mexico.
Furthermore, the 1956 program for Guatemala has, in addition to the
technical assistance program, an additional $15 million in economic
development assistance. Thus, the per capital U.S. assistance pro-
gram in Mexico is about 8 cents per person whereas the assistance
program in Guatemala is slightly more than $5 per person. Put in
another way, U.S. assistance in 1956 to Guatemala on a per person
basis will be some 60 times greater than that to be received by Mexico.
A second contrast is in the attitudes with which the Mexican and
Guatemalan Governments view the program. As indicated hereto-
fore, the Mexican Government tolerates the program and views its
accomplishments with reserve. The Guatemalan Government, how-
ever, desires assistance and recognizes the mutual advantages flowing
from it.
The large-scale program for Guatemala is justified on the basis of
special needs growing out of the recent revolution which replaced the
Communist regime of Arbenz.
During the last few years of the Arbenz regime, governmental
expenditures exceeded receipts and at the time President Castillo
Armas took over the government, the public debt stood at the figure
of $47 million. Furthermore, substantial sums of native capital had
fled the country, commercial enterprises of foreign origin were virtually
at a standstill, and a once lucrative tourist trade had been almost






LATIN AMERICA AND UNITED STATES POLICIES


destroyed. American assistance during the Arbenz regime had
dwindled virtually to a holding operation. The program for 1954,
for example, was less than $200,000.
Under these circumstances, it was essential that if the new regime
were to have a sound economic basis upon which to seek to establish
the basic elements of a democracy, urgent internal reforms were
needed and outside assistance required.
President Castillo Armas has made a beginning in bringing about
changes in those governmental controls and practices which had run
Guatemala into political and economic bankruptcy. Certain tax
reforms are being undertaken; private properties expropriated under
the Arbenz regime are being returned; and other steps are being taken
which should attract investment funds to Guatemala and encourage
the return of flight capital. Armas has obtained an $18.2 million
loan from the International Bank.
It has been just a little over a year since Armas assumed the office
of President. During the first months of the new regime the United
States came to the aid of Guatemala on an emergency basis. Some
$3.7 million was given to Guatemala in December 1954. Of this
amount $3.2 million was for highway construction, and $500,000 for
work on the Roosevelt Hospital in Guatemala City. In addition,
100 technicians were brought to the United States for a short training
course. By the end of fiscal year 1955 slightly more than $6.5 million
of U.S. assistance had been given.
The assistance program for the current fiscal year calls for a tech-
nical assistance program in the amount of $1.8 million and for develop-
ment assistance in the amount of $15 million. It is anticipated that
the technical assistance program will continue to be of almost the
same size for some years in the future. The development assistance
program, however, is short term and is expected to be reduced some-
what next year.
The development assistance funds will be devoted to road con-
struction ($10.8 million), to rural development ($2.4), to housing
($0.9 million), to agricultural development, and to the Roosevelt
Hospital.
Technical assistance funds in the amount of $1.8 million are sched-
uled as follows:
Agriculture and natural resources-------------------------------- $655, 000
Industry and mining ....------.. ..------------------------ 74, 000
Transportation_ _------------- ------------------------------- 142, 000
Labor-------------------------------------------------------- 20,000
Health and sanitation------------------------------------------ 393, 000
Education --------------------------------------------------- 349, 000
Public administration ------------------------------------------ 51, 000
Housing-------------------------------------------------- -- 79,000
Technical support--------------------------------------------- 67,000

CONCLUSION
After the years when U.S. assistance to Guatemala was at a virtual
standstill, our aid program is now moving into high gear. For 1956,
Guatemala will receive more in U.S. assistance than all of the other
Central American Republics together.
The danger in giving such substantial assistance on a "crash
program" basis is that money may be squandered on questionable
projects or be diverted in other ways.





36 LATIN AMERICA AND UNITED STATES POLICIES

The U.S. mission to Guatemala is aware of these dangers. It is
establishing accounting procedures in the mission and arranging for
accounting checks on field projects. It is scrutinizing most carefully
requests for project funds.
The success of the program in Guatemala will be measured not only
by the integrity of the administration of the program by American and
Guatemalan officials, but by two additional factors.
In the first place, the success of the program will be measured by
whether in a relatively short period of time a stable, democratic
governmental regime can produce economic progress and an increased
standard of living. This increased standard must be in excess of
that which might have been achieved under the Arbenz regime.
In the second place, the success of the program will be demonstrated
by the withdrawal of large-scale American assistance as soon as the
Guatemalan Government has repaired the ravages of the Arbenz
regime, thus demonstrating .again-as we have done elsewhere-that
American assistance is given not for reasons of economic or political
control, but rather to assist nations in maintaining their independence.
A successful aid program in Guatemala characterized by helping
the Guatemalan people get on their feet economically and politically
so that they may be independent of all foreign domination-including
that of the United States-would be a solid demonstration of the fact
that U.S. assistance is not designed to lead to domination. It would
establish, by example, the fact that our assistance to Latin America
would be terminated as it was in Europe as soon as the mutual aims
of the participating countries are well on their way toward achieve-
ment.
EL SALVADOR
Although I was personally unable to visit the International Cooper-
ation Mission in El Salvador, a member of the staff of the Committee
on Foreign Relations undertook that assignment on my behalf and
under my direction. On the basis of his report and on information
received from other sources, the comments which follow are submitted
with the thought that they may serve to draw the attention of Amer-
ican officials in El Salvador and in Washington to some of the problems
that deserve attention.
The technical assistance program in El Salvador authorized for the
current fiscal year is in the vicinity of $1 million, nearly twice as large
as the program in 1954. It is contemplated that the program will
increase slightly next year and then may begin to level off.
Because of great disparities of wealth with an extremely low stand-
ard of living for most Salvadorans, a technical assistance program
is badly needed. The Salvadoran Government desires assistance
and appreciates that which it is receiving, although there has been
press criticism to the effect that paper is the biggest product of the
program.
Assistance has been concentrated in the usual fields of health and
sanitation (since 1942), education, industry, and mining, labor, public
administration, and agriculture, with the heaviest concentration of
American technicians being in the field of agriculture. Out of some
37 officers directly on the ICA payroll, one third are engaged in some
aspect of agriculture. Steps have been taken during the past year
to increase the scope of industrial technical assistance by the estab-





LATIN AMERICA AND UNITED STATES POLICIES 37

ishment of an industrial productivity center which makes engineering
advice available to interested governmental agencies and private
concerns.
COMMENTS
1. Examination of the program in El Salvador indicates that there
may be some tendency to lose sight of the relationship of particular
projects to the foreign policy interests of the United States. The
ICA mission in El Salvador seems to be the tail that wags the dog.
As of July 1955, there were 8 officers in the Embassy, including the
Ambassador, and 37 officers in the ICA mission. This was in marked
contrast to the situation as of the same date in Guatemala, with 15
officers in the Embassy and 24 officers in the ICA mission, and to the
situation in Mexico with 51 officers in the Embassy and 30 in the
ICA, Mexico. The technical assistance programs of the three
countries are roughly of the same dollar magnitude, although the
program in El Salvador is the smallest.
While it is realized that numbers do not tell the whole story, these
figures suggest from the viewpoint of manpower alone that the political
side of the U.S. mission in El Salvador cannot be expected to have the
same knowledge of the technical assistance operation as would be the
case were the officer ratio between the Embassy proper and the ICA
mission less substantial.
The political overtones of the 'technical assistance program can be
very marked in a country the size of El Salvador. For that reason
it is essential that the American Ambassador keep in close touch with
the program so that his approval of projects may be more than a
rubber stamp indication that they serve to promote the foreign policy
interests of the United States. The transfer of technical assistance
functions to the Department of State should facilitate the close inte-
gration of technical assistance to foreign policy in the field as well as
in Washington.
2. The apparent lack of close relationships between foreign policy
considerations and specific technical assistance projects in El Salvador
has had a tendency to permit the technical assistance program to
become involved in projects of peripheral foreign policy concern, or
of a type which might be carried on in other ways.
Thus, commendable though a project to assist El Salvador in the
development of her fisheries industry may be, the present confused
state of the territorial waters question in Central America is such that
there may be adverse foreign policy implications to carrying on such
a program at the present time. Again, valuable as it may be to de-
velop new coffee varieties for El Salvador, the principal beneficiaries
of such a development would be large coffee producers whose profits
are sufficient to enable them to meet the costs of a substantial research
program of their own.
It would be presumptive on the basis of the short survey made of
these illustrative projects in El Salvador to recommend their discon-
tinuation. It is suggested, however, that projects of this type should
be examined most closely to see if they serve best the foreign policy
interests of the United States, and if they are of the type which should
be carried on with the use of Government funds.
3. There is evidence that insufficient attention has been given in
the Salvadoran program to the need for fixing termination dates for





38 LATIN AMERICA AND UNITED STATES POLICIES

projects. In deciding whether the United States should commit
funds to a project, attention must be given to putting it on its own
feet as rapidly as possible and thereafter the program should continue
when U.S. technical assistance is withdrawn.
The needs of a country such as El Salvador are virtually inexhaust-
ible. Technical assistance can help a country get started by helping
to train technical specialists of its own in sanitation, health, education,
engineering, etc. Technical assistance must not create dependence;
it must create independence.
The advantage of trying to fix a terminal date for specific projects
is to point up the fact that the main job of technicians in the point 4
program is to work themselves out of a job by training a local or
national group to carry on the program that has been started.
It is believed that U.S. officials in Salvador and their counterparts
in that Government might well give more attention to this aspect of
technical assistance. Technical assistance from the United States
must not be viewed by the recipient nations as a matter of right. A
gradual decrease in the amount of U.S. technical assistance to any
particular project should be viewed as normal and should not require
public relations justification.









85th Congress
1st Session J


COMMITTEE PRINT


MEXICO





REPORT

OF

SENATOR MIKE MANSFIELD

ON A


STUDY MISSION













NOVEMBER 17, 1957


Printed for the use of the Senate Committee on Foreign Relations


UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1957


61934 0-62---6





LATIN AMERICA AND UNITED STATES POLICIES


COMMITTEE ON FOREIGN RELATIONS
THEODORE FRANCIS GREEN, Rhode Island, Chairman
J. W. FULBRIGHT, Arkansas ALEXANDER WILEY, Wisconsin
JOHN SPARKMAN, Alabama H. ALEXANDER SMITH, New Jersey
HUBERT H. HUMPHREY, Minnesota BO JRKE B. HICKENLOOPER, Iowa
MIKE MANSFIELD, Montana WILLIAM LANGER, North Dakota
WAYNE MORSE, Oregon WILLIAM F. KNOWLAND, California
RUSSELL B. LONG, Louisiana GE 3RGE D. AIKEN, Vermont
JOHN F. KENNEDY, Massachusetts HOMER E. CAPEHART, Indiana
CARL M. MARCY, Ch ef of Staff
0. C. O'DAY, Clerk



















I





LATIN AMERICA AND UNITED STATES POLICIES


LETTER OF TRANSMITTAL


NOVEMBER 1, 1957.
Hon. THEODORE FRANCIS GREEN,
Chairman, Committee on Foreign Relations,
United States Senate, Washington, D. C.
DEAR SENATOR GREEN: I am submitting herewith a report on a
study trip to Mexico which I made in September of this year.
In doing so I welcome the opportunity to express my deep and
personal appreciation to all those who contributed to make my visit
a successful one, particularly Ambassador Robert C. Hill and the
personnel of the American Embassy in Mexico City. We are indeed
fortunate to have such an outstanding group representing the United
States in a sister Republic.
Sincerely yours,
MIKE MANSFIELD.






LATIN AMERICA AND UNITED STATES POLICIES






















CONTENTS


Letter of transmittal--------------------------------------
1. Introductory--------------------------------------------------
2. Technical cooperation-------------------------------------------
3. The corn drought and Public Law 480 assistance -------------------
4. Mexican labor relations -----------------------------------------
5. Soviet activity in Mexico-------------------------...-------.
6. The braceros question-------------------------------------------
7. Recommendations for future action ..--..--.-----------........ --
8. Conclusions -------------------------------------------------


Page
41
43
44
45
45
46
47
47
49






LATIN AMERICA AND UNITED STATES POLICIES 43






MEXICO


1. INTRODUCTORY
In a report prepared after a study mission to Mexico which I under-
took in 1955, I called attention to some of the principal deficiencies of
our technical assistance program south of the border and to the diffi-
culties which had to be overcome if that program were to serve the
mutual interests of Mexico and the United States.
One of the purposes of the present report will be to develop briefly
the major developments which have taken place in the 2 years which
have elapsed since my previous trip with respect to this and other
aspects of Mexican-American relations. After commenting briefly
on some of the implications of these developments, I shall offer a few
suggestions as to courses of action which might be pursued in order
to cement further our relations with the people of Mexico.
In the earlier report I suggested that, if even a limited technical
assistance program were to be maintained, it was, above all, essential
for the two governments to reach a common understanding as to the
areas in which technical assistance was not only needed but honestly
desired. If this were not possible, continuation of the program could
not, I believed, be justified on grounds of mutual self-interest.
These impressions were reinforced on my last trip to Mexico. I
found little evidence that responsible officials in both the United States
and Mexico share any particular enthusiasm or even interest in con-
tinuation of the program as a whole. It has substantially deteriorated,
having little impact outside of Mexico City; and such impact as it
has is accompanied with certain adverse side effects which can hardly
be said to have improved amicable relations between our two countries.
For this reason and in view of the resistance which United States
technical cooperation has encountered (with one possible exception
discussed below), I believe that serious reflection should be given to
the termination of the program at an early date. The causes (or
explanation) of this resistance, linked in part, as it is, with Mexican
national pride and a deep spirit of sovereign independence, need not
detain us.
To suggest termination, moreover, is not prompted merely by the
desire to effect economies in the expenditure of public funds by elim-
inating an unproductive effort. Instead, it should be acknowledged
that a variety of factors have combined to render the program highly
dubious. Any decision as to its final liquidation should depend in
large part upon the findings of our Mexico City embassy, as the office
best equipped to appraise the effectiveness of technical cooperation
between the two countries on the government level.
The current status of the technical assistance program in Mexico is
discussed below in more detail.





LATIN AMiERICA AND UNITED STATES POLICIES


2. TECHNICAL COOPERATION
Probably the most distinctive feature of United States technical
cooperation south of the border is the substantial number of projects
which have been discontinued either because of lack of support or
failure to reach agreement with Mexican officials on the matter of
implementation.
Cooperation programs, by late 1955, had been initiated in the fields
of agriculture, health and sanitation, education, industrial produc-
tivity and research, transportation, mining, geology, and training.
Area development programs were in the planning stage.
In February of 1956 the Mexican Government notified the United
States that all the area development projects, as well as the agriculture
program, were to be discontinued. Other projects which were
dropped, after efforts to complete them proved fruitless, were the
programs in education, industrial research, and health and sanitation
(an activity which the Mexicans have now taken over entirely on
their own).
Substantially greater interest has been manifested by the Mexicans
in the industrial productivity program which was initiated 2 years
ago. An Industrial Productivity Center was created by the Com-
bined Industry Chambers to centralize work in this field. Its Board
of Directors includes such organizations as the Bankers Association,
the National Confederation of Chambers of Commerce, the Mexican
Employers Association, and two of the leading labor organizations
(CTM and CROM). ICA provides approximately $50,000 for the
operating budgets of the Center, an equal amount being contributed
from Mexican sources both public and private. The Mexican con-
tribution will be increased during fiscal year 1958, to permit further
expansion of the program.
The objectives of the program include, among other things, imple-
mentation of efficient management and production techniques in
Mexico, to achieve a higher rate of production with corresponding
benefits to labor and consumer groups. Technical help has been given
to such industries as cotton textiles, shoes, tanneries, fruit and vege-
table preservation, and readymade garments. Some 18 productivity
teams have visited the United States. ICA has projected $269,400 for
this activity for fiscal 1958, an increase'of some $45,000 over the 1955
program.
ICA has also provided a permanent technician and several short-
term training consultants for the El Olivar transportation training
center. The United States contributed $50,000 for the purchase of
equipment and supplies, and in 1957 provided $100,000 to be deposited
to a joint fund for the organization and equipping of a number of
training road camps. A greatly reduced contribution ($16,000) is
planned by ICA for fiscal 1958.
In view of the nature of the training center, which has the full sup-
port of the Ministry of Communications and Public Works, and which
is financed almost entirely from Mexican funds, the continued partici-
pation of the United States, even on a modest basis, would not seem
to be warranted.






LATIN AMERICA AND UNITED STATES POLICIES


The cost of other United States technical cooperation projects in
Mexico, from 1955 to date, appears in the following table:
[In United States dollars]
Fiscal ycar Geology Mining Central Labor Vocational
banking training rehabilitation
1955 -----. ---------- -- ----... $133,500 $34,100 0 $53,000 ..---
1956 .. ...-------------. ..-.... 84,000 22,000 $1,000 88,100 -
1957 .--------~.-----.... --- 59,000 34,500 34,200 122,600 .--
1958 (proposed)- ..---....--...- 37,000 46, 000 47, 000 110,000 $29, 000

As already indicated in this report, there is serious question whether
United States technical cooperation in Mexico should be continued,
with the possible exception of the industrial productivity program, in
view of the previous record.
This is not to ignore that some extremely important benefits have
accrued from cooperative efforts during the postwar years in certain
matters. An example is the eradication of hoof-and-mouth disease.
Within 5 years from the institution of a joint vaccination program in
1947, under which 17 million animals were treated, the Mexican
cattle industry was freed from the contagious affliction which had
compelled the United States to quarantine cattle shipments from
Mexico.

3. THE CORN DROUGHT AND PUBLIC LAW 480 ASSISTANCE
The destruction of Mexico's principal food source, corn, due to
this year's drought, could have caused a considerable drain of Mexico's
exchange reserves to pay for the large quantities which had to be
imported. However, on October 23, 1957, an agreement was con-
cluded between the United States and Mexico for a Public Law 480
loan, for the sale of 500,000 metric tons of corn to Mexico, involving
a total of $28,500,000. In addition to this, Mexico has purchased
approximately 200,000 metric tons under long-term loan provisions,
through the Commodity Credit Corporation.
No further Public Law 480 sales are contemplated at this time, as
it is believed that the transactions already completed will satisfy
Mexican requirements. In this crisis, again, the utility of Public Law
480 procedures have once again been demonstrated.

4. MEXICAN LABOR RELATIONS
In no phase of its recent history has Mexico exhibited greater
advancement and maturity than in the area of labor relations. This
factor has been of particular significance in the progress which has
taken place south of the border. Despite problems of inflation and
the monetary devaluation which took place in 1954, Mexico has had
very few strikes in the past 6 years; and the labor movement, although
militant, has shown increasing responsibility in its relations with
employers.
The Mexican labor movement is well organized, comprising six
major labor federations. Of these the most important are the Mexican
Confederation of Labor (CTM), with a membership of approximately
1% million; and the Federation of Federal Workers (FSTSE), consist-





LATIN AMERICA AND UNITED STATES POLICIES


ing of some 300,000 members. A Labor Unity Bloc was formed in
1953, representing and coordinating the activities of about 90 percent
of the Mexican labor movement.
During a stormy period from 1937 to 1941, Mexican labor was
dominated by the fiery Vicente Lombardo Toledano, whose long and
ardent adherence to Communist doctrine was manifested in policies
followed by the CTM. Since 1952 undisputed direction of the CTM
has been in the hands of Fidel VelAzquez who had assumed leadership
jointly with Fernando Amilpa in 1941. Between 1941 and 1947
Velazquez succeeded in eliminating Lombardo Toledano's influence
and followers, finally breaking with him completely when the CTM
pulled out of the Communist-controlled World Federation of Trade
Unions in 1948, and its Latin American counterpart, the CTAL.
Today the CTM is one of the firm pillars of the Regional Inter-
American Labor Organization (ORIT), the Western Hemisphere
branch of the democratic, anti-Communist International Confedera-
tion of Free Trade Unions. The CTM maintains a close and coopera-
tive relationship with the AFL-CIO. This provides an important
vehicle for cultivating greater friendliness throughout a broad range
of interests between our two countries, and for developing an under-
standing of the problems faced by our working people.
A strong and independent labor movement is of paramount impor-
tance in combating the inroads of communism. This responsibility
has been accepted by Mexico's Labor Unity Bloc, which has an anti-
Communist committee to prevent Communist penetration into labor's
ranks. Its action has been very effective, and today, with some
exceptions, the labor movement in Mexico is anti-Communist.

5. SOVIET ACTIVITY IN MEXICO
Continued vigilance is required, however, to meet the unrelenting
efforts of the Soviet Union to spread propaganda hostile to the United
States.
Mexico is one of three nations in Latin America which maintain
diplomatic relations with Moscow (the other two being Uruguay and
Argentina). The existing interests between the two governments
hardly justify the disproportionate size of the Soviet Embassy, which
has 19 officials named on the diplomatic list, and which is estimated as
staffed by 112 persons. The subversive objectives which this activity
reflects should not be lightly dismissed.
The Republic of Mexico has always ranked high as a target of Soviet
intrigue. Although emphasis has been on cultural relations, this
activity does not explain the presence of many staff members with
military backgrounds, or the contacts engaged in by known Soviet
agents. Extensive propaganda units of an anti-American character
have been established in Mexico under the guise of economic study
groups. These units serve as instruments to create a facade of public
opinion on matters of vital concern to the United States and other
nations of the free world.
Soviet operations in Mexico are complemented by a Czechoslovak
mission, whose activities along commercial and cultural lines permit
wide travel and study of the area. The opportunities so presented
in areas remote from tighter metropolitan surveillance are obvious.
Moreover, the Soviets have not been loath to play upon latent sus-





LATIN AMERICA AND UNITED STATES POLICIES


picions and mistrust to fan the flames of hostility against the Yanqui
colossus.
Here, too, security considerations during this critical period would
seem to justify closer collaboration between the United States and
Mexico in a common defense against Communist penetration of the
Western Hemisphere.

6. THE BRACEROS QUESTION
One further aspect of Mexican-American labor relations deserves
mention. This is the problem of braceros, or migratory workers,
and illegally entered laborers (so-called wetbackss"). Essentially
the problem arises because of the inability of Mexican agriculture
and industry to absorb local labor, which finds the higher wages paid
in the United States too strong an attraction to resist. Although
Mexicans generally feel somewhat unhappy at the necessity for their
workers to seek employment in the United States, bracero remittances
in the past have been a rather important source of foreign exchange.
The disadvantage, according to some economists, is that skilled workers,
of which Mexico is already short in supply, often do not return from
the United States. But, on the whole, the net effect of braceroism
has been to produce warm feelings on the part of the workers for the
United States.
Because hundreds of thousands of these Mexican workers have been
entering the United States illegally in recent years (over 1 million in
1954), the traffic provoked a flood of protest from labor organizations in
this country. It was contended that the presence of braceros tended
to displace American workers and to depress wages; whereas, on the
other hand, as a fugitive, the migratory laborer had no recourse to our
laws for enforcement of minimum wage and other requirements.
Both governments saw the need for replacing the uncontrolled
worker traffic by some kind of an orderly system, and entered into an
agreement in August 1951 concerning the contracting of Mexican
farmworkers. The agreement, which has been extended to June 30,
1959, provides protection for the Mexican worker in wages, working
conditions, and fair treatment; but it also prohibits the hiring of
Mexicans in case of strikes or lockouts, as well as for any jobs for which
American workers were available. Despite the agreement, thousands
of Mexican workers continued to cross the border illegally, although
there has been an increase in the amount of contracted labor.
It does not appear, therefore, that Government action has solved
the problem by any means, and new controversies continue to arise.
The latest difficulty relates to the Mexican desire for including non-
occupational insurance coverage in the program. Negotiations on
this issue have been ineffectual thus far.

7. RECOMMENDATIONS FOR FUTURE ACTION
It is, of course, true that the future of technological and scientific
collaboration with Mexico is not something which can be divorced
from the larger problem of developing a more harmonious association
between the peoples of the two countries.
During my latest visit to America's closest southern neighbor I
sought to ascertain what lines of action might be followed to advance





48 LATIN AMERICA AND UNITED STATES POLICIES

still further the friendship and mutual esteem which, happily, have
become more evident in American-Mexican relations. It is too
sanguine to expect that the harsh memories, suspicions, and appre-
hensions generated in an earlier day can be erased overnight. Yet,
to accomplish this result should be given a high priority in our policy.
It will take determined patience and effort on both sides. And it
will require a sustained manifestation of American sincerity in per-
suading our Mexican friends that their national progress, economic
advancement, and the welfare of their peoples are very much in the
interest of their northern neighbor. The United States already
enjoys a gratifying degree of good will among the Mexican people,
with what must be regarded as a minimum of distrust in view of the
recriminating atmosphere of the 19th century.
In my opinion, the destinies of Mexico and the United States-
indeed, of all of the nations of the Western Hemisphere-have become
inextricably linked as a consequence of the surging forces in inter-
national life during the past few decades. To such a degree is this
true that there should be a frank and open recognition of the inter-
dependence of the two Republics. I am convinced that the mutual
respect which prevails will be accompanied by steadily increased
cooperation in all matters of common concern.
I believe there is much we can do to advance the objective of better
relations. My recent trip to Mexico has convinced me that the United
States is neglecting several courses of action which could substantially
contribute to greater understanding between the two countries.
In the first place, we should radically expand our educational
exchange program to stimulate a much broader interchange with
Mexico of students, professors, technicians, and scientists. Few
neighbors in the world have as much to offer each other as the United
States and Mexico; and in few areas can this understanding be more
appealing and more rewarding. An intensified exchange program
would encourage harmonious relations between our respective peoples
on a level which is most essential to an understanding of their problems
and their aspirations; while the social milieu of the exchanges will also
be enriched by such contacts.
It is hardly necessary to observe that Mexico has much to offer to
American visitors of an artistic, sociological, and archeological nature.
Conversely, there are many ways which American experience can
benefit Mexico in areas where our own culture has made especial
progress. I know of few better means to efface whatever bitterness
and resentment may still be entertained toward the United States in
Mexico than by close collaboration of our peoples in fields of common
professional and cultural interest.
This exchange of educational and professional personnel should be
further broadened so as to institute a regular system of interchange
between the service academies of the two governments. The natural
feelings of friendliness and good will resulting from such exchange
would thereby be supplemented by an indoctrination in the strategic,
tactical, and logistic problems of each country and familiarization
with training methods best suited to meet them.
The hitherto limited extent of United States-Mexican participation
in athletic and cultural programs should likewise be expanded. Ar-
rangements could be made, for example, for participation in sporting
activities popular in both countries. A tradition of such activity





LATIN AMERICA AND UNITED STATES POLICIES


would produce much good will and fellowship, as it has in American
university life.
On the political level, consideration should be given to the estab-
lishment of a North American Parliamentary Union, which could
also include Canada. Periodic meetings of delegates to the Union
would provide a common forum for these countries' representatives
to become better acquainted, and to become more aware of factors
which underlie national legislative policies whose overtones too fre-
quently have a most disturbing effect across the border.
At the same time, efforts should be made, in collaboration with
Mexico, to find the solution to a number of problems which have
produced irritation in the past. As one example, an agreement should
be reached with Mexico as quickly as feasible on the thorny problem
of jurisdiction in territorial waters, with particular reference to shrimp
and other fishery resources.
It is to the interest of the United States to pursue this course.
To a very great degree, Mexico has come to represent the cornerstone
of our long-range relations with the rest of Latin America. Yet,
because of its very proximity, we have perhaps tended to take Mexico
for granted, failing to recognize its importance to us, to perceive how
far it has advanced, or to appreciate what Mexico can be in knitting
the nations of the Western Hemisphere into that closer unity which
may prove vital to the preservation of freedom in the Americas.

8. CONCLUSIONS
The transformation in Mexico since 1940 has been nothing short
of phenomenal. From a strike-plagued and insecure society wracked
with recurrent labor unrest which destroyed the confidence of private
investors and threatened the existence of the entire Mexican economy,
has emerged a mature, solid, and highly respected member of the
family of nations. Mexico today is a stable, progressive society, and
a leader in inter-American affairs. Its development has leaped
forward, with advances in industry and in the welfare of its people
that would not have been believed possible 20 years ago.
What is even more encouraging has been the gradual appearance
in Mexico-at least in the metropolitan areas-of a middle class.
American private investment has contributed in no small way to
this important development as well as to Mexico's increased produc-
tive capacity by fostering and financing local sources of manufac-
turing and distribution, which, in turn, is opening internal markets
within Mexico for low-cost merchandise. Investment capital from
abroad now enters Mexico with assurance of fair treatment. Similar
encouragement has been given by the Mexicans to developing foreign
travel. The tourism program, an important basis of dollar exchange
for this fascinating country, is being pushed with marked success.
The stream of American tourists flowing southward represented last
year an income source of $279 million.
Numerous internal problems remain, however; and serious differ-
ences still exist between the United States and Mexico on several
matters, some of which have been long-standing. These problems
are not insoluble, but they will yield only to prompt and courageous
leadership and a determined effort by both our peoples. The oppor-





50 LATIN AMERICA AND UNITED STATES POLICIES

tunities of such leadership and effort are the privilege and responsi-
bility of free and independent nations.
The United States and Mexico have it within their power to eradi-
cate the festering memories of a former unhappy association by
building a new and more enduring foundation for cooperation in a
spirit of equality, mutuality, and respect. This can be achieved by
working out a more satisfactory pattern of equal relationships in the
fields of trade, military defense, and culture. The revolutionary
technological changes in modern warfare now taking place make it all
the more imperative that the defense of their common border be
regarded by the two governments as a matter of mutual concern.
The cultivation of continued peaceful and cooperative relations with
the neighbor on our southern flank is not, therefore, merely something
to be desired: It is vital to our national security.
In a world in which totalitarianism relentlessly seeks to proliferate
its way into national freedom, no nation can pretend to suffice unto
itself, aloof and alone, its future survival jeopardized by smoldering
antagonisms and suspicions of the past.








85th Congresse
1st Session I


COMMITTEE PRINT


TECHNICAL COOPERATION IN THE ANDES
COUNTRIES OF SOUTH AMERICA





REPORT
OF

SENATOR MIKE MANSFIELD
AND

SENATOR BOURKE B. HICKENLOOPER
ON THE
TECHNICAL COOPERATION PROGRAMS
IN PERU, BOLIVIA, AND ECUADOR
Pursuant to S. Res. 162, 84th Cong.









MARCH 1957


Printed for the use of the Senate Committee on Foreign Relations


UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1957







LATIN AMERICA AND UNITED STATES POLICIES


COMMITTEE ON FOREIGN RELATIONS
THEODORE FRANCIS GREEN, Rhode Island, Chairman
J. W. FULBRIGHT, Arkansas ALEXANDER WILEY, Wisconsin
JOHN J. SPARKMAN, Alabama H. ALEXANDER SMITH, New Jersey
HUBERT H. HUMPHREY, Minnesota BOURKE B. HICKENLOOPER, Iowa
MIKE MANSFIELD, Montana WILLIAM LANGER, North Dakota
WAYNE MORSE, Oregon WILLIAM F. KNOWLAND, California
RUSSELL B. LONG, Louisiana GEORGE D. AIKEN, Vermont
JOHN F. KENNEDY, Massachusetts HOMER E. CAPEHART, Indiana
CARL MARCY, Chief of Staff
C. C. O'DAY, Clerk



SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS
[Created pursuant to S. Res. 214, 83d Cong., S. Res. 36, S. Res. 133, S. Res. 162, 84th Cong.,
S. Res. 60 and S. Res. 99, 85th Cong.]
MIKE MANSFIELD, Montana, Chairman
THEODORE FRANCIS GREEN, Rhode Island BOURKE B. HICKENLOOPER, Iowa
J. W. FULBRIGHT, Arkansas GEORGE D. AIKEN, Vermont
JOHN F. KENNEDY, Massachusetts I HOMER E. CAPEHART, Indiana-
BARRY GOLDWATER, Arizona
PAT M. HOLT, Staff Director
FRANCIS R. VALEO, CsonUtlant 3

I Appointed by the Vice President to serve with the subcommittee.
2 On loan from the Legislative Reference Service, Library of Congress.





LATIN AMERICA AND UNITED STATES POLICIES


LETTER OF TRANSMITTAL

MARCH 1, 1957.
DEAR MR. CHAIRMAN:
As members of the special Subcommittee on the Technical Assist-
ance Programs we visited South America during the month of Decem-
ber 1956 in connection with the inquiry of the special Subcommittee
on Technical Assistance Programs. Although we traveled separately,
the accompanying report reflects our combined observations and con-
clusions. It covers United States technical cooperation programs in
certain of the Andes countries, notably Peru, Ecuador, and Bolivia.
These countries afford an unusual opportunity to study the pro-
grams. In the first place, the need for technical cooperation is con-
siderable and obvious. Further, the present programs are sufficiently
limited in extent to permit a grasp of their fundamentals during a short
visit. Finally, these programs have been in operation for a compara-
tively long period of time (in some cases for 15 years) so that extensive
experience with their functioning has accumulated.
As this report discloses, we found that the technical cooperation
programs are operating effectively in the Andes countries. They are
making a significant contribution to the welfare of the people of Peru,
Bolivia, and Ecuador. They are also advancing the economic and
other interests of the United States. They are, in short, mutually
advantageous programs pursued at relatively small cost to this coun-
try, as compared with other types of overseas activities.
We should like to take this opportunity to thank the Ambassadors
of the United States in the three countries, Gerald A. Drew (Bolivia),
Theodore C. Achilles and counselor of Embassy, Clare H. Timberlake
(Peru), and Christian M. Ravndal (Ecuador) and their capable staffs,
the directors and staffs of the United States Operations Mission and
the Department of Defense for their cooperation in making arrange-
ments and otherwise assisting us in carrying out this mission. We
especially want to commend Mr. Francis R. Valeo, consultant to the
committee, for his outstanding work and his much appreciated assist-
ance and counsel in connection with the survey.
Sincerely,
MIKE AMANSFIELD.
BOURKE B. IIICKENLOOPER.





54 LATIN AMERICA AND UNITED STATES POLICIES


CONTENTS


Page
Letter of transmittal -------------------------------------------- 53
I. Introductory---------------------------------------------- 55
Nature of technical cooperation---------------------------- 55
Objectives of technical cooperation ------------------------- 55
Effectiveness of technical cooperation in the Andes countries -- 55
Returns to the United States -----------------------------. 56
II. Setting for the technical cooperation programs-------------------- 57
Geographic and social factors---------------------------.--- 57
Political setting --------------------------..... ---------- 58
Natural resources for development---..---------------------- 59
Agricultural resources ------------------------------------ 60
Foreign trade---------.-------..-----------------------. 60
The role of technical cooperation in development.------------- 60
III. The technical cooperation programs in the Andes countries--------- 61
Origins ----------------------------------------------- 61
The servicios------------------------------------------ 61
Cost of technical cooperation ----------------------------- 62
Military aid--------------------------------------------- 63
Export-Import and International Bank loans----------------- 63
Other programs in the Andes countries----------------------- 64
Operation of a typical technical cooperation program-Peru--. 64
The results----------------------------------------------- 65
IV. Concluding comments and recommendations--------------------- 66
1. Improvement in coordination of the United States technical
cooperation and other aid programs -------------------- 66
2. Transfer of control of projects developed under the program.- 67
3. Interchange in the Andes countries----------------------- 67
4. Improvement in the exchange program-------------------- 67
5. Increasing the "mutuality" of the program---------------- 67
6. Technical cooperation in public administration------------- 68





LATIN AMERICA AND UNITED STATES POLICIES


TECHNICAL COOPERATION IN THE ANDES
COUNTRIES OF SOUTH AMERICA
I. INTRODUCTORY
'Nature of technical cooperation
The function of technical cooperation is to transmit abroad scien-
tific knowledge and skills which may be useful to other peoples in
developing their societies along modern lines. This function is set
forth in the legislation providing for the program.
Perhaps it is easiest to make clear what technical cooperation is or
should be, by pointing out what it is not. As defined by Congress,
the program does not involve in any substantial degree the transfer
of cash, commodities, or equipment to other nations. It has no
direct connection with the building of military strength abroad. It
does not include large-scale loans or grants for the economic develop-
ment of other nations.
Objectives of technical cooperation
The technical cooperation program of the United States Govern-
ment has humanitarian aspects which are not unlike the overseas
activities of some religious organizations and private institutions.
It can act to improve general living conditions elsewhere by demon-
strating modern methods in health, education, and other fields and
by providing education and guidance in their application.
The program also has objectives of national interest. Through
technical cooperation scientific information in many fields can be
obtained abroad which is of direct benefit to research and develop-
ment in this country. Further, by stimulating progress elsewhere,
technical cooperation opens up new opportunities for commerce and
investment from which the citizens of the United States as well as
other countries may profit. Finally, it should be noted that the pro-
gram, properly administered, can undergird all our relations with
others with an element of friendly personal contact of durable value to
this country.
Effectiveness of technical cooperation in the Andes countries
The technical cooperation programs in Peru, Bolivia, and Ecuador
in general are undertakings of the kind described above. These pro-
grams are yielding constructive results in terms of benefits to the
peoples of the Andes countries and in terms of returns to the United
States.
In a survey such as we made, the contributions of technical coop-
eration to the localities directly affected are readily apparent. Specific
projects can be seen which act to improve health and sanitation
standards, to reduce illiteracy and to increase production. There is
no question, for example, that certain jungle areas of Peru once
virtually uninhabitable are now being opened up to productive use
because of the pioneering achievements of the United States and





LATIN AMERICA AND UNITED STATES POLICIES


Peruvian technicians working together to eliminate malaria and other
diseases. There is no question that program-trained Latin Americans
are playing a significant part in extending modern agricultural services
in all of the Andes countries. There is no question that illiteracy is
being reduced in these countries and that technical cooperation is an
important factor in this progress.
Examples of this type could be multiplied and it would be easy to
reach the superficial conclusion that technical cooperation is a kind of
miracle drug for the accumulated social and economic ills of centuries.
It is, of course, nothing of the kind. Modern progress in the Andes
countries, as elsewhere, stems from a complex of causes. It proceeds
at different rates, determined largely by the nature of each country's
physical and human resources, by historic lags, and by existing polit-
ical, economic, and social circumstances. Most of all, it derives from
the degree of determination of the peoples directly involved to develop
their country and the effectiveness of their indigenous leadership for
that purpose.
There is no question that Peru, Ecuador, and Bolivia are all in the
midst of significant change at the present time. In varying degrees
they have registered a remarkable advance during the past few years.
The technical cooperation program has been a factor in the advance
and this contribution should not be overlooked. By the same token,
however, it should not be overestimated.
Returns to the United States
What of the returns to the United States from technical cooperation
ini the Andes countries? It is possible to note specific advantages
which derive directly from the program. When United States agri-
cultural scientists, for example, obtain important data from their
Peruvian colleagues on wheat and corn genetics as they have, it is
clearly a gain for our agricultural experimentation. When a muni-
cipal government installs a new system of water meters on advice of
our program specialists and the meters are purchased from United
States firms that, too, would be a clear and direct return. When
production of minerals and other commodities in short supply in this
country is increased in the Andes region as a result of the program,
the benefit to our economy is readily apparent.
Less obvious, however, is the impact of technical cooperation on
our total commerce with the Andes countries. Their trade with the
rest of the world has undergone a great expansion since the end of
World War II and the share of the United States in that trade has
increased sharply since the prewar years. In the case of Peru, for
example, we supply today 55 percent of that country's imports
whereas prior to the war the figure was in the neighborhood of 30
percent. Part of the increase is explicable in terms of new channels
of trade developed in consequence of World War II and to other
causes. Nevertheless, there appears to be little doubt that the
technical cooperation program has played a part in laying the ground-
work for an expansion of these commercial relations.
Even less tangible are sentiments of friendship which are generated
bv the technical cooperation programs and which have a salutary
effect on all our relations with the Andes countries. Goodwill, of
course, cannot be bought by the simple and costly expedient of
increasing foreign aid expenditures. On the other hand, it would be





LATIN AMERICA AND UNITED STATES POLICIES


wrong to assume that aid provided by the United States in establishing
a public health center in an Eduadoran city or in eliminating malaria
in the Bolivian lowlands produces animosity toward this country.
On the contrary, if such undertakings are pursued with professional
dedication and without undue fanfare there is every reason to believe
that they do result in friendly feelings toward the United States.
In this connection, we wish to stress again the danger of miscalculat-
ing the role of technical cooperation. We repeat that it is not a pan-
.acea. The general tone of our relations with other countries-the
Andes countries are no exception--comes from the sum of all our con-
tacts with them. Goodwill which might be generated by technical
cooperation can be offset by other aid activities which are ill adapted
to the needs of the local situation. It can be undermined by unpop-
ular diplomatic actions, by ineffective official personnel, by adverse
reactions originating in any of the hundreds of contacts which go to
make up the relations, both official and unofficial, between nations.
The technical cooperation program, in short, does not operate in a
vacuum. We emphasize its limits for purposes of perspective in this
report. Within these limits, it can make and we believe it is making
an outstanding contribution to our relations with the Andes countries.
It is likely to continue to do so for some years to come, provided it
remains within the scope established by Congress and provided its
administration is continually 'and effectively adjusted to changing
circumstances.

II. SETTING FOR THE TECHNICAL COOPERATION PROGRAMS'
In the Andes countries, the technical cooperation programs operate
in one of the least known regions of Latin America. The three
nations covered in this report-Ecuador, Bolivia, and Peru-extend
southward from the Equator in western South America. Together
they cover over a million square miles of territory, almost the equiv-
alent of the area of western Europe. Their combined population is
scarcely 16 million while that of western Europe is above 250 million.
Geographic and social factors
The Andes dominate all three countries. Ranging generally from
north to south, these mountains, which reach heights approaching
25,000 feet, exert powerful influence on the prospects for progress in
the region. They act to divide the social structure of each country
into isolated segments, and tend to make integrated development
exceedingly difficult.
A short plane flight within the boundaries of Peru, Bolivia, or
Ecuador will span a wide range of climatic possibilities from the
tropical to the frigid. The same flight will span three distinct timelags
in social and economic development, all within the boundaries of a
single country: In Peru, for example, the capital, Lima, is scarcely
a decade behind the cities of the United States in the comforts and
services which we regard as the hallmarks of modern progress. In
the villages of the Andes highlands, however, the timelag is in
terms of centuries and among the tribal Indians of the Amazon
regions, millenniums.
A similar pattern is found in all three countries. Each country
possesses a vast and virtually unknown jungle to the east. These





LATIN AMERICA AND UNITED STATES POLICIES


regions are sparsely inhabited, largely by primitive tribal peoples.
Their culture is stone age, with hunting, fishing, arid the most rudi-
mentary agriculture the primary occupations. i The principal, and
for the most part the only form of transportation, is by river on the
upper tributaries of the Amazon.
While some exploitation of the immense forest resources of the
jungle areas has taken place under the aegis of capital and labor
from elsewhere, it has scarcely affected the way of life of the indigenous
inhabitants. Technical cooperation in the jungle regions of the
Andes countries, in short, means literally beginning at the very
beginning.
The great bulk of the population, however, lives not in the jungles
but in the upland valleys and plains at altitudes of roughly 5,000 to
15,000 feet. While the few large cities, including the, capitals,
Quito, Ecuador (9,350), and La Paz, Bolivia (11,909), have substan-
tial European derived populations, the inhabitants of the highlands
are almost all Indian or mixed Indian. They are descendants of the
Incas and other Indians, whose cultures were well developed before
the coming of the Spaniards in the 16th century. Their principal
languages are unrelated to Spanish.
The highlanders live in isolated mountain communities, largely by
subsistence agriculture and pasturing. They are also engaged in crafts
of various kinds, and they supply labor for the tin and other extractive
industries.
As noted, the Indians and mixed Indian inhabitants of the highlands
constitute the vast majority in the three countries. It isto them that
the principal efforts of the technical cooperation programs are directed.
Most of them still live under standards of health, diet, and'education,
and use productive technologies which are centuries behind those of
the modern world.
By contrast, the principal cities of the three countries, and especially
those of Peru and Ecuador, are not unlike those of Europe. As already
noted, Lima is an example. It is a modern city in every sense of the
word, with problems of "development" comparable to those of urban
areas elsewhere in the world, including the United States. They
involve such familiar matters as traffic congestion, slum blight, and
inadequate water supply. These are problems, we might note, in
which our need for "technical assistance" is probably at least as great
as' our capacity to extend it.
Until recently, the principal cities have been isolated from the
rest of the region. The isolation has been partly geographic, but even
more important it has been a cultural isolation. To a large extent,
the cities still remain islands of Spanish-derived cultures with a
European-North American outlook in the midst of a little known and,
heretofore, little regarded sea of Indian life.
Political setting
Since the expulsion of Spanish authority in the early 19th century,
Bolivia, Peru, and Ecuador have had constitutional governments
modeled after that of the United States. Despite the forms of
democracy, however, the vast majority of the people have had little
voice in the affairs of government until recent times. They have been
saddled with a succession of military dictatorships alternating with
revolutionary governments. In this constant shuffling of political





LATIN AMERICA AND UNITED STATES POLICIES


power, their needs and interests were largely ignored or suppressed.
There.are now signs that the vicious cycle may be coming to an end.
All these nations appear to be in the midst of. a significant political
transition. The impetus for the change stems primarily from the
extension of nationalism outward from the cities where it has long
prevailed to the Indian-inhabited highlands-in short, from the few
to the many. At the same time, there is a spreading awareness among
the inhabitants of the. latter areas of the potentialities of modern
material progress and a growing restlessness with their present
poverty-stricken existence.
On the whole, these are promising developments. As in all major
transitions, however, the dangers of extremism are not lacking. Both
totalitarian communism and an indigenous racialism are latent factors
in the situation. In combination, they could act to touch off a fire of
'violence in the Andean highlands which would not stop at national
boundaries. A development of this kind is not likely, however, if the
free institutions which now exist are broadened and strengthened to
the point where they will be adequate for dealing with the social and
economic problems of the vast majority of the people of the three
countries.
In this connection, it is not without significance that the Govern-
ments'of Peru, Ecuador, and Bolivia all changed:hands during 1956,
not in the usual pattern of dictatorship-revolution, but in consequence
of orderly elections. These elections may well reflect not only a grow-
ing stability in their political affairs, but also an increased responsive-
ness o'r the part of political leaders to national needs rather than the
interests of powerful pressure groups. ,
If that is the case, it opens up possibilities for more rapid progress
and for a more effective utilization of technical cooperation. As
already noted, these programs do not operate in isolation. It is not
enough that the United States be willing to help in development. Nor
is it enough that peoples are determined on development in the
modern sense. There must also be indigenous leadership which desires
to translate the help and the determination into constructive action.
There are reasons to believe that in the Andes countries the necessary
leadership is coming into being.
Natural resources for development
Once such a leadership is firmly established, the natural potential-
ities of the Andes countries for development are very great. Mention
has already been made of the jungle regions with their important forest
resources which have scarcely been touched.
Valuable mineral resources are also present. These resources have
been of great significance ever since the early Spanish quest for gold
and silver. They are destined to become even more so in the present
era. That is because the Andesp countries contain not only gold and
silver but tin, copper, petroleum, coal, iron, possibly uranium, and in-
numerable other scarce minerals essential to modern industry. Con-
siderable local and foreign capital is already invested in the develop-
ment of these resources. While much of the latter comes from the
United States, certain of the European countries and Japan have also
evinced an interest, particularly in petroleum and iron ores.





60 LATIN AMERICA AND UNITED STATES POLICIES

Agricultural resources
As already noted, the bulk of the inhabitants in the Andes countries
live by subsistence farming. There is also, however, an important
segment of agriculture given over to a plantation type production of
such crops as coffee, sugar, bananas, and cacao for the world markets.
All three countries have extensive cultivable land which is either
not in production or not yielding anywhere near full potentialities.
Agricultural specialists believe, for example, that a large part of the
farmland of Peru is capable of producing 3 to 5 times its present
output and a comparable situation probably exists in the other
countries. It is an ironic fact that the Andes countries which are
predominantly agricultural are deficient in foodstuffs to the extent
of near famine in parts of Peru and Bolivia. This situation is partly
explicable in terms of prolonged drought and inadequate transporta-
tion. In its deeper implications, however, it is a reflection of an
ineffective organization and use of available resources which has
persisted for a long time.
Foreign trade
The three countries have a substantial foreign trade. Ecuadorian
exports and imports,. for example, each total about $100 million
annually. This trade depends heavily on the export of a very small
number of primary products. In'Ecuador the key commodities are
bananas and cacao. In Bolivia, the sale of tin and other minerals
makes up 95 percent of the foreign exchange income.
This high degree of specialization has its economic advantages but
it is not without drawbacks. It accounts in part for the neglect of
rural agricultural areas with the consequent growth of cultural dis-
unity between the cities and the other parts of the country. Except
for the relative few who are directly or indirectly associated with the
export trade, specialization has failed to produce tolerable levels of
living for the peoples of these nations.
On any scale of economic development the Andes countries would
fall far below Western Europe, and not much above the Far East.
In Peru, for example, the average per capital income is probably about
$100 per year. And for the great majority of the inhabitants it is
much lower.
In pointing out these matters we are not suggesting that specializa-
tion for export is undesirable. On the contrary the production of
commodities readily marketable abroad should be intensified since it
provides vitally needed foreign exchange. We are suggesting, how-
ever, that it needs to be supplemented by the development of other
sources of productivity in all three countries.
The role of technical cooperation in development
The basic problem of development for each of the Andes countries
is to convert a far greater proportion of potential wealth into more
fruitful levels of living for their citizens. This report is not the place
to catalog the specific actions which are essential to bring about
further progress in this conversion. They are largely actions which
only the citizens and governments of the countries themselves can
take. Insofar as they involve areas in which technical cooperation
can be of help, however, they have to do with the modernization of
agriculture and fisheries, the extension of basic techniques of public





LATIN AMERICA AND UNITED STATES POLICIES 61


health and sanitation, the elimination of illiteracy, the improvement of
public administration, the reform of labor practices, the expansion of
transportation and the development of appropriate industrial enter-
prises. Primary responsibility for action in these and similar matters
ies with the Andes people and governments. For what is involved
constitutes the basic work of free and independent nations in the
modern world.
An attempt to assume these responsibilities by the United States
would serve not only to bring eventually upon ourselves the antag-
onism of aroused nationalism but it would also be highly presump-
tuous. In the cities of the Andes region, there are technicians who
compare favorably with our own or counterparts anywhere in the
world. As a matter of fact in some of these cities there are outstand-
ing training institutes in health and sanitation and other fields which
attract students from other parts of Latin America.
The work of development which needs to be done in the Andes
countries, however, is enormous and there is no question that tech-
nical cooperation can act to supplement indigenous efforts. In this
connection technical cooperation serves most effectively when it is a
response to clear and specific local requests to provide training and
education, and to fill temporary gaps in scientific knowledge. It
serves least effectively when it presumes to substitute our initiative
for local initiative. Within this context the technical cooperation
programs in the Andes countries are on the whole well-tried and suc-
cessful ventures.
III. THE TECHNICAL COOPERATION PROGRAMS IN THE ANDES COUNTRIES
Origins
The technical cooperation programs in the Andes countries began
during World War II. In the early stages of that conflict, the United
States was cut off from Far Eastern sources of rubber, chinchona
(quinine), tin, and other strategic commodities. The United States
enlisted the cooperation of the Andes countries and other Latin
American nations in an attempt to increase the supplies of these
commodities. To that end this country sent out technicians in agri-
culture, health, and education and trained Latin American specialists
in these fields.
The early cooperative programs were clearly in the common security
interests of the entire Western Hemisphere. They also served in
other ways the mutual interests of each of the countries involved.
From our point of view they contributed to an increase in the supply
of materials essential not only to the prosecution of the war but to
prevent drastic cutbacks in civilian consumption. The Latin Ameri-
can countries profited both from the sale of commodities and from the
training in modern scientific techniques.
The servicios
At the time that the point 4 concept was introduced by the Presi-
dent in 1949 the technical cooperation programs were still operating
in the Andes countries. They had evolved by then, moreover, into
an effective organizational structure centered on the so-called servicios.
These were governmental units, staffed by technicians supplied by the
United States and by indigenous personnel, within the departments
(i. e., Health, Education, or Agriculture) of the indigenous governments.





62 LATIN AMERICA AND UNITED STATES POLICIES

The servicios are still the key organizational element in the technical
cooperation programs in the Andes countries, acting as a kind of
spearhead for change. They are assigned responsibilities by the gov-
ernmental departments in which they operate. These responsibilities
involve the improvement of existing public services or the introduction
of new services and frequently their management until such time as the
department is prepared to incorporate them into its regular functions.
In recent years, servicios have functioned not only in the basic
fields of health, agriculture, and education but also in labor, transpor-
tation and others. Their acceptability and effectiveness appear to lie
in the fact that while they remain under the control of the country's
government they have sufficient independence coupled with the
requisite skills to introduce innovations. Moreover, they provide
not only a channel for the injection of modern techniques into local
practices but also a channel out for United States technicians once
these techniques have taken root.
Cost of technical cooperation
The technical cooperation programs over the years in the Andes
countries has been relatively inexpensive as compared with other types
of foreign aid. Since their inception in 1942, they have cost the United
States approximately $30 million. Over the same period, the govern-
ments of the Andes countries have provided in the neighborhood of
$50 million for the joint operation of the servicios.
During the current fiscal year (1957) the expenses of the technical
cooperation programs are estimated as follows:
[In millions]
United Andes
States country's
contribution contribution
Peru--.... --..................................... .....---- -------- -.. $2.8 $8 5
Bolivia--------------------------------------------------- 3.2 1.8
Ecuador.-.----------------------------------------------------------- 1.7 1.4
Total..------------------------.-------------------.-------- 7.7 11.7

Contrasting with the outlay of $30 million over a 15-year period for
technical cooperation in all three countries is the high cost of other aid.
Although they have been in operation for less than 5 years, economic
and military aid programs of various kinds already have cost in the
vicinity of $100 million.
In Bolivia, a direct economic assistance program began scarcely
3 years ago. Yet, it has already involved grants in excess of $70
million in that country alone, more than twice the total cost of
technical cooperation in all three Andes countries for 15 years.
This direct economic aid program began in 1954 when a threat
of starvation existed in parts of Bolivia as a result of dislocations
accompanying a revolution. About $11 million was provided the
first year. As has so frequently occurred under foreign aid, however,
what began as an emergency measure has tended to become a perma-
nent and growing program without clear indication of specific objec-
tives or the time it will take to achieve them. Thus, in 1955, $19.7
million in economic assistance was provided for Bolivia, in 1956,
$20.4 million and in 1957, $22 million.





LATIN AMERICA AND UNITED STATES POLICIES 63

Undoubtedly there have been unusual circumstances in the Bolivian
situation. Nevertheless, it is important to recognize that a dangerous
trend is set in motion when what starts as an "emergency" tends to
become permanent. Our assistance begins to underwrite on a quasi-
continuing basis another nation's economy. This state of affairs, if
it persists, is, to say the least, of dubious value either to us or to that
nation. It involves high costs to the United States. At the same
time it is an invitation to inaction on the part of others in undertaking
urgently needed measures of improvement.
It is particularly disturbing in the case mentioned above since an
undetermined but substantial amount of the food provided under
the direct assistance program for the relief of near-fanmine in
parts of Bolivia has been diverted from this purpose. It has been
carried across the borders into Peru by local operators.in search of
windfall profits. The responsibility for this state of affairs is as much
ours as it is the Bolivian Government's. Inadequate effort has been
made to control the end-use of this aid.
Military aid
Apart from technical cooperation and economic assistance, the
United States has extended military aid to Peru and Ecuador. Small
in size as compared with military programs in other parts of the world,
this assistance to the Andes countries is intended to promote coopera-
tion in the common defense of the Western Hemisphere. That is an
eminently desirable objective. We wish to note, however, that
extreme care must be exercised in the extension of military aid to
countries in which responsible government has scarcely begun to take
root. An increase in the military potential in such countries may serve
the desirable objective of defense against aggression. It may also be
used for questionable ends such as the seizure or maintenance of arbi-
trary power.
Further, it should also be noted that there are boundary disputes
and other elements of tension in the Andes region and the ratio of
available military power among the countries there may well have a
direct relationship to keeping the peace.
Export-Import and International Bank loans
The operations of the Export-Import Bank and the International
Bank are not aid in the strict sense. They are mutually advantageous
activities, essentially commercial in nature. The Export-Import
Bank has authorized over $200 million to the three countries, almost
half of which has actually been advanced. Loans totaling $50 million
have been provided by the International Bank to Peru and Ecuador.
None of these advances which carry good rates of return is in default
on either principal or interest.
The loans have been used largely for mining development, highway
and transportation improvement; to purchase various types of ma-
chinery for agriculture and industry, and for other useful purposes.
The preponderance of the purchases were made in the United States.
One of the projects made possible by loans of this type is the Santa
Cruz-Cochabamba highway in Bolivia which was inspected during the
course of this mission. This investment has not only provided better
access to petroleum deposits but it has also had a highly beneficial
effect on agriculture in an extensive region of that country.





LATIN AMERICA AND UNITED STATES POLICIES


In many instances, loans by the Export-Import and the Inter-
national Bank are a logical outgrowth of technical cooperation. They
act to carry economic development a step further in the Andes coun-
tries from the base established by the programs.
Other programs in the Andes countries
The United States contributes to technical assistance programs of
the United Nations, its specialized agencies and the Organization of
the American States, all of which operate in the Andes countries.
While smaller than the United States programs, the United Nations
and the agencies conduct substantial technical assistance operations
in the three countries. In 1955, over $700,000 was allocated for this
purpose and about 70 United Nations specialists were maintained in
the region.
Mention should also be made of the existence of extensive programs
conducted by United States religious groups and other private organi-
zations. Finally, there is the work of private United States business
organizations which carry on extensive training programs for local
personnel both in the Andes countries and in the United States.
These programs are a part of regular business operations but they
serve to transmit knowledge of modern methods of industry and com-
merce to the nations involved.
Operation of a typical technical cooperation program-Peru
In each of the Andes countries, technical cooperation operates in
essentially the same pattern. There are variations growing out of
local problems but, in general, the scope and administration of the
programs are comparable. The details of the program in Peru are
set forth here for purposes of illustration.
Since 1942, most of the United States expenditures for techni-
cal cooperation in Peru have gone for the salaries and expenses of
United States technicians and other personnel. Over the years, the
Peruvian Government has borne the preponderance of the cost of tech-
nical cooperation activities.
At the present time, the program in Peru revolves about five
principal servicios and several advisory services. In addition, the
program includes contracted projects which are being carried out by
the University of New Hampshire (for education in chemistry) and
the University of North Carolina (for assistance in improving educa-
tion in textile engineering and agricultural research methods).
The servicios are active in the following fields: rural development;
agriculture and natural resources; health, welfare, and housing; edu-
cation; and labor. The advisory services are providing assistance to
the Peruvian Government in census taking, archives management,
mining and metallurgy, transportation, and in the survey and man-
agement of mineral resources.
In general, the tasks which have been assigned to the servicios are
in the nature of pioneering projects in basic development. With
respect to agriculture, they have involved the establishment and
initial operation of an agricultural extension service, a fisheries and
wildlife service, assistance in irrigation projects and in the advance-
ment of rubber cultivation.
In the field of health, the responsibilities of the servicios include
the administration of medical posts in certain jungle regions, the





LATIN AMERICA AND UNITED STATES POLICIES 65

management of several hospitals, the development of an industrial
hygiene program, and the provision of safe water supply.
The educational servicio is concerned primarily with improving
methods and facilities for teacher training and rural education. In
the latter connection, it has developed a system of rural "nuclear
school units" in the Andes highlands. These act to modernize
existing schools and to expand the rural educational system.
The servicios in labor and rural development are relatively new.
The former is assisting in the development of a-national employment
service. The latter has been helping in projects which involve inte-
grated rehabilitation of small rural communities.
The concept of integrated development is now being extended on a
vast scale to embrace all of southern Peru. This sector of the country
in the vicinity of Lake Titicaca contains 22 million inhabitants, about
25 percent of the total population. They are among the most poverty-
stricken people of Latin America. Recently, their living conditions
have undergone a decline to the edge of famine due to a severe drought.
For the moment, food allocations under Public Law 480 appear to
have staved off a disaster. These shipments, however, are at best
only a palliative.
As a permanent solution, the Peruvian Government, with technical
cooperation from the United States mission in Lima, hopes to launch
a wide-scale attack on the problems of the southern region. In the
immediate future the contemplated program involves concentration
on public work projects for the relief of the drought-stricken inhab-
itants, health programs, technical aid to agriculture and the expansion
of educational facilities. At the same time a broad study of natural
resources and the present economic use of the region will be made as
a preliminary to investment in the most promising opportunities for
development.
The results
If a technical cooperation program is effective it will introduce new
methods which improve the living conditions of the populace affected.
If it is effective, it will also provide for the eventual withdrawal of
United States assistance without subsequent loss of the advances
brought about by the new methods. In short, the other country must
be able at some point to carry on useful innovations without further
assistance from this country.
The Department (Province) of Loreto was visited in an effort to
determine how well this transition has taken place with respect to
the health programs in Peru. This province embraces virtually the
entire upper watershed of the Amazon from the eastern slopes of the
Andes to the Brazilian border. It is inhabited largely by primitive
Indian tribes. Prior to the beginning of technical cooperation, there
were virtually no public health or medical facilities in the region.
Joint health work undertaken by the United States and Peru
started in the province in 1943 with the establishment of a dispensary
and medical service in the village of Caballococha for gatherers of
wild rubber. In the ensuing years, 15 separate projects were launched
by the health servicio. On January 1, 1954, all programs in the De-
partment of Loreto were transferred from the servicio to the Peruvian
Ministry of Public Health and Social Assistance. The transfer
terminated American technical cooperation in the area. Peru as-
sumed the full cost and responsibility for continuance of the programs.





LATIN AMERICA AND UNITED STATES POLICIES


The programs which were taken over included the operation of 4
hospitals, 4 medical dispensaries, a nurses' home, a preventive med-
ical center, 7 medical posts, 14 sanitary posts, a children's dispensary,
a maternal health center, 3 emergency medical launches on the
Amazon, a leper colony, malaria and yellow fever control, and general
development of all public health services.
There is every reason to believe that these projects are continuing
to operate effectively under the direction of the Peruvian Ministry of
Public Health. Several of the projects in the Amazonian city of Iquitos
were inspected during the course of the study. Despite limited
resources, the Peruvian doctors, nurses and health workers-many
of them educated in the United States under the technical cooperation
program-were serving the people of the city in keeping with the
finest traditions of their professions.
On the wall of the reception room of one hospital was a bronze
plaque which had been installed at the insistence of the Peruvians
more than a decade ago. The plaque credits the establishment of the
hospital to the joint efforts of the people of the United States and
Peru. This unsolicited tribute reflects the potentials of the technical
cooperation program for cementing friendly relations between nations
when their citizens cooperate in the common cause of humanity.

IV. CONCLUDING COMMENTS AND RECOMMENDATIONS
As already noted, it is our belief that the technical cooperation
programs are serving the interests of both the Andes countries and
the United States. They are doing so at relatively small cost and with
a high degree of effectiveness.
On the whole, the level of operations appears to be well suited to
the existing situation in Peru, Bolivia, and Ecuador. It is entirely
possible that occasion may arise in which additional opportunities
will present themselves for constructive work. If they do, then
consideration should be given to strengthening these programs.
At the same time, it is essential to maintain careful surveillance
against any tendency toward expansion of economic and military aid
activities in the Andes. Further, these activities must be kept entirely
distinct from the technical cooperation program. While they may be
necessary, at least for the present, every precaution should be taken
to see that they do not inadvertently undo the slower but more
certain progress which is'being registered under the technical coop-
eration programs.
With respect to the latter programs, it is essential that administra-
tion be constantly improved and kept attuned to the changing circum-
stances in the region. In this connection, we recommend that the
executive branch or the Congress, as the case may be, give considera-
tion to the following matters:
1. Improvement in coordination of the United States technical cooperation
program and other aid programs
As already noted, not only the United States programs but those of
the United Nations and the Organization of the American States
operate in the Andes countries. There is little evidence that coordina-
tion among those various programs is other than perfunctory. The
executive branch might well direct study to this question to determine





LATIN AMERICA AND UNITED STATES POLICIES


whether the present utilization of these various channels, all of which
involve substantial United States expenditures, is the most effective.
In particular, we recommend that consideration be given to the
possibilities of expanding the role of the Organization of the American
States in a technical cooperation program geared to the total needs of
the Western Hemisphere. Peru and other countries have outstand-
ing technicians and training facilities which could be of great utility
in the development of other nations in the hemisphere. Some inter-
change of this kind is already going on among the Latin American
nations but the entire field of coordinated technical cooperation on
a hemispheric basis warrants further exploration.
2. Transfer of control of projects developed under the program
United States technicians ought not to be withdrawn from specific
technical cooperation projects before these projects have taken root.
On the other hand, it is essential that the process of transfer to full
local control be not too long delayed. Unless the transition comes
as promptly as possible there is not only a waste of the scarce man-
power and financial resources of the program, but an undermining
of local initiative. We recommend that, wherever possible, target
dates for transfer of specific projects to local control be established
in consultation with the country involved. We also recommend
that every effort be made to imbue United States personnel with
the philosophy that their highest contribution to the program will
lie in, as one outstanding administrator put it, "working themselves
out of one job after another as quickly as possible by training local
technicians to carry on the work." If this philosophy is to prevail,
the administering agency's personnel policies must be such as to
reward rather than penalize those who are most successful in following
it.
S. Interchange in the Andes countries
Although the problems of technical cooperation are very similar,
the staffs in each of the Andes countries have had little contact with
one another. That is most unfortunate since experience in one coun-
try might be helpful in the others. We recommend, therefore, that
the administering agency make provision for periodic conferences
among the United States technicians working in the various Andes
countries for the purpose of interchanges of ideas which might make
the program throughout the region more efficient.
4. Improvement in the exchange program
A key element in effective technical cooperation is the training of
local technicians in the United States and Puerto Rico. Numerous
complaints were registered with us concerning the delays and inter-
minable red tape involved in this exchange program. We strongly
urge that the program be strengthened and that the executive branch
examine present procedures for handling exchanges with a view to
simplifying and speeding up the process.
5. Increasing the "mutuality" of the program
There is some tendency to overstress our part of the technical
cooperation program. It should not be forgotten that these programs
operate most successfully and with greater satisfaction to both parties
when they operate on a mutual basis. We recommend, therefore,





LATIN AMERICA AND UNITED STATES POLICIES


that the administering agency explore possible avenues whereby the
program may contribute more heavily to our own development.
There is every reason to believe that the Andes countries would
welcome opportunities to make contributions of this kind. As one
outstanding political leader in the region put it: "It is a misnomer to
call these programs technical assistance. They are more accurately
described as technical cooperation." What is needed is to give
added substance to the word "cooperation."
6. Technical cooperation in public administration
As already noted, the modern progress of any nation rests largely
on the efforts of the people directly involved and the capacities of
their leadership. In the Andes countries, there are many outstanding
public servants but the traditions of an impartial professional civil
service are little developed. Yet without such a service, it will be
difficult to consolidate the improvements in public health, public
education and the like which are produced by technical cooperation.
We recommend, therefore, that the programs be expanded for the
purposes of improving public administration, provided such expan-
sion is sought by the Andes countries. The specialists who handle
assignments in this field must be selected with extreme care because
it involves an area of national sovereignty where the borderline be-
tween friendly advice and interference is not a very distinct one.

The recommendations which we have advanced are prompted by
our personal observations and the problems which were brought to
our attention during the course of this recent study. We emphasize,
however that the situation is constantly changing. The question of
technical cooperation in atomic energy matters, for example, is now
coming into prominence. It is the responsibility of the executive
branch both in Washington and the field, to be alert to such changes
and to their implications for the programs.
Technical cooperation in the Andes countries, measured by any
yardstick, is a worthy undertaking. It warrants the encouragement
of the Congress and the American people as long as it is effectively
pursued in the mutual interests of the peoples of those countries and
the United States.








87th Congress COMMITTEE PRINT






MEXICO-UNITED STATES
INTERPARLIAMENTARY GROUP




REPORT OF THE SENATE DELEGATION
ON THE FIRST MEETING, HELD AT
GUADALAJARA, JALISCO, MEXICO
FEBRUARY 6-11, 1961
BY

Senator MIKE MANSFIELD, Chairman


MARCH 4, 1961







Printed for the use of the Committee on Foreign Relations


U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1961









LATIN AMERICA AND UNITED STATES POLICIES 7]






















CONTENTS


Pare
Letter of transmittal------ --------------- -------------------. 72.
I. Background----------------------------------------------- 73
II. Work of the conference-------------- ------ ------------------- 75
A. Committee I-Foreign Investment----------------------- 75
B. Committee II-Foreign Trade-------------------------- 77
C. Committee III--Border Matters------------------------- 78
D. Committee IV-Cultural Interchange--------------------- 78
III. Conclusions and recommendations------------------------------ 79
Appendix: Financial statement -------. ----------------------------. 80





72 LATIN AMERICA AND UNITED STATES POLICIES


LETTER OF TRANSMITTAL


MARCH 4, 1961;
Hon. LYNDON B. JOHNSON,
President of the U.S. Senate.
DEAR MR. VICE PRESIDENT: Pursuant to Public Law 86-420,
approved April 9, 1960, and as chairman of the Senate delegation, I
transmit herewith a report on the first meeting of the Mexico-United
States Interparliamentary Group which was held in Guadalajara,
Jalisco, February 6 to 9, 1961.
As the report makes clear, the meeting was very successful. This
was due in large measure to the thoroughness of the preparations which
had been made by our Mexican hosts, and to the frank and friendly
atmosphere in which the discussions were conducted. It was due also
to the personal interest which had been taken in the meeting and in
our relations with Mexico generally by President Kennedy, by Chair-
man J. W. Fulbright of the Senate Foreign Relations Committee, and
by yourself.
I want to take this opportunity to express publicly my deep personal
appreciation to all of our Mexican hosts for their generous hospitality
and particularly to Gov. Juan Gil Preciado of the State of Jalisco and
to Mayor Juan I. Menchaca of the beautiful city of Guadalajara.
Mention should also be made of the able work of the House delega-
tion under the outstanding leadership of Representative D. S. Saund.
The House group is submitting its own report to the Speaker of the
House.
Sincerely yours,
MIKE MANSFIELD,
U.S. Senator.




LATIN AMERICA AND UNITED STATES POLICIES


MEXICO-UNITED STATES INTERPARLIAMENTARY
GROUP


I. BACKGROUND
U.S. participation in parliamentary conferences with Mexico was
authorized by Public Law 86-420, approved April 9, 1960, which
originated as House Joint Resolution 283 by Representative D. S.
Saund. A companion measure in the Senate was Senate Joint Reso-
lution 102 by Senator Chavez for himself and Senators Kuchel, Engle,
Yarborough, Morse, and Gruening. Similar action was taken in
1959 by the Mexican Congress.
The intent was to provide a mechanism for informal discussions of
mutual problems by the legislators of the two countries. As a result
of preliminary talks during the summer of 1959 between representa-
tives of the Mexican Congress and members of the Senate Foreign
Relations and House Foreign Affairs Committees, it was agreed that
the first meeting of the Mexico-United States Interparliamentary
Group would be held in Guadalajara, Jalisco, Mexico, February 6-11,
1961.
Under the terms of Public Law 86-420, the following Senators were
appointed by the Vice President as delegates:
Mike Mansfield of Montana
Dennis Chavez of New Mexico
Bourke B. Hickenlooper of Iowa
Wayne Morse of Oregon
Andrew F. Schoeppel of Kansas
John Marshall Butler of Maryland
Albert Gore of Tennessee
Carl T. Curtis of Nebraska
Clair Engle of California
Ernest Gruening of Alaska
Eugene J. McCarthy of Minnesota
Claiborne Pell of Rhode Island
The Speaker of the House appointed the following delegates from
that body:
D. S. Saund of California
Walter Norblad of Oregon
William L. Springer of Illinois
Joel T. Broyhill of Virginia
J. T. Rutherford of Texas
Joseph N. Montoya of New Mexico
Robert N. Nix of Pennsylvania
Harris B. McDowell of Delaware
Edward J. Derwinski of Illinois
Daniel K. Inouye of Hawaii
Ancher Nelsen of Minnesota





74 LATIN AMERICA AND UNITED STATES POLICIES

Under the law, the delegates from each House who are members
of the Foreign Relations and Foreign Affairs Committees, respectively,
serve for the 2 years of the 87th Congress. These are Senators
Mansfield, Hickenlooper, Morse, and Gore, and Representatives
Saund, Nix, and McDowell. The other delegates served only for
the single meeting.
At a preliminary meeting in Washington on February 4, the group
elected Senator Mansfield chairman and Representative Saund vice
chairman of the joint delegation.
With the exception of Senator Morse, who was unavoidably de-
tained at the last minute, the group left Washington February 5 and
participated in the meetings with its Mexican colleagues in Guadala-
jara February 6 through 9. On February 10 the group proceeded to
Mexico City to pay its respects to President Adolfo Lopez Mateos
and Foreign Minister Manuel Tello, and returned to Washington
February 12.
The Mexican delegates were:

SENATORS
Eliseo Aragon Rebolledo of Morelos
Rodolfo Brena Torres of Oaxaca
Abelardo de la Torre Grajales of Chiapas
Guillermo Ibarra of Sonora
Fernando Lanz Duret Sierra of Campeche
Emilio Martinez Manautou of Tamaulipas
Antonio Mena Brito of Yucatan
Manuel Moreno Sanchez of Aguascalientes
Guillermo Ramirez Valadez of Jalisco
Carlos Roman Celis of Guerrero
Maximiliano Ruiz Castaneda of Mexico
Angel Santos Cervantes of Nuevo Leon
Juan Manuel Teran Mata of Tamaulipas
Francisco Velasco Curiel of Colima

DEPUTIES
Florencio Barrera Fuentes of Coahuila
Antonio Castro Leal of the Federal District
Carlos Hank Gonzalez of Mexico
Arturo Llorente Gonzalez of Veracruz
Enrique Olivares Santana of Aguascalientes
Jose Ortiz Avila of Campeche
Jose Perez Moreno of Jalisco
Juan Sabines Gutierrez of Chiapas
Enrique Sada Baigts of Oaxaca
Guillermo Salas Armendariz of Durango
Emilio Sanchez Piedras of Tlaxcala
Jose Vallego Novelo of Yucatan
Manuel Yanez Ruiz of Hidalgo
Before discussing the substantive work of the conference, the Senate
delegation desires to express publicly, albeit inadequately, its deepest
appreciation for the overwhelming cordiality and hospitality of its





LATIN AMERICA AND UNITED STATES POLICIES


Mexican hosts. Nothing was too much for them to do; no detail was
too small for them to overlook. The work of the conference was well
organized and well arranged in the beautiful Casa de la Cultura where
an efficient staff of simultaneous interpreters, translators, and ad-
ministrators had been assembled.

II. WORK OF THE CONFERENCE
At the formal opening of the conference in the Experimental
Theater, Senator Guillermo Ramirez Valadez of Jalisco gave the ad-
dress of welcome and Senator Mansfield responded on behalf of the
U.S. delegation. The Mexican delegation then placed a wreath before
a statue of Abraham Lincoln, and the American delegation was hon-
ored to pay a similar tribute to the great Benito Juarez. Subse-
quently, the American delegation also voted to present a plaque to be
placed in the Casa de la Cultura to mark the site of this first meeting
of the Mexico-United States Interparliamentary Group. This de-
cision was announced in a plenary session by Senator Hickenlooper.
At the closing session, Deputy Jose Perez Moreno, chairman of the
Mexican Deputies, and Representative D. S. Saund, chairman of the
U.S. Representatives, made the principal speeches, expressing their
satisfaction with the work of the conference. After the end of the
conference itself, delegates were paid the signal honor of being re-
ceived by the Congress of the State of Jalisco in solemn session. On
this occasion, remarks were made by Jalisco Deputy Guillermo Cosio
Vidaurri and Senator Gore.
The work of the conference was organized around four committees
dealing with foreign investment, foreign trade, border matters, and
cultural interchange. Each committee held two meetings. It was
agreed that there would be no voting. It was recognized that neither
delegation was authorized to speak for its Government, and no attempt
was made to reach agreements. The object was a full and frank
discussion of common problems and exposition of individual points of
view.
At subsequent plenary sessions, rapporteurs read summarized min-
utes of the various committee discussions. All of the plenary sessions,
as well as the committee meetings, were tape recorded, and the com-
plete documents of the conference will be published in due course.
When the full transcript of the meetings is received, it will be dis-
cussed with appropriate officials of the executive branch. This report
is merely a preliminary and abbreviated summary which also contains
the impressions of the U.S. Senate delegates.

A. COMMITTEE I-FOREIGN INVESTMENT
The delegates assigned to this committee were:
From the United States: Senators Gruening, Pell, and Schoeppel;
Representatives Rutherford, Broyhill, Norblad, McDowell, and
Springer.
From Mexico: Senators Santos Cervantes (chairman), Brena
Torres, Mena Brito, Moreno Sanchez, and Velasco Curiel; Deputies
Sada Baigts (rapporteur), Castaneda Zaragoza, Hank Gonzalez,
Ortiz Avila, Sanchez Piedras, Vallejo Novelo, and Yanez Ruiz.





LATIN AMERICA AND UNITED STATES POLICIES


Various members of the Mexican delegation made the following
points:
1. Although the rate of capital accumulation in Mexico is increas-
ing, the country requires even more capital than can be supplied
locally and foreign investment is therefore needed and welcomed,
provided that it does not seek special privileges and that it supple-
ments, rather than competes with, local investment.
2. Mexico prefers what the Mexican delegates called "indirect
foreign investment',-that is, either loans to public agencies for use
as seems most desirable to Mexico, or private participation on a
minority basis in Mexican enterprises.
3. Particular criticisms were heard of private foreign investment
in businesses which compete with Mexican private business (e.g.,
retail trade, soft drinks, detergents), in automobile assembly opera-
tions (it was said that despite local assembly, automobiles cost more
in Mexico than in the United States), and in mining (it was said that
Mexico's mineral resources are not being used for the benefit of
Mexico, but for export).
4. Export of minerals and repatriation of profits from other private
investment in Mexico are resulting in a net loss of capital to Mexico.
5. Although Mexico will not give special treatment to foreign invest-
ment, it does offer many attractions to acceptable foreign investment-
e.g., good profit prospects, free convertibility of capital and profits,
moderate tax rates, subsidies for new and necessary industries, cheap
fuel, low transportation rates, easily trainable labor, a stable currency,
and political and social stability.
6. The Mexican Constitution considers private property as an
element to serve social needs, and Mexico reserves its sovereign right
to put social restrictions on property. The Mexican Constitution,
however, also provides for compensation for property which may be
expropriated for social purposes.
The American delegation made the following points:
1. U.S. private business does not seek special status, but it does
seek not to be discriminated against.
2. The right of Mexico, or any other country, to accept or reject
private investment on its own terms is recognized, but it must also
be recognized that private investment will go where its treatment
and profit prospects are best.
3. Foreign investment in Mexico contributes substantially to Mex-
ico's economic growth. In 1955, for example, foreign investment
accounted for $240 million in the Mexican national product. Many
foreign companies reinvest a large part of their earnings. Even
among those companies which are directly competitive with Mexican
business, some of them build up Mexican industry through a policy
of local procurement and give Mexican consumers good quality
merchandise at low prices.
4. It was suggested that some American businessmen are uncertain
of the meaning of Mexican laws relating to foreign investment and
that, if this were true, the laws should be clarified.
5. It was recognized that Mexico, like any other country, has the
right of expropriation with compensation, and no objection was seen





LATIN AMERICA AND UNITED STATES POLICIES


in the proposal for American participation with Mexican capital on a
minority basis.
6. Mexico has an excellent international credit rating, and the hope
was expressed that its borrowings would be for long terms at low in-
terest rates.
It may also be noted that, through June 30, 1960, the Export-
Import Bank had authorized credits for Mexico totaling $468.7 mil-
lion and the International Bank for Reconstruction and Development
had made loans of $205.8 million. The Export-Import Bank loans
included $133 million for railroads and $68.6 million for steel mills.
The IBRD loans included $61 million for railroads and $144.8 million
for power.
B. COMMITTEE II-FOREIGN TRADE
The delegates assigned to this committee were:
From the United States: Senators Gore, Hickenlooper, and Mc-
Carthy; Representatives Springer, Nix, Nelsen, Derwinski, and
Inouye.
From Mexico: Deputies Vallejo Novelo (chairman), Hank Gon-
zalez (rapporteur), Castaneda Zaragoza, Ortiz Avila, Sabines Gutierrez,
Sada Baigts, Sanchez Piedras, and Yanez Ruiz; Senators Mena Brito,
Moreno Sanchez, Teran Mata, and Velasco Curiel.
Members of the Mexican delegation strongly emphasized their de-
sire for "trade, not aid," and pointed to several impediments in the
way of developing trade between the two countries. Among these
were price fluctuations in basic commodities, U.S. quotas and tariFs
on imports, and U.S. subsidies on cotton exports. Among the com-
modities discussed, besides cotton, were lead, zinc, coffee, shrimp,
fruits and vegetables, hard fibers, and sugar. The Mexican delega-
tion was particularly apprehensive about the prospects for Mexico's
exports of lead and zinc.
Members of the American delegation were sympathetic with the
problems raised by their Mexican colleagues, but pointed out some of
the problems which they, as American legislators, faced at home in
the form of unemployment, depressed areas, and the demands of
their constituents. Suggestions were made that perhaps greater
efforts should be made to arrive at workable international com-
modity agreements. With respect to cotton, it was pointed out that
the export subsidy had been reduced from 8 to 6 cents and that
prices had continued firm. The question was raised as to what
would happen if the United States removed all support prices and
production restrictions on cotton. An American delegate thought
that this would result in an increase in U.S. production. A Mexican
delegate thought that it would result in a decrease, with land now in
cotton being diverted to more profitable uses.
The Mexican delegation took special note of a report that President
Kennedy had decided not to establish tariffs or quotas on henequen
baling twine and cordage, and expressed its satisfaction with this
decision.
The American delegation expressed its confidence that trade
between the United States and Mexico would continue to increase.





78 LATIN AMERICA AND UNITED STATES POLICIES


C. COMMITTEE III-BORDER MATTERS
The delegates assigned to this committee were:
From the United States: Senators Chavez, Curtis, and Engle;
Representatives Saund, Montoya, Rutherford, Nix, McDowell, and
Norblad.
From Mexico: Deputies Olivares Santana (chairman), Barrera
Fuentes, Gandarilla, Sabines Gutierrez, and Rivero Azearraga;
Senators de la Torre Grajales (rapporteur), Mena Brito, Aragon
Rebolledo, and Moreno Sanchez.
Discussions centered on two main points-tourists and braceros.
The Mexican delegation was particularly disturbed by President
Kennedy's recommendation that Congress reduce from $500 to
$100 the value of goods which tourists could bring into the United
States duty free. In regard to braceros, the Mexican delegation
pointed out that the minimum wage of 50 cents an hour had not
been increased since the original agreement of 1942; that insurance
coverage of braceros was inadequate; that arrangements for feeding
the workers were unsatisfactory; and that sometimes, in the interests
of harvesting crops rapidly, so many braceros were recruited that
their work did not last long enough to justify the trip.
The American delegation agreed that all of these matters were
worthy of careful study by executive officials of the two countries.,
The hope was expressed that simpler and better procedures for
handling tourists crossing the border in both directions could be
worked out by the authorities of both countries. In regard to
braceros, it was pointed out that, although the minimum wage had
not been increased, the average wage in fact amounted to 90 cents
an hour. The bracero program was called the best point 4 program
of the American Government in that through it Mexican workers
learned about methods of cultivation-what ought to be planted,
and when, and how to use fertilizer.
Finally, the American delegation raised the problem of border
crossings by juveniles, particularly in the California area. The
Mexican delegation agreed to make this concern known to the Mexican
Government so that possible legal steps could be considered.

D. COMMITTEE IV-CULTURAL INTERCHANGE
The delegates assigned to this committee were:
From the United States: Senators Butler and Mansfield; Repre-
sentatives Inouye, Saund, Montoya, Derwinski, Broyhill, and Nelsen.
From Mexico: Deputies Barrera Fuentes (raporteur), Castro Leal,
Olivares Santana, and Salas Armendariz; Senators Ibarra Fuentes
(chairman), Aragon Rebolledo, Martinez Manatau, Moreno Sanchez,
Ruiz Castaneda, and Teran Mata.
> There was general agreement that cultural exchanges should be
increased. Among the specific points which were raised were:
1. Such media as publications, library services, radio, and television
should be diffused more widely in a reciprocal manner.
2. More should be done to give Mexican students a chance to live
with American families and to give American students a chance to
live with Mexican families.





LATIN AMERICA AND UNITED STATES POLICIES 79

3. It would be desirable to establish a training program for Mexican
students in U.S. industries.
4. Scholarships should be for longer periods.
5. It would be desirable to establish university-to-university rela-
tionships to encourage the exchange of students and professors.
The Mexican delegation emphasized the desirability of systematiz-
ing cultural interchange through an Inter-American Institute of
Cultural Action, and especially of international credits for educational
and cultural institutions carrying on this work. There was discussion
of the possible establishment, either in the Caribbean or in conti-
nental Latin America, of a center for scientific research and cultural
interchange.
III. CONCLUSIONS AND RECOMMENDATIONS
The first meeting of the Mexico-United States Interparliamentary
Group proved to be worthwhile beyond the expectations even of its
sponsors.
The U.S. delegation was received by its Mexican hosts, and by the
people of Guadalajara generally, with great hospitality.
Each member of the Senate delegation came away with a better
understanding of the Mexican point of view toward the problems of
Mexican-United States relations covered by the agenda. This was
due in large measure to the friendly candor and frankness of the Mexi-
can delegates and to the thoroughness with which they had prepared
their presentations. The Senate delegation went to Guadalajara
prepared to listen more than to talk, and to learn more than to teach.
The delegation did, however, tttke advantage of the opportunity to
explain some of the problems which confront the United States, both
in its domestic affairs and its foreign relations. We think that, as a
consequence, the Mexican delegates likewise gained a better insight
into our point of view.
This increase in mutual understanding was the outstanding ac-
complishment of the conference. What is referred to here is not
simply the nebulous concept of international goodwill, but solid knowl-
edge of concrete problems-Mexico's attitudes, and the reasons for
them, toward different types of foreign investment, toward trade
problems, tourism, treatment of braceros in the United States, and
exchanges of students and teachers.
Similarly, we were able to tell the Mexican delegates first hand
about our problems of unemployment of depressed areas, and of thbr
gold outflow.
Obviously, none of these problems-either of a domestic or an
international nature-was settled at the conference. That was not
the intention, nor was it in the province of the legislators to arrive at
solutions.
But we think the conference did serve the purpose, at least so far
as the Congresses of Mexico and the United States are concerned, of
clearing the air and making at least some of the problems discussed
more easily susceptible to solution by the appropriate executive
officials of the two countries. Each of the problems raised at the
conference is deserving of the sympathetic attention of officials at a
high level in the governments of both countries; and so far as the
United States is concerned, we recommend that these problems be
given an appropriate priority by the President, the Secretary of State,
and other Cabinet officers.





80 LATIN AMERICA AND UNITED STATES POLICIES


APPENDIX


FINANCIAL STATEMENT
At the time of the filing of this report, the estimated total of the
Senate delegation's official expenses for the First Mexico-United States
Interparliamentary Conference came to approximately $4,000.00. A
consolidated report showing all expenditures of the delegation at the
conference will be filed later with the Senate in accordance with law.














[The New York Times magazine, Dec. 4, 1960]
THE BASIC PROBLEM OF LATIN AMERICA
It is, says a Senator, to bring the developed "beach-
head societies" of its coasts closer to the great proverty-
stricken masses in the underdeveloped interior.
(By Mike Mansfield ')
When the new administration takes office in January it will find
the old problems of Latin America still on the doorstep of the White
House. It will not be able to step over or around these problems.
It is going to have to face them frankly, decide promply what can be
done about them, and begin in earnest to act on them.
As a nation, we have reawakened to our stake in the Western
Hemisphere and certain recent actions of Congress reflect this
reawakening. We have, for example, expanded the lending facilities
of our Export-Import Bank and joined in the creation of the Inter-
American Development Bank. Most recently, Congress proposed a
broad new approach to inter-American problems in authorizing $500
million to begin a new aid program. And Under Secretary Dillon
followed through at the inter-American economic meeting at Bogota,
Colombia, with a pledge of U.S. cooperation in dealing with Latin
America's economic and social problems.
In short, the legal means for a new approach to Latin America have
been accumulated. Their effective use awaits the touch of alert and
sensitive leadership from the new administration.
The importance of that kind of leadership in inter-American affairs
cannot be overemphasized. Unless it is present, there is a danger
that we shall interpret the Latin American situation primarily in
terms of Castroism and communism. If we do so, the basic problem
will elude us. To be sure, Castroism and communism are powerful
forces, but they are in the nature of an effect rather than a cause.
Underlying their presence on the stage in Cuba and in the wings
elsewhere in Latin America is a more fundamental factor.
JIn plainest terms, the basic problem of Latin America is that the
social structures of many nations of the region are seriously out of
date and cannot endure in their present form in the second half of
the 20th century. They cannot endure for the simple reason that
they do not deliver enough education, enough food, shelter, and cloth-
ing, enough medical aid, enough of the conveniences that are taken
for granted in this country and are relatively commonplace in Western
Europe and even in Soviet Russia. Most important, they do not
provide for a sufficient number of people that intangible but essential
1 Mike Mansfield, formerly a professor of Latin American and Far Eastern History at the University of
Montana, has been Democratic Senator from Montana since 1953.





82 LATIN AMERICA AND UNITED STATES POLICIES

element of prideful participation in the present and hope for the
future which is the keynote of political stability.
The inability of many Latin American nations to meet the needs
of their people arises not so much from underdevelopment as from
extremely lopsided development. In Peru, for example, during a
plane flight of 2 hours one can travel to places that differ in develop-
ment by several centuries.
That is the extent of the lag between the capital of Lima with its
wide boulevards, plazas, skyscrapers, modern conveniences, and traf-
fic problems and the quiet, wretchedly poor villages in the Andean
highlands to the east, inhabited by illiterate Indians who scratch
out a bare existence using primitive agricultural methods. Flying
2 hours further to the east, the plane sets down in an isolated clearing
in the Amazonian jungle stalked by tribespeople who still hunt with
poison-tipped darts. Here the social lag is measured in millennium.
In Lima itself, a literate and cultured minority live surrounded by a
vast urban poor whose lot is one of unspeakable squalor. The poor
know what decent housing is but they do not have it. They know
that modern medical care can cure but they are not cured. They
know that education is beneficial but they are not educated. In short,
the decencies of modern life are clearly visible to them and, just as
clearly, beyond their reach.
Peru is not unique. Lopsided development is to be found in greater
or lesser degree in just about every nation in Latin America. It is a
consequence of the unique complex of cultural and economic forces
that has shaped these societies over the centuries.
The modern Latin American nations began as beachheads in the
New World in much the same way as did our Thirteen Original States.
Unlike this Nation, however, the social structure of most of our
southern neighbors more or less atrophied in this form.
The European-derived minorities in the cities provided the economic
organization necessary for a limited tapping of the great natural
wealth of the interiors, which was funneled abroad largely in the form
of exports of food and raw materials. The returns from these exports
were hoarded or spent abroad or were stopped largely at the beach-
head cities. This process underlies the great concentration of wealth
in a few hands and the spectacular growth of some Latin American
cities into islands of lush modernism and great culture in a sea of social
stagnation.
For the many Latin Americans in the city slums and particularly
in the hinterlands, the process has had little constructive relevance.
Through generations they have continued to live out their lives in
ancient Indian and tribal patterns. Or if they have been drawn into
the process, it has been to provide the labor to grow, to extract, and
to move commodities to the beachheads. They have received few
benefits in the form of sufficient food, better health, greater comforts,
and opportunities for self-development.
Not only in an economic sense have most of the people of Latin
America been bystanders, or mere cogs, in the beachhead societies.
They were also bypassed for a long time by the concepts of responsible
government and freedom when these ideas invaded Latin America in
the 19th century.
These new clarions did not reach much beyond the beachheads and
they were heard almost exclusively by the small minorities. The





LATIN AMERICA AND UNITED STATES POLICIES 83

balance of the populace was summoned by them, if all, only at mo-
ments of quixotic flareup which changed rulers without bringing
about changes in the basic structure of Latin American society.
The pressure for deep change in this structure, however, has been
accumulating steadily for several decades, notably since World War II.
It is fed from intricate sources but certainly it is due for the major
part to the stagnation of agriculture under antiquated systems of
production and exploitative systems of land tenure at a time of rapidly
expanding population.
.It is fed, too, by the beginnings of an industrialization that has
intensified urban concentration and brought more and more people
into a direct awareness of the inadequacy of their lot in contrast to the
glaring wealth and opportunities of a few.
Perhaps most of all, the accumulating pressure for deep-seated
change is a consequence of modern communications. Ideas no longer
stop at the beachheads. The slum dwellers of'the Latin American
cities and the poverty-stricken villagers of the hinterlands alike have
heard the message from this country, from Europe, and from Soviet
Russia.
Millions of Latin Americans are now persuaded that a stoic suffering
of misery or repression is not a virtue. The more that this concept is
disseminated and takes root, the more the pressure for change inten-
sifies and along with it the search for leaders capable of bringing about
such change.
Responsible Latin American statesmen know that the long-range
problem confronting their countries is to convert the beachhead
societies into stable national structures. But the immediate problem
is to cut the social lags which exist between the cities and the hinter-
lands, between the affluent minorities and the poor in the cities them-
selves. For, because of these lags, the pitch of the demagog more
often than not is able to rise above the voice of reason, and the tangible
promises of repressive ideologies tend to swamp the abstractions of
freedom.
An adequate solution to the immediate problem of social lag is
essential if durable progress is to be made on the long-range problem
of developing responsible, stable governments in Latin America.
The key to the solution is an indigenous leadership which has the
courage to risk shifting substantially the base of political support
from the entrenched and powerful few to the many. Even if the
shift is made, the leadership must still have the wisdom and restraint
to use this broadened political power not for a new entrenchment of
personal power but for the building of institutions of freedom and
progress.
That kind of leadership has not been conspicuous in Latin America
until comparatively recent times. But it is beginning, now, to appear
with increasing frequency. Wherever it has appeared, as in Vene-
zuela and Peru, to cite just two examples, its hold is still most tenuous.
The old centers of power contract slowly and the social lags still
breed demagogs.
Yet, in spite of these obstacles, the transition from beachhead to
modern states must go forward. If it is not led by those who believe
in freedom, it will surely be pushed by those who do not. Specifically,
any Latin American nation which tackles this problem must move
on several fronts simultaneously:





84 LATIN AMERICA AND UNITED STATES POLICIES

(1) It must act, at once, to alleviate the most glaring inadequacies
in diet, housing, and health from which tens of millions of people suffer.
(2) It must improve agriculture by diversifying crops, broadening
landownership, expanding cultivable acreage, and introducing modern
agricultural techniques on a wide scale in order to increase production,
particularly of food.
(3) It must bring about the establishment of a steadily expanding
range of industries.
(4) It must wipe out illiteracy within a few years and provide
adequate facilities to educate an ever-increasing number of highly
trained technicians, specialists, and professionals to provide the whole
range of modern services.
(5) It must end the relative isolation of the beachheads from the
interiors and the parts of the interior from one another by a vast
enlargement of existing systems of transportation and communications.
Effective free government in Latin America can achieve much of
what needs to be done by marshaling the unused or partially used
labor potential and capital of its own people. It can act to transfer
initiative, energies, and resources from Paris and Monte Carlo, so to
speak, to Arequipa and Tucuman.
But even if these sources have been tapped, the total capacity for
doing what must be done is likely to fall short of the job. It is
precisely at this point that recognition of our long-range national
interest, and acceptance of the responsibilities of leadership in this
hemisphere, can be decisive.
In the past our economic policies respecting Latin America have
not been focused on the problem of the beachhead nature of its
societies. We have dabbed at the inner difficulties of the Latin-
American nations with small point 4 programs and in other random
ways. These have helped-but in a most limited fashion.
The emphasis of our policies has been on encouraging the flow of
private U.S. investment. This approach has had the effect of rein-
forcing the beachheads rather than modifying them. For the most
part, the products and returns of this enterprise flow abroad or are
held in the beachhead cities. Only a relative handful of Latin
Americans have benefited.
If we aim our policies at the problem of the transition from the
beachheads, it should be readily apparent that our agricultural sur-
pluses will have great relevance to the immediate problem of massive
malnutrition in Latin America. There is great relevance, too,- in the
capacities of the Export-Import Bank and the Inter-American De-
velopment Bank and other sources to the expansion of transportation
and communications facilities. Finally, the new aid program author-
ized by Congress can be pointed directly at the enormous needs in
housing, health, and education.
Aid from the United States will not help to end the beachheads if
it continues to be applied haphazardly. It will be effective only if it
moves in coordinated channels toward specific, measurable goals of
social and economic development in Latin America.
To bring about such a flow we must first centralize control over the
various aid sources within our own Government. Second, we must
insist that the Latin American leaders plan and act with us to use aid
in combination with the energies and resources of their respective
countries to build sinews, rather than symbols, of modern progress.





LATIN AMERICA AND UNITED STATES POLICIES 85

Unless we accept for ourselves, and are able through leadership and
diplomacy to get recipient countries to accept, the idea of an integrated
approach for all future aid activities, development in the Americas
is not likely to be brought about under the aegis of freedom. A new
and larger sprinkling of aid in the old random pattern will produce
little growth. Better prices and a larger market for coffee, sugar or
whatever may act as tranquilizers but they will not cure the ill.
As a Nation, we have got to face up to that fact. So, too, must the
Latin Americans. That is the challenge to the new administration.
It is a challenge to rid our Latin American policies of sterile slogans
and shibboleths which have heretofore obscured the problems. It is
a challenge to supply the national and hemispheric leadership and the
administrative follow-through that will use existing resources in a
concentrated program to enlarge the beachhead societies of Latin
America into truly national, democratic states.
The success of that effort is essential to Latin America's future.
It is essential to the future of this Nation.
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