g[T]he
Most Generous Assistanceh: U.S. Economic Aid to Guatemala and Bolivia,
1944-1959
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Most historians
examining United States-Latin American relations in the 1950s put this history
in a Cold War framework. Washington officials, these scholars argue, aimed to
create a noncommunist world. They acknowledge that the United States may have
had other interests, but security (defined as maintaining noncommunist regimes
in Latin America) was paramount.[2]
There was, however, a
more important and prior motive that shaped U.S. foreign policy toward the
nations to the south of the United States during the period 1953-61. U.S.
policy was more concerned about nationalism than communism. Latin American
nationalism was an older phenomenon than Latin American communism, and U.S.
policy had attempted to contain or eliminate Latin American nationalism that
was hostile to foreign investors and trade for nearly half a century before
Eisenhower entered the White House.[3] Thus the
Eisenhower administrationfs policies had deep roots that ran back well beyond
the Cold War years.
Many Latin American
nationalists desired increased control over foreign investment. They wanted
partial ownership of foreign enterprises in their nations, and they wanted
their own nationals to have management positions and technical training in
foreign-owned operations. Finally, nationalists desired increased economic
self-sufficiency\even at the expense of economic growth.[4]
These goals directly
contradicted Washingtonfs goals for inter-American relations. U.S. officialsf
main motive in the 1950s was to compel Latin American governments to open their
economies to outside private sector trade and investment and to create an
atmosphere amenable to private sector investment, both foreign and domestic.
Moreover, the United States saw private sector economic activity as the only
possible engine of Latin[5] economic
growth and industrialization.[6]
Washington policymakers
in the 1950s demanded that Latin economies remain open or become more open for
a number of reasons. They saw them as important outlets for U.S. exports.
During the decade the Latins bought 21% of these exports. In 1953, 34% of U.S.
direct investment was in Latin America.[7] Open
economies would, moreover, facilitate U.S. access to the strategic raw
materials Washington thought necessary to fight the Cold War.[8] Most
important, however, was stimulating Latin American economic growth. According
to policymakers, increased investment and trade in these societies would spur
such growth.[9]
Growth, officials
averred, would lead to political stability.[10] This
proposition was based on the assumption that the benefits of this capital accumulation
would trickle down to the non-elite classes.[11] Stability,
in turn, would immunize the Latins against nationalistic and anti-United States
regimes. Such regimes could damage U.S. prestige not only in the hemisphere but
worldwide. One 1955 National Security Council (NSC) analysis of United
States-Latin American relations argued that these relations ghave evolved in a
pattern that has shaped and influenced our arrangements and accommodations with
actions in other areas. The smoothness of their functioning is inextricably
entwined with the reputation and prestige of the United States in the foreign
policy field.h[12] In sum,
smooth United States-Latin American relations increased the ability of the
United States to implement its global foreign policy.
Two nations in
particular resisted Washingtonfs efforts to form an open hemisphere. The 1944
Guatemalan and 1952 Bolivian revolutions attempted experiments in gnational
capitalism.h Not a form of total autarky, this type of capitalism prescribed
state intervention in the economy as a means of implementing an economic policy
to promote the betterment of the non-elite classes.[13] Guatemala
and Bolivia aimed to achieve these goals by asserting more control over their
national resources, constraining the activities of foreign investors,
and\especially in the case of Bolivia\diversifying their economies. Economic
nationalists in these countries desired increased diversification of their
nationfs economy as a means of promoting stronger economic growth over the long
term and the betterment of the non-elite classes.[14]
The norteamericanos[15] in the 1950s
introduced a new tool for fighting nationalism: economic aid. Bolivia and
Guatemala became the two highest Latin American recipients of grant economic
aid during the Eisenhower Administration.[16] Stacy May, a
member of the Operations Coordinating Board, noted in 1955, gwithin Latin
America, our record has been one of offering the most generous assistance to
those nations that have departed most widely from what we regard as sound
practice.h[17] Washington
used such assistance in combination with other techniques to attempt to thwart
nationalistic policies in these two Latin American nations. In the early 1950s,
it appeared that this policy was successful. The policyfs flaws were not fully
apparent until the late 1950s and 1960s. U.S. efforts to thwart economic
nationalism contributed to rising anti-United States sentiment and political
instability which in turn contributed to the disintegration of democratic
governments in the two nations.
Previous interpretations
of United States-Guatemalan relations in the 1950s focused on U.S.
anticommunism.[18] Some works attempted
to put the policy in a broader context of U.S. foreign policy; others carefully
examined U.S. intervention in the 1954 coup (or gliberationh) itself.[19] Although
U.S. officials feared communists in certain Guatemalan agencies immediately
before the 1954 coup, the argument in this paper will attempt to put U.S.
policy in a broader historical context and center on U.S. attempts to thwart
nationalism both before and after the coup.
In 1944, a revolution
swept Jorge Ubicofs military dictatorship out of power. Ubico had sown the
seeds of his own destruction. His policies promoted economic growth; the main
beneficiaries were the elite and, to some extent, the middle class. The 1944
revolution was led by the middle class that was largely a creation of Ubicofs
economic policies.[20] The
international situation also contributed to the dictatorfs demise: World War II
made life difficult for dictators in the Allied camp; for example, President
Franklin Delano Roosevelt, admired by Latin Americans, compellingly spoke of
peace, freedom, and prosperity for all in his famous January 1941 gFour
Freedomsh speech. Such rhetoric inspired Guatemalan revolutionaries who desired
a more equitable economic system and a more responsive political structure.[21]
A former schoolteacher,
Juan José Arévalo, was elected president in a relatively free and open election
in December 1944, and moved quickly to implement reforms to make Guatemalan
capitalism more responsive to the majority of the people. A national bank, a
social security system, an institute for economic development were founded;
political parties flourished, and freedom of speech and press prevailed.
Perhaps most important in light of future events, workers were encouraged to
organize and bargain collectively.[22] Initially,
State Department Latin American hands did not object to the revolution. U.S.
Ambassador to Cuba Spruille Braden applauded the new democracy in Guatemala;
Assistant Secretary of State and former Roosevelt gbraintrusterh Adolf A. Berle
thought that the revolution did not harm U.S. interests.[23]
In part, Berle was
right. The Arévalo regime passed laws favorable to U.S. investors and generally
supported United States foreign policy initiatives. A 1947 law promulgated
under Arévalofs regime, Decree Number 459, gave economic incentives to foreign
capitalists who wanted to export capital and goods to Guatemala.[24] Arévalo
supported, rhetorically, U.S. efforts in the Korean War.[25] His and his
successorfs administrations generally supported the norteamericanos in
the United Nations.[26]
In many respects,
however, Guatemalafs foreign policy challenged U.S. goals for intrahemispheric
relations. Conflicts cropped up at inter-American conferences. When the
American states met in 1947 to sign the Rio Pact, the Guatemalan delegation
introduced a proposition opposed by the United States representatives. The
Guatemalans asked that the final agreement contain language that required the
signatories gto abstain from lending aid, direct or indirect, to any aggression
or attempts thereof against one or more of the other signatory states and
prevent, in their territory, the exercise of any objectives which aim to change
the constitutional regime of the others by means of force.h[27] The members
of the U.S. delegation thought that it was impossible to frame a complete
definition of aggression, gparticularly at a time when the forms of aggression
are less foreseeable than ever, and that to include some and exclude others
would lessen the effectiveness of the treaty and give an advantage to would-be
aggressors.h[28] In the end,
the U.S. won. The treaty defined aggression as simply gunprovoked armed
attack.h
At the 1948 Bogota
conference, where the Economic Agreement of Bogota was signed, U.S. officials
proposed an article to the agreement that expropriations of foreign nationalsf
property be compensated in a gprompt, adequate, and effectiveh manner. Members
of the U.S. delegation proposed this language to safeguard U.S. investments in
Latin America. Guatemala, along with Mexico, Argentina, Uruguay, Cuba,
Venezuela, and Honduras argued that gprompt, adequate, and effectiveh
compensation for expropriated properties of foreigners should be interpreted by
each country separately, according to its own constitution. The language
proposed by the Latin American nations was voted down, however, by a 14 to 5
vote.[29] Also at the
Bogota conference, the Guatemalan conferees opposed a United States-introduced
measure that stated the g[s]tates therefore agree not to take unjustified, unreasonable
or discriminatory measures that would impair the legally acquired rights or
interest of nationals of other countries in the enterprises, capital skills, or
technology they have supplied.h Guatemala feared that the resolution,
ultimately accepted into the agreement, would be used by foreign investors to
argue that they were not subject to the laws of the host country.[30]
Guatemala challenged the
United States in other ways, in particular in the area of foreign economic
policy. Although Arévalo desired foreign capital, he also promoted reforms that
in some cases created a chilly environment for such capital, and,
concomitantly, United States-Guatemalan relations deteriorated. Arévalofs
policies required that foreign capital benefit the majority of the Guatemalan
people; sometimes this stipulation restricted the activity of foreign
businessmen. The U.S. government was distressed that concessions to foreign oil
companies were only allowed under certain, narrowly-defined conditions.[31] More
significantly, Guatemalan workers began to exercise their new right to
organize, bargain collectively, and strike. Arévalofs labor code, introduced in
1947, was particularly stringent vis-à-vis companies with more than 500
employees. The United Fruit Company (UFCO) argued that the law was aimed
specifically, and therefore prejudicially, at itself, and the State Department
backed up this charge. Management-worker friction hampered production by U.S.
companies operating in Guatemala, most notably UFCO and the International
Railways of Central America (IRCA).[32] UFCO owned a
controlling interest in IRCA. It could ship its goods on the IRCA railways at
preferential rates. Even more advantageous for UFCO was the IRCA monopoly on
lines that formed the only means of transportation connecting the Atlantic
Coast with the capital. The companies could effectively control Guatemalafs
trade.[33] Guatemalans
resented Washingtonfs efforts to stymie reform efforts that affected the
interests of U.S. companies; the Guatemalans had witnessed for decades UFCOfs
siphoning off of valuable resources. In his 1950 farewell address, Arévalo
bitterly noted how the United States frustrated at every turn his attempts at
reform.[34]
Arévalofs successor, Jacobo Arbenz
Guzmán, extended and deepened the reforms of his predecessor. In his 1951
inaugural address, Arbenz stated that he intended to raise the standard of
living of the people and protect the nationfs industry and freedom from foreign
domination. This was critical, he argued, in his quest to create a gmodern
capitalistic country.h[35] In 1951, he
initiated the construction of the Atlantic Highway from Guatemala City to
Puerto Barrios on the Atlantic coast. This new thoroughfare directly competed
with the IRCA railway that ran parallel to it; IRCA was understandably unhappy
at losing its monopoly position.[36] In addition,
Arbenz financed the construction of non-foreign owned power plants to break the
United States-controlled companiesf domination of the electricity-generating
industry.[37] Labor
strife, which had occurred under Arévalo, continued; the Department of State
claimed gpolitical disturbancesh (most notably strike violence) made investors
uneasy.[38] As a result,
U.S. investment declined.[39]
U.S. economic aid also quickly diminished to a trickle. The decline began under Arévalo but squeezed Arbenz much harder. Point Four technical assistance was not extended because the State Department said that the Guatemalans criticized such aid as an example of U.S. gimperialism.h[40] In 1951, the United States stopped subsidizing the construction of the Guatemalan portions of the Inter-American highway.[41] U.S. technical assistance for health and sanitation and education dropped from a peak of $483,000 in fiscal year (FY) 1948 to $50,000 in FY 1954, with the sharpest declines taking place when Arbenz took office.[42] Total U.S. economic aid to Guatemala fell from $2.9 million in FY 1949 to $0.2 million in FY 1954.[43] Policymakers intended, with these cuts, to weaken Arbenz. In 1951, a State Department memo noted, gThese pressures will be quietly imposed and queries by Guatemala, if any, will be explained on grounds of technicalities. We will not, for the present at least, relate them to our concern over political developments there and will leave it to the Guatemalansf own reasoning to draw this conclusion.h[44]
Falling U.S. aid hurt
Guatemala. Arbenz, however, continued to pursue his reform policies. The
Agrarian Reform, passed 17 June 1952, culminated eight years of slow but steady
Guatemalan reform and, concomitantly, marked the nadir of post-1944 United
States-Guatemalan relations. In the words of the Ambassador to Guatemala,
Rudolf E. Schoenfeld, the law threw ginto political controversy issues which
strike the roots of the countryfs economic and social organization.h[45]
Significantly, these roots had been recently examined in a 1951 International
Bank for Reconstruction and Development (IBRD) report. In the words of the
authors of the report, g[i]n the long view, however, the basic poverty of
Indian highland agriculture permanently hampers not only agricultural progress
but the whole economic growth of Guatemala; for the Indian population comprises
the bulk of the potential internal market, without which industry cannot
develop adequately.h[46]
The reform, which was
passed as Decree 900, legislated a more equitable distribution of land, and
began resolving the problems outlined in the 1951 report.[47] Much of
Guatemalafs arable land was owned by large, foreign-owned companies, most
notably UFCO, and much of this land lay fallow, in part to prevent competition
from springing up to threaten UFCOfs near-monopoly position.[48] Decree 900
stipulated that all properties larger than 660 acres that were not being
cultivated would be affected by the expropriation. The law required UFCO
initially to give up 234,000 acres of land, 8.2% of the land it held fallow.
The nationalized lands would be rented or granted as private plots to
individuals. The plots were to be less than 43 acres and were not to be sold.[49] The Arbenz
government offered a $1.2 million indemnity based on the companyfs
self-declared valuation of the land for tax purposes. The payment was to be in
bonds amortized over 25 years. UFCO responded that 25 years was too long and
therefore the reform amounted to an expropriation without compensation. The
company also thought $1.2 million too low; the U.S. government, acting for the
company, requested $ 16.5 million.[50]
To Guatemalan officials,
the land reform was imperative in order to lead their nation out of its
condition as a stratified society with a stagnant economy. The Guatemalan
Ambassador to the United States asserted that the gpermanently unproductive
stateh of fallow lands owned by large landowners, foreign or not, gwas causing
great injury to the people and economy of Guatemala by preventing the
profitable development of those lands from helping to increase production and
raise the standard of living of the Guatemalans.h[51]
U.S. officials believed
the opposite: such land reform, perhaps the most serious challenge of any
Central American nation to United States domination of the regionfs economy,
endangered the stability of the isthmus. In late 1953, Charles R. Burrows of
the Bureau of Inter-American Affairs argued, gGuatemala has become an
increasing threat to the stability of Honduras and El Salvador. Its agrarian
reform is a powerful propaganda weapon; its broad social program of aiding the
workers and peasants in a victorious struggle against the upper classes and
large foreign enterprises has a strong appeal to the populations of Central
American neighbors where similar conditions prevail.h[52] In addition,
State Department officials strongly criticized the reform because of the way it
was implemented. Two months after the promulgation of the reform these men
worried that gthis social change was to be forced through without regard to
constitutional safeguards of private property.h[53] A State
Department aide-mémoire concluded the reform represented a g[v]iolation of the
basic norms of justice that cannot fail to undermine mutual confidence without
which economic progress is retarded.h[54] The
differences over the land reform were the crux of the acrimonious conflict
between Guatemala and the United States in the early 1950s.
The Agrarian Reform
culminated a decade of Guatemalan attempts to force foreign investors to share
a larger portion of their earnings with the Guatemalan people, particularly
landless peasants. Unfortunately for the Arbenz regime, the high-water mark of
Guatemalan reform efforts occurred simultaneously with the zenith of the
extreme anticommunism of Joseph McCarthyfs Washington. One energetic lobbyist
for UFCO was crucial in both tagging Arbenz as communist and convincing the
National Security Council that it should install a Guatemalan leader amenable
to foreign-investment driven capitalist development. This official, the former
New Dealer Thomas G. Corcoran (gTommy the Corkh), had, by the 1940s, left
government service to become a lobbyist for UFCO.[55]
As the anti-Arbenz
sentiment in Washington intensified, and it became clear that the land reform
was going ahead as planned, Eisenhower took action. In August of 1953 he
approved a plan to oust Arbenz from power.[56] The
much-publicized arms purchase from Czechoslovakia in May 1954 simply made
implementation of this plan easier to sell to the United States and world
publics. A desperate move on Arbenzfs part to obtain arms in the face of a
six-year-old U.S. boycott, the purchase lent credence to those arguing that
Guatemala was a beachhead for Soviet intervention in Central America. U.S.
covert, paramilitary support supplied by the Central Intelligence Agency (CIA)
in late June and early July of 1954 provided crucial help for the success of a
revolt that installed a regime friendly to the United States, headed by Colonel
Carlos Castillo Armas. The Guatemalan Army, in large part, did not attempt to
stop the rebellion. It intensely disliked Arbenz, and feared rising rural
violence and increased campesino political power.[57] Soon after
assuming power Armas returned UFCOfs expropriated land; as the centerpiece of
his plan to revive the Guatemalan economy the new leader wanted to create a
friendly climate for foreign, particularly United States, capital.[58]
Although U.S.
policymakers identified nationalism as the driving force behind Guatemalafs
policy between 1944 and 1954, after 1953 they also were concerned about
communism. This change can be measured by examining two State Department
reports written three years apart in the early 1950s. A State Department Office
of Intelligence Research (OIR) report dated 23 October 1950 pointed out that
strong Guatemalan institutions, most notably the Catholic Church and the Army,
constituted major forces against communism. The report stated that gthe
pro-labor laws do not in themselves appear to be communistic.h Regarding United
States-owned industries, gthe tendency of the administration and of the courts
to take the side of the workers in controversies involving foreign-owned
companies such as the United Fruit Company and the International Railways of
Central Americah was gbasically one of nationalism.h The report concluded that
Arévalofs government was gintensely nationalistic.h[59]
Three years later the
analysis was different. In a 1953 OIR report State Department officials stated
that communist infiltration had increased significantly since Arbenz assumed
the position as head of state. The authors of the report stated the communists
ghave heavily infiltrated the Social Security System, the Agrarian Department
and the propaganda agency.h They also noted that Guatemalan communists
constituted a focal point for communist activity in the region and supported
Central American communists outside Guatemala. The report concluded, however,
the Guatemalan voting record at the United Nations had gimprovedh since 1951.[60]
Although U.S. officials
were concerned about communism in the Guatemalan labor movement and in some
government offices, U.S. opposition to Guatemalafs policies did not hinge on
the perceived communism of the nationfs reforms. U.S. opposition to Guatemalafs
polices began before State Department officials ominously intoned that
communism was a problem in Guatemala. And as late as March of 1954 U.S.
officials publicly acknowledged that communists did not control the Central
American nation. Secretary of State John Foster Dulles stated that no Latin
American country was under communist domination.[61] More
importantly, U.S. policy was not driven by fears of Soviet domination of
Central America. On the eve of the 1954 coup Dulles told a group of Latin
American diplomats it was gimpossible to produce evidence clearly tying the
Guatemalan government to Moscow.h[62] Moreover,
State Department officials stated that gin any analysis of the situation in Guatemala
it must be recognized at the outset that evidence that the Communist Program in
Guatemala has been organized and directed in the world capitals of communism,
and that communism in Guatemala is part of a world apparatus, must be largely
circumstantial.h[63] In order to
sell the policy at home and abroad, the United States stated it was attempting
to prevent the expansion of Soviet power in Guatemala.[64] Despite the
rhetoric, Washington officials in the 1950s were mainly concerned with the
economic policies of the Guatemalan government.[65]
The aftermath of
Castillo Armasfs 1954 golpe has not been examined extensively by
scholars.[66] Analysis of this
period is not just important in the context of United States-Guatemalan
relations; it proves important in understanding the assumptions underlying U.S.
policy toward the entire hemisphere. In Guatemala, Washington assumed that a
more open economy, with the help of economic aid, could produce strong economic
growth and political stability. By 1959, this postulate was proved false.
Thwarting nationalism in
Guatemala was the centerpiece of U.S. efforts in Guatemala. In 1955, embassy
officials in Guatemala sent a memo back to the State Department warning that
gexaggerated nationalismh was on the rise in Guatemala. The officials meant
that anti-United States demonstrations were occurring in Guatemala with
increasing and disturbing frequency:
[s]imultaneously,
there has...been a steady revival of the atmosphere of exaggerated nationalism
with anti-United States overtones which characterized the gRevolution of 1944h
era. This has been exemplified in a series of incidents ranging from last
Decemberfs near-revolt of the Constituent Assembly against ratification of the
United Fruit contract through this Easterfs anti-U.S., anti-Castillo student
parade, to the current protest of the Engineerfs Association against the
governmentfs awarding contracts to U.S. engineering consulting firms.[67]
U.S.
officials attempted to fashion a policy to attack this nationalism. The policy
would have two prongs, one military and the other economic. Military assistance
was given to foster internal stability; economic aid, in order to spur private
foreign investment. U.S. officials perceived the latter as the touchstone of
strong economic growth and long-term political stability.[68]
Norteamericano officials
intended the Armas regime to be a showcase for the Cold War. In the words of
Assistant Secretary of State for Inter-American Affairs Henry F. Holland, the
United States wanted to gdemonstrate the superiority of the free world system
over communism, form which the Guatemalan leader, Colonel Castillo Armas,
liberated his people last year [1954]. The U.S. is giving its utmost
cooperation to Guatemala in its efforts to attain this goal.h[69] More
importantly, however, Washington officials wanted to prove that the new regime
was more beneficial to middle class and poor Guatemalans than was its nationalistic
predecessor. Near the end of 1956, U.S. Ambassador to Guatemala Edward J.
Sparks, in a letter to the newly-appointed Assistant Secretary of State for
Inter-American Affairs Roy R. Rubottom, Jr., reminded him that gworld opinion
believes that the United States was responsible for the overthrow of the Arbenz
regime...and the United States press in general...think that we have a special
responsibility for the success of the new government.h He forcefully concluded,
gif the Guatemalan people...are not convinced that they are enjoying a fuller
and better life than they had under the Arbenz regime, the Castillo Armas
Government will have failed in its declared purpose and political stability
will not have been strengthened.h[70] The
techniques the United States used to pursue this policy changed over the course
of the decade.
The First Hurdle: gA
Growing Number of Unemployedh
The first challenge was
to increase economic growth quickly and reduce unemployment. The economic
health of the country had suffered because of the Arbenz regimefs hasty weapons
purchase in its last months.[71] U.S.
officials succinctly summarized the short-term goals of United States policy:
(1) The
disruption of the economy and continued lack of confidence has produced a
growing number of unemployed whose existence aggravates the instability of the
situation.
(2) This
dissatisfaction and instability gives rise to active internal political
opposition, which is always ready to exploit weakness.[72]
In order to build
gconfidence,h U.S. officials aimed to make the economy more attractive to
outside investors. One way was to build infrastructure. The initial U.S. aid
allocations were concentrated on road-building. Road construction not only
created infrastructure, but it was a way of quickly employing a large number of
people. Indeed, U.S. ambassador Edward J. Sparks thought that, in the short
term, the existence of the Castillo regime rested on the increased employment
of Guatemalan workers. He wrote to the Deputy Assistant Secretary for Inter-American
Affairs, Roy R. Rubottom:
[w]hen we
undertook to assist Castillo Armas after he came to power in July 1954,
available economic data was meagre, projects had not been studied, and the
immediate necessity was to aid the Government to stay in power by assisting it
to resolve some of the most pressing problems threatening its stability,
including that of widespread unemployment and a depleted treasury. For these
reasons, the bulk of the development assistance for Fiscal Year 1955 was
assigned to the Pacific Slope Highway.[73]
The
road-building program was also part of a longer-term development plan.
According to officials at the United States Operations Mission (USOM) in
Guatemala, the organization in Guatemala City that implemented aid programs,
g[t]his [road] program should serve to open up new sources of production and to
improve the marketing of commodities which can be produced in areas of
difficult accessibility.h Most of the construction was to occur in FY 1956 and
FY 1957: $3.675 million was allocated for FY 1955, $10.261 million for 1956,
and $4.0 million for 1957.[74]
gInternal Securityh and
Military Aid
A second way Washington
attempted simultaneously to defeat nationalism and promote stability in
Guatemala was through military aid. Military aid had been withheld in 1948
which prompted the Guatemalan government to look elsewhere for matériel,
including a much-publicized purchase from Czechoslovakia in May 1954. After
Armas came to power, the flow of military aid to Guatemala resumed in order to
support his regime.[75] Two
bilateral agreements giving military assistance were signed, one in 1954 and
one in 1955.[76] U.S.
officials, in the language of the bilateral military aid treaty, left no doubt
about why they gave the money. The first agreement, entitled gTransfer of
Military Equipment to Guatemalah and dated 30 July 1954, stated that the
assistance was given, in part, to increase the political stability of
Guatemala:
[s]uch equipment and materials that may be provided to the Government of Guatemala under this agreement are required for and will be used solely to maintain Guatemalafs interest security, its legitimate self-defense, or to permit it to participate in the defense of the area of which it is a part, or in the United Nations collective security arrangements and measures, and Guatemala will not undertake any act of aggression against any other state.[77]
Castillo
Armas could, and did, use the aid to gmaintain...internal security.h In
practice, he used the assistance to quell dissent.[78] In addition,
the assistance increased the political influence of the Guatemalan Army, gthe
key factor in Guatemalan politics,h according to the Department of State.[79]
Maintaining ginternal
securityh proved at times to be brutal. U.S. military assistance helped to support
a repressive police system in Guatemala. In 1954, after the golpe, the
CIA help set up the Comité Contra el Communismo to track down and, in
some cases, kill suspected communists. The efforts of the committee went beyond
simply attempting to round up communists. Because gcommunisth came to mean
almost any dissenter, the committee detained many noncommunists who opposed the
Armas regime.[80] This intense
effort to quell dissent bordered, at times, on the psychopathic. The
International Cooperation Administration (ICA), the Washington agency that
coordinated aid policy, in a report on the police system, said gthe ever
present driving thought is the ealertf to communist activity and attack...
[T]he preparedness and functional operatives are more and more directed
toward...near-obsessive-compulsive acts closely bordering on the neurotic.h[81] The report
continued:
[i]t may be
assumed...that the primary policy function of protecting life and property, and
preserving the peace, is in reality a secondary function of the police
administration and executive management. Operations top level planning,
intelligence gathering activities, are singularly directed toward alertness and
preparedness against ethe threat of the communists,f instead of being directed
against the army of criminals.[82]
The key assumption of
U.S. officials was that if the Guatemalan government created a friendly
environment for private foreign investment, the Guatemalan economy would grow.
Economic aid could help this process work, but it was no substitute for the
private sector. Thomas Mann, a State Department official who, in 1954, was
second-in-command at the U.S. embassy in Guatemala City, summarized the
prevailing ethos of the Eisenhower Administrationfs Latin American economic
policy: g[i]n the long run it is private enterprise which must supply the
capital this country needs. It would be a small price to pay if...[economic
aid] should prepare the way for developments of this kind.h[83] State
Department officials thought that Arbenzfs policies had gharassed and
frightenedh investors and thus hurt the Guatemalan economy.[84] They urged
Armas to open up the nationfs economy to foreign private investment. Armas
publicly agreed with U.S. officials that such investment was key for Guatemalan
development.[85]
Economic aid could prove
useful for coercing Guatemala to promulgate policies that Washington officials
desired. Mann advocated using the aid as a lever to ensure the nationfs
economic policy would be receptive to U.S. capital, particularly investment in
petroleum. Mann noted the United States successfully used its leverage as an
aid donor to influence Bolivian legislation regulating investment in the oil
industry.[86] Castillo
Armasfs repeal of the Arévalo-Arbenz pro-labor legislation helped to make the
environment for foreign private investment more inviting. The Guatemalan
leaderfs efforts paid off: the number of U.S. firms operating in Guatemala rose
from eight in 1950-54 period to 32 in the 1955-59 period.[87]
The trade policies that
State Department officials recommended for Guatemala complemented the
departmentfs recommendations regarding private foreign investment. Washington
urged Guatemala to lower tariffs, especially gproducts which are essential in
the daily life of the people\and which are not produced in the country or are
not produced in anywhere [sic] sufficient quantities.h Policymakers also urged
that duties be eliminated on gcertain products which are important in improving
and expanding Agriculture\the countryfs main income producer and provider of
exports.h In this regard, the department noted that, in particular,
gagricultural machinery and fertilizersh and gpurebred cattle and other farm
animalsh should be free of tariffs.[88]
In order to better attract
foreign investment, State Department officials crafted an overall development
program for Guatemala. U.S. officers stated the program was to promote
gpolitical, economic and social stability.h To accomplish this, economic aid
had to promote a stronger and more diversified economy; improved health,
education, and general welfare; and a more efficient government. These goals
were to be met without bankrupting the Guatemalan or United States treasuries.[89] In early
1955, Foreign Operations Administration officials stated:
[t]he
objectives of economic development programs includes [sic] (a) helping the
Government of President Castillo Armas modernize and diversify both
agricultural and industrial parts of the economy, such as assistance in
establishing a modern credit system, and providing assistance and information
on machinery pools, productivity, etc. (b) relieving budgetary pressure (to
decrease year by year) in order that, substantial investment can be made as
soon as possible in heavy items of expenditure such as roads,
telecommunications, power, etc.
[Also,] the
objective of technical assistance programs is to make available to an ever
increasing number of the population, the benefits which the U.S. people have
come to regard as a natural and appropriate inheritance. These are mostly direct
benefits to the people in fields of agriculture, health, education, etc.,
which will enable them to rise above mere subsistence level, to become
healthier, to become better equipped educationally, socially and materially to
successfully encounter problems attendant to technical advances. There are, of
course, indirect benefits resulting from programs to better [sic] public
administration, to better industrial practices, to better social and community
techniques.[90]
In order to promote a
higher standard of living amongst the Guatemalan people, aid officials realized
the aid program must target a critically important sector of the Guatemalan
economy: the agricultural sector. Stimulating agricultural production was a key
element of the plan. U.S. aid officials on site in Guatemala stated that the
[f]irst priority in the Guatemalan
Program is to improve agricultural productivity, increase agricultural
production in such a way as to raise the standard of living generally, increase
farm income and establish a nucleus agricultural middle class. This is
reflected in the Rural and Agricultural Development Programs. The government of
Guatemala with U.S. aid is colonizing faint families on a permanent basis,
building access roads, introducing mechanization, building irrigation systems,
etc. The program is being concentrated primarily in the rural areas of
Guatemala.[91]
Agriculture
was specifically targeted because spurring agricultural growth could produce a
number of benefits:
Guatemala is
essentially all agricultural country. It produces practically all of its food.
Agricultural products account for 95% of its export trade. Further, agriculture
is an industry amenable to spectacular improvement. It can raise the living
standards of the Guatemalan people. Hence, a major objective of the FOA
[Foreign Operations Administration] program is the improvement of agriculture
through the development of basic food crops and animal industry. This includes
seed improvement, crop protection, agricultural processing, aid studies of
soil.[92]
Specifically, the U.S.
mission in Guatemala aimed to achieve its goals in agriculture by increasing
small private land holding through utilization of undeveloped government lands and
diversifying cash crops. U.S. officials thought supplying technical advice was
key gbecause development of agriculture is dependent on private investment,
initiative and efforts.h[93] The
development plan called for both the development of food crops and agricultural
products for export.[94]
Funding for these
projects came from the United States and multinational organizations. Normally,
policymakers expected underdeveloped countries to go first to the multinational
organizations when seeking funding for development projects. The World Bank, a
key source of Guatemalan development aid after 1954, shared many if not most of
the assumptions of U.S. policymakers. Some U.S. officials doubted, however,
that international lending institutions could promote foreign investment-led
development quickly enough without creating havoc in the Guatemalan financial
system. Not only were loans from international institutions limited, tending
might hurt Guatemala because it would have to extend the payback period for
existing bonds or borrow money against its reserves, actions that would not
promote Guatemalan fiscal integrity. Hence the State Department gave special
U.S. grant aid for Guatemala. (Only a small portion of U.S. aid for Guatemala
during this period had to be paid back.) State Department officials feared
political and social instability would overtake Guatemala unless a broader
range of projects\the technical assistance efforts\were started very quickly.[95] During the
first two and a half years of the economic aid program, the World Bank provided
$12.7 million in aid; the U.S. Bureau of Public Roads supplied $15.7 million
for building the Inter-American highway; the United States supplied $26.9
million through the ICA and the FOA; and the United Nations (specifically UNICEF)
supplied $0.6 million.[96]
Between 1953 and 1961,
the Eisenhower Administration ensured that $138 million of aid mowed to
Guatemala directly from Washington and international organizations that
Washington funded. Guatemala became the second largest recipient of grant
economic aid during an administration that aimed to cut spending. Soon after
Eisenhower entered the White House, a NSC report intoned, gThe survival of the
free world depends on the maintenance by the United States of a sound, strong
economy. For the United States to continue a high rate of Federal spending in
excess of Federal income, at a time of heavy taxation, will weaken and
eventually destroy that economy.h[97]
Guatemala became
dependent on U.S. assistance. Although assistance was reduced during
Eisenhowerfs second term, it was not entirely cut off. In fiscal year 1956 and
to Guatemala reached $34.4 million; it dropped to $19.0 million in 1957 and
fell to $17.3 million in 1958. In 1959, it was cut again to $12.4 million.[98] When the aid
flow was reduced, the economy suffered. The reduction in aid was especially
painful as it occurred as coffee prices fell. Based on an index where 1951
equals 100, the price of coffee was 83.5 in 1958 and fell to 67.5 in 1959 and
67 in 1960.[99]
Although foreign private investment and economic growth increased in the Central American nation,[100] in broader, more significant ways Washingtonfs policy failed. The poor were economically worse off than they were in the early 1950s and political stability had deteriorated. Life for the peasants became much worse; their income had declined and the number of landless peasants had increased.[101] Most critically, per capita production of food was level throughout the decade and fell at the end of Eisenhowerfs time in office.[102] In general, the economy was weak. Increased flows of public and private capital in the 1950s pushed Guatemalafs demand for imports above its ability to pay for them. Guatemala had to go into debt to pay for this increased demand for foreign goods. At the end of the 1950s, although the Guatemalan economy had expanded the production of a number of export crops, notably cotton, sugar, meat, and vegetables, it was still basically a monoculture: it remained dependent on one crop\coffee\for over 66 percent of its foreign exchange earnings.[103]
U.S. policies directly
contributed to Guatemalafs problem of paying for its increased stream of
imports. Even a top U.S. official recognized this. The U.S. Ambassador to
Guatemala City, Lester D. Mallory, pointed out to his superiors at Foggy Bottom
that Guatemala was spending a portion of its foreign exchange on imported eggs.
Eggs could be inexpensively produced in Guatemala if there was a suitable
supply of feed for the chickens. The easiest and least inexpensive way to
produce this feed was from the by-products of flour milling.[104] However,
when the Guatemalan government tried to increase restrictions on flour imports
to protect and stimulate the local production of flour, Secretary of State
Dulles remonstrated that such barriers contradicted U.S. policy. In a succinct
statement of the rationale behind Washingtonfs efforts to get Guatemala to open
up its economy to foreign goods, Dulles stated:
industries which are able to survive only with the assistance of continued excessive protection will not contribute substantially to the economic development of a country. The use by the Government of Guatemala of extensive restriction against the importation of flour, and the possibility of further protection, has serious repercussions on trade relations and creates problems for Guatemala as well as for flour exporting countries. Local consumers are deprived of the benefits of competitive prices, while any possible saving of foreign exchange would generally be obtained at the expense of efficient and economic use of available resources and at the expense of efforts to promote international trade.[105]
Between 1953 and 1959,
Guatemala imported 47.6% of its wheat flour, 146,800 metric tons. The United
States provided a significant portion of these imports. In fiscal year 1959
alone, U.S. exports of wheat flour to the Central American nation totaled 3,900
metric tons.[106] g[E]fficient
and economic use of available resourcesh apparently meant increased U.S.
exports and Guatemalan dependency on the United States.
There were other
ramifications of Washingtonfs policy of promoting U.S. exports to Guatemala. In
order to obtain loans from the U.S. Development Loan Fund, recipient nations
could gnot expend foreign exchange on luxury items from abroad...[which] may be
grown or produced within the country.h Eggs were categorized as such an item.
Not only did the U.S. policy cause the Guatemalans to purchase an imported good
that it could inexpensively produce at home; it also made it more difficult for
the Guatemalans to tap the DLF as a source of public financing for
industrialization. In addition, Mallory also noted that Washingtonfs attempts
to lower Guatemalafs tariffs on its imports directly contradicted U.S. efforts
to increase private foreign investment in Guatemala. Lower duties would hurt
not only domestic but foreign industry. The ambassador concluded that although
U.S. policymakers were rhetorically committed to promoting Guatemalan
development, their actions proved otherwise. An exasperated Mallory, unsure of
the direction of the policy emanating from Foggy Bottom, concluded: g[t]he
basic problem which we face abroad is one of not becoming completely impotent
and obviously foolish by trying to say diametrically opposed things at one and
the same time.h[107] No evidence
has been found in the documentary record that State Department officials
responded.
The political situation
in Guatemala was as dismal as the economic situation. Political instability had
increased and was on the rise. Instability had been sown by the nature of the
1954 counterrevolution. Jealous army officers resented the special treatment
received by the garmy of liberationh and triggered uprisings after 1954.[108] Ten years of
relatively free and open political space, moreover, had opened peoplesf eyes
and minds only to have this space quickly eliminated in 1954. By 1959,
anti-United States sentiment was rising[109] and the
seeds were well-sown for revolutionary activity which erupted in that year.[110] Guatemala
was neither a showcase nor were the majority of its citizens better off than
they were under Arbenz.
Since the beginning of
the aid program, U.S. officials had desired a considerable degree of control
over Guatemalan economic affairs. In 1956, the year the United States dispensed
the greatest amount of aid to Guatemala,[111] Burke Knapp
of the IBRD asked Holland to what extent the United States thought it should
concern itself with gthe decisions in the economic field of the Guatemalan Government
and its development.h Hollandfs response was revealing. He replied, gthe United
States should participate from the moment the Guatemalans hit on an idea in all
phases of analysis and reaching decisions, drafting of plans or decisions\in
short, every phase of their planning as long as the United States government is
carrying the heavy responsibilities it is in that country...there is no aspect
of their internal affairs of which we should be aware, concerned, and
vigilant.h[112] By 1959, the
United States had lost what control it had had over the situation in Guatemala.
U.S. leaders wanted to reduce aid; but the Guatemalan government in 1958 and
1959 was maneuvering to increase the flow of aid. The head of the U.S. mission
(USOM) in Guatemala City, Oscar M. Powell, wrote to Rollin S. Atwood, the
Regional Director for Latin America in the State Department, that gin my
opinion, the present Government of Guatemala is permitting a build up of
strength by the extreme left at a rate which, if it is not stopped and
reversed, will shortly be too great for the government to control.h Powell
averred that the buildup could partially be explained by the desire of the
government of Miguel Ydígoras Fuentes to tap the United States for more aid. In
effect, the USOM chief maintained, the Guatemalan government was attempting to
manipulate aid officials: g[t]here is evidence to support the idea that the
present government leaders believe that if they let things get bad enough the
U.S. will be forced to make substantial additional sums of money available to
Guatemala.h
U.S. officials faced the
prospect of bailing out a government that had not adhered to Washingtonfs
formula for a stronger Guatemalan political system and economy. Powellfs
critique of the aid programs indicted the Guatemalan government for failing gin
several important respects to comply with its obligations under the aid
agreements. Land has not been made available to carry forward the rural
resettlement project and the government has long been delinquent in its contributions
to the Supervised Agricultural Credit Program. Balances in excess of $7.7
million allotted to these projects remain unexpended.h[113]
There were other
problems as well. Powell said that the Ydígoras Fuentes government was gbadly
organized and weakly staffed.h Corruption increased.[114] To make
matters worse, the Minister of Agriculture, Clemente Marroquín Rojas, publicly
demanded the Guatemalan government be given some authority over the servicio,
the United States-run office that helped administer the agricultural aid
programs that was paired with the Ministry of Agriculture. According to the
U.S. Ambassador, Marroquín Rojasfs gloud complaints that United States aid is a
enational shamef have wide appeal, even to persons who feel that United States aid
must be continued.h[115] The mission
chief ended his evaluation of the aid programs by stating that the efforts of
the past five years had been wasted. gIt is my judgement,h he said, gthat
Guatemala is not profiting from the ICA programs there in proportion to the
U.S. funds and efforts being invested in them. Nor do I believe that U.S.
interests are being advanced, or are likely to be advanced, under present
conditions there, through our aid programs in Guatemala.h[116]
A number of determinants
contributed to the failure of U.S. policy. Policymakers thought that increased
trade and investment could provide the foundation of a Guatemala that,
eventually, would not need economic assistance. The policy of increased trade,
however, proved detrimental to Guatemalan development as Mallory pointed out in
late 1958. Guatemalafs economic problems were exacerbated by the reduction in
economic aid after FY 1957. As the economy soured, aid dropped, political
stability rose, and anti-norteamericano sentiment grew, Washington turned
to the military. Military aid rose from less than $50,000 in FY 1959 to
$200,000 in FY 1960.[117]
On the surface, U.S. reaction
to the Bolivian revolution seems radically different from its policy toward
Guatemala. Instead of toppling a revolutionary government, Washington supported
it with, first, economic, and, later, military assistance. In one key way,
however, U.S. goals in the Andean nation were the same as for Guatemala.
Washington wanted Bolivia to provide a friendly environment for foreign
private-sector investment which they thought would spur growth, necessary, they
concluded, for political stability.[118] As in Guatemala,
the United States was fighting economic nationalism and exerted a great deal of
power to try to suppress it. In Guatemala, a combination of paramilitary force,
military assistance, and economic aid were used to pursue policy goals; in
Bolivia, only the latter two were employed.
Previous interpretations
of United States-Bolivian relations in the 1950s have stressed U.S. security
concerns. Washington officials, these scholars argue, wanted to prevent a
Soviet-backed communist regime from taking power in Bolivia.[119] Six months
after the 1952 revolution, however, U.S. diplomats in La Paz privately told
their British counterparts that they did not see a Soviet Union-backed
communist party coming to power.[120] The threat
they saw was economic stagnation and political chaos. To promote growth, norteamericano
officials believed, U.S. policy had to support the revolutionary government
with economic assistance; but some parts of the 1952 Bolivian revolution had to
be annulled. In fact, U.S. officials used their leverage obtained from the
dispensing of aid to roll back some of the revolutionary legislation. In this
Process, the United States helped to destabilize Bolivia to the point that it
seemed the nation was ready to disintegrate into chaos, exactly the crises the
United States had sought to avoid.[121]
In 1952, Bolivia erupted
in one of the few truly social revolutions in recent Latin American history.[122] The costly
Chaco War against Paraguay (1932-35), which Bolivia lost, was a cause of the
revolution; the war shook the credibility of the oligarchic-authoritarian
leadership as Bolivians (especially the middle class) began to question the
leadership of the regime.[123] In addition,
the bourgeoisie clamored for more state-funded projects which the
oligarch-dominated government did not provide. Middle and working class
resentment toward the tin barons and the military (known collectively as la
rosca) fed the popularity and increased the political power of the
broad-based Movimiento Nacionalista Revolucionario (MNR) party.
The MNRfs agenda
included agrarian reform, increased state control over the foreign-owned tin
mines, and economic diversification.[124]
Interestingly, a good deal of the MNR platform matched recommendations from the
State Department and the United Nations. A prominent State Department Latin
American expert, Merwin I. Bohan, led a team of experts on a mission to Bolivia
and argued in a 1942 report that the nation needed to diversify its economy and
improve its infrastructure. In order to spur self-sustaining development, Bohan
argued, Bolivia needed to build up its foreign exchange by both increasing
exports and, especially, decreasing imports. When Bohan was in Bolivia, the
nation was spending scarce foreign exchange on foodstuffs and agricultural
products it could produce at home.[125] A 1951 U.N.
paper (the gKeenleyside Reporth) argued that Boliviafs low agricultural
production resulted in part from the vastly unequal distribution of land.[126]
An important short-term cause
of the 1952 revolution was the falling price of tin and Bolivian efforts to
raise it. During World War II, the U.S. government negotiated an agreement with
the Bolivians to buy tin below the market price. To meet the large wartime
demand and earn sufficient foreign exchange the mine owners intensively mined
the easily-obtainable tin in the mines. At the end of the war, due to falling
prices, the mine ownersf profits dropped while U.S. power over the world tin
market markedly increased. The norteamericanos possessed the worldfs
largest smelting capacity and massive buffer stocks of tin. With the Korean
War, world tin prices rose sharply; Washingtonfs response was to force the
price down by selling off part of its stockpile while refusing to sign a contract
agreeing to purchase Bolivian tin. In 1951, the government of Bolivia halted
all tin exports (half of which went to the United States) to raise the price
and compel the United States to sign a contract. The strategy failed and the
Bolivian economy went into a tailspin.[127] The MNR
revolutionaries capitalized on the hard times. With the revolution on 12 April
1952, the constitutionally-elected MNR, prevented a year earlier from assuming
office by a military coup, was back in power.[128]
The MNR was divided into
a left-wing and right-wing factions. Two broad goals united the groups,
diversification of the economy and improvement of the Bolivian infrastructure,
as did two more specific goals, land reform and nationalization of the tin
mines. The factions differed in their ideas on foreign investment and
public-sector economic aid to Bolivia.
In the rural regions,
government leaders implemented land reform for moral, economic, and pragmatic
political reasons. Many argued that the feudal-like agricultural system
exploited the peasantry and should be demolished. Land reform was a
prerequisite, top MNR officials stated, for modernizing agriculture and
increasing output.[129] In addition,
the urban-based MNR was forced to implement land reform quickly because of
increasing unrest in the countryside. Some farmers were violently demanding
land.[130] The reform
stated that land must be gdevelopedh and there were limits to how much land a
single person could own. The revolutionaries tried to soften the blow to large
landholders by stipulating that indemnities were to be paid to those whose land
was expropriated.[131]
The strength of the
powerful left lay in the strong, well-organized labor unions. The preeminence
of the tin minersf unions was enhanced by their private militias which
collectively were more powerful than the small Bolivian Army, which was
decimated after the revolution. The flamboyant and charismatic leader of the
major Bolivian workersf organization, the Central Obrera Boliviana (COB), Juan
Lechín Oquendo, became Minister of Mines in the new revolutionary government.[132] The left
wanted the state to nationalize all the mines, railways, aid latlfundia
(large plantations) and wanted the workers to run these institutions. Finally,
the COB called for workers to occupy the factories.[133]
Conservatives countered
by advocating a mixed economy funded by both public and private capital. They
advocated foreign private investment in Bolivia, particularly in order to
increase oil production.[134] Oil sales could
provide the country with a source of foreign exchange and, some on the right
argued, dramatically increase the pace of Bolivian development.[135] The
right-wing members did not fear that U.S. dominance would come with its aid;
they argued that the United States simply wanted to promote growth in Bolivia
that was beneficial to both the Bolivians and the norteamericanos.[136] The rightist
faction also wanted to promote diversification by shifting labor from the
nationalized tin mines to agricultural pursuits. One member of the rightist
segment of the party, Walter Guevara Arze, realized the powerful labor leaders
would see this shift as a threat to their power; he admonished that the MNR
move cautiously in this regard in order to maintain harmony in the ruling coalition.[137]
Harmony proved
impossible to maintain on the issues of public-sector assistance and private
foreign investment, particularly U.S. economic aid. Leftists saw foreign
private sector capital and economic aid as a dangerous source of power that
could be used to control and exploit Bolivia, especially for its mineral
resources.[138] This sharp
disagreement, particularly over the desirability of U.S. public-sector aid,
severely weakened the MNR.
The issue of U.S.
recognition of the regime was complicated by the MNRfs advocacy of
nationalization of the three largest tin mines, all foreign-owned.
Nationalization, of course, greatly reduced the power of the tin barons whom
the MNR feared.[139] However, the
Bolivians also knew that the United States, which opposed the nationalization,
had to be appeased in order for the Government of Bolivia to obtain a long-term
tin contract with the United States, an agreement which was critical for the
health of the Bolivian economy. The Bolivians surmised that U.S. officials were
wary about tacitly accepting the nationalization by recognizing the new regime,
for fear of giving revolutionaries in other countries an incentive to
expropriate foreign-owned properties.[140]
The new government, in
particular its ambassador to the United States, Victor Andrade, assured the norteamericano
officials that the MNR was not anti-private property, anti-United States, or
pro-Soviet.[141] (The MNR was
not communist; it shunned the pro-Moscow Bolivian Communist Party members because
the communists had allied with the anti-MNR authoritarian regimes in the 1940s.[142] Some of the
members of the MNRfs left wing\most notably some of the leaders of the powerful
mine workersf union\were Trotskyites, but were not connected in any way with Moscow.[143])
The MNRfs assurances
laid the groundwork for U.S. recognition of the regime of Victor Paz Estenssoro
on 2 July 1952.[144] Regarding
indemnification, the Bolivians agreed to compensate foreign holders of the
companiesf equity who had invested in the tin mines before the revolution. The
Bolivian government did not think it was obligated to indemnify those who
invested after the revolution but before the nationalization became official on
31 October 1952. These investors, the MNR maintained, might have invested in
order to capitalize on the probability that Washington would attempt to coerce
Bolivia to reimburse U.S. investors after the nationalization took place.[145]
Without recognition, the Bolivians realized there was no chance they could receive economic aid from the United States. The Bolivians had received aid from the U.S. government before and thoroughly understood the process. The United States first gave aid to Bolivia in 1942. Before 1953, U.S. assistance was in the form of technical assistance which, in the words of Franklin D. Rooseveltfs Undersecretary of State Sumner Welles, comprised a key element of ga long-term plan of collaboration to foster continued mutually beneficial economic relations between the United States and Bolivia and to develop the natural resources of Bolivia.h[146] In 1941, the United States promised this assistance contingent upon Bolivian indemnification for 1938 confiscation of Standard Oilfs petroleum fields and physical capital.[147] Early in 1942, Bolivia promised to reimburse the company for its losses and U.S. officials, in turn promised to give the aid. In addition, technical assistance was also a way of securing raw materials, most specifically tin and tungsten, for the Allied war effort and keeping them out of the hands of the Axis.[148] Finally, technical assistance supported a variety of servicios or programs set up in Latin America by the U.S. Institute for inter-American Affairs. These cooperative programs were staffed by officials from the United States and Latin America and aimed to improve the health, education, farming, civil aviation, and roads of Latin America.[149]
During its first term, the Eisenhower Administration provided two types of aid, monetary grants in 1953 and food grants in 1954. The context in which the aid was given was significant. In 1953, Dr. Milton Eisenhower, the Presidentfs younger brother who advised the chief executive on policy toward the hemisphere, stopped in Bolivia during a trip through south America. Citing food shortages and imminently lower tin prices (the Korean War was winding down and demand would slacken), Bolivian officials pressed the influential younger Eisenhower for U.S. aid.[150]
Soon after Dr.
Eisenhower returned to Washington, President Eisenhower announced that the
United States would send economic aid to Bolivia. In a response to a letter
sent to him on October 1953 by Bolivian President Paz Estenssoro that requested
emergency economic aid (in particular food), Eisenhower stated that the U.S.
would allocate the requested assistance which was gintended to assist Bolivia
in this emergency and to help accelerate the economic diversification of your
country.h[151] Policymakers
expressed different opinions in private. Milton Eisenhower feared that without
assistance a strongly anti-United States regime might come to power.[152] The State
Department emphasized the influence aid brought. The gOutline Plan of
Operations with Respect to Boliviah maintained that g[u]nder the impact of
United States aid and assistance, the regime has become increasingly inclined
to accept United States viewpoints.h[153] These
gviewpointsh included U.S. admonitions that Bolivia keep its economy open to
trade and try to foster a good investment climate. In this sense, Bolivia
became a laboratory in which officials could apply their hemispheric policy.
In 1953, fears of
communism did not prominently figure into policymakersf considerations. Dr.
Eisenhower believed the MNRfs admonitions that it was not communist; nor did he
think a communist government would arise if the MNR fell. He stated in a letter
to his older brother, g[s]hould the present government fall, it seems probable
that it will not be succeeded by a communist government nor by a fascist one.h[154] U.S.
policymakers, instead, feared a chaotic situation in the case of the fall of
the MNR. Washingtonfs policies, including the aid policy, aimed to avoid a
disintegration of the Bolivian government while promoting policies that would
attract foreign private investment.
One area in which the policymakers
successfully opened up the Bolivian economy was the petroleum industry. Many
U.S. oilmen believed that Bolivia had rich, unexploited oil fields.[155] The State
Department wanted to funnel private sector investment toward Bolivia, and
rightist MNR leaders thought that foreign investment would spur oil production.
U.S. lawyers helped write the Petroleum Code.[156] Washington
ensured enactment of the code by threatening to cut assistance if the law was
not passed.[157] Private oil
firms, predictably, benefited from the code. It allowed the Bolivian
state-owned oil company, the Yacimientos Petrolíferos Fiscales Bolivianos
(YPFB), only 11% of the total oil field concessions. All oil fields were open
for current exploitation; the Bolivian Code was the only Latin American oil
code that did not cordon off some oil fields for future exploitation.[158] Other
provisions gave the private-sector oil companies first choice over which lands
to exploit.[159] Finally, the
code gave the private oil companies the right to market their products in
Bolivia, a grant that severely hurt the YPFBfs efforts in this area.[160] In part
because of the restriction on foreign exchange available to it under the
Stabilization Plan (see below), the state-run company lacked the financial
resources to rebuild worn-out capital. After 1957, YPFBfs production steadily
declined; it fell from 568,400 cubic meters to 413,800 in 1964. Foreign
exchange earnings from petroleum fell from $8.08 million per year over the
1952-1956 period to $4.10 million per year during the 1957-1962 period.[161]
U.S. policy took a
significant turn in 1954. In that year norteamericano officials began
giving food aid. This not only alleviated hunger in Bolivia, but helped to
reduce the U.S. governmentfs foodstuffsf storage costs. In an effort to assist
farmers, a powerful constituency, the government stockpiled agricultural
products to raise their prices.[162] Public Law
(PL) 480 aid began to flow to Bolivia in 1954. Unfortunately for Bolivia, U.S.
food aid partially thwarted one of the goals of the revolution, diversification
of the economy.
Much of U.S. economic
aid to Bolivia was given in the form of surplus foodstuffs. Between FY 1954 and
1961, 15.9% of U.S. economic aid was given in the form of foodstuffs; 47.8% of
assistance in FY 1955 was in the form of food aid.[163] Once in
Bolivia, the surplus agricultural goods were sold and the funds put in special
accounts to fund economic development projects. After 1957, some of the
proceeds were lent, at low rates of interest, to large U.S. companies that
invested in the developing world. An important part of PL 480 aid to Bolivia
was wheat flour, which had a predictable, and disastrous, affect on the
Bolivian milling industry. Flour imports shot up, increasing from $1.6 million
in 1953 to $9.2 million in 1961. This rise was particularly damaging because
the Bolivians wanted to reduce the countryfs dependency on food imports.
Boliviafs production of wheat flour plummeted, dropping from 58.7 million kilos
in 1953 to 6.1 million kilos in 1960.[164]
The Background to the
Stabilization Plan
The negative effects of
PL 480 aid were small, however, compared to the severe ramifications of the
United States-imposed 1956 Stabilization Plan. The plan aimed to address the
immediate crisis of the high inflation rate. The cost of living in La Paz rose
124% in 1954, 80% in 1955, and a record 179% in 1956.[165] At base, the
spiraling price rate was caused by shortages induced by the overvalued exchange
rate and the lower price of tin. The high exchange rate discouraged indigenous
production and encouraged imports. Shortages of key goods, including food,
occurred when foreign exchange earnings ran low.[166] Tin sales
were down because of lower post-Korean War demand and the declining ore content
of Boliviafs easily-exploitable veins.[167] These
problems afflicted in particular the Corporación Minera de Bolivia (COMIBOL),
the government-owned tin industry. The price of tin fell from $1.21/lb. in
January 1953 to $0.80/lb. in June 1954 while the cost of production remained
around $ 1.03/lb. As a result, COMIBOL ran deficits. COMIBOLfs financial
problems were exacerbated by a system of multiple exchange rates which forced
the tin-mining giant to sell its foreign exchange earnings to the Central Bank
at the low official exchange rate. During the early phase of the revolution,
between 1952 and 1956, the gap between the official and free-market rates grew
enormously.[168] COMIBOLfs
growing deficits were covered by drafts from the Central Bank. With an increase
in the amount of money in circulation, Bolivian inflation shot up.[169]
In order to stem the high inflation, in 1956, the United States designed and implemented a stabilization plan for the Bolivian economy. It required, among other things, that the Bolivian government cut wages and reduce the number of workers who worked in the mines. Washingtonfs goals, however, far exceeded simply dampening inflation. The overarching goal of United States officials was to use economic aid, which the poor nation desperately desired, as a means to coerce the Bolivians to frame economic policy along lines that squared with U.S. policy. The way this was done was through an ultimatum: U.S. aid would be cut if Bolivia did not adhere to the plan.[170]
Stabilization:
gBetween the
Economically Desirable and the Politically Feasibleh
The philosophy behind
the stabilization program was that Washington officials thought that if the
Bolivian government budget was cut and money supply controlled, inflation would
cool off and the economy would improve. Foreign investment would spur growth.
United States officials used the plan to promote greater openness of the
Bolivian economy and to turn back aspects of the revolution.[171]
Washington-imposed economic policies, however, did not produce the desired
results; instead, they split the Bolivian government and created political
instability. In 1959, the U.S. officials realized the plan had failed, feared
rising political strife in Bolivia, and saw United States-Bolivian relations deteriorate.
The 1956 Plan was
far-reaching. Washington tried to use its leverage from the economic aid it
gave Bolivia to force changes in policy that would not only reduce inflation
but, ultimately, make Bolivia a propitious environment for private foreign investment.
For example, the State Department desired that COMIBOL, the state-run tin
mining company, balance its budget aid reduce its work force. But the
department wanted to intervene in Boliviafs economy in more significant ways.
It sought to compel Bolivia to reduce gexcessive social reforms.h In addition,
Washington officials wanted the Andean nation to improve agricultural
production.[172] Addressing
these problems, Washington officials thought, was imperative for creating
conditions favorable for economic growth. Policymakers argued that once strong
economic growth occurred, Bolivia would not need constant infusions of aid.
Limiting aid was important to State Department officials since getting Congress
to appropriate aid funds was difficult.[173]
Eisenhower administration
officials realized the potential problems austerity could cause. William F.
Gray, First Secretary to the American ambassador in La Paz, realized that if
the United States made a number of stringent demands, the Bolivians might
reject the plan and therefore reduce U.S. influence in Bolivia. If Washington
did not require deep reforms, however, policymakers feared economic problems.
Hence, gthe delicate problem for the United States Government is that of
endeavoring continuously to strike a proper balance between the economically
desirable and politically feasible.h He nevertheless advocated continuing to
gexert strong pressure upon the Bolivian Governmenth to enact reforms.
Communists and radicals, he argued, gthrive best in an atmosphere of economic
stagnation and misery such as now exists;h only the United States-mandated
reforms could improve the economic situation.[174]
Much of the MNRfs
revolutionary agenda was reversed by the plan, which was spearheaded by the
International Cooperation Administration (ICA). In June 1956, the ICA sent
economist George Jackson Eder to Bolivia to launch the plan. The Bolivians were
told before it was implemented that they would risk losing future economic aid
unless they heeded Ederfs demands. The U.S. government was gwilling to discuss
the possibility of financial arrangements, provided that Bolivia
manifested its firm intention to stabilize the currency by taking certain
preliminary steps....h These measures included establishment of a single
grealistic rate of exchange,h balancing the budget, and eliminating exchange
controls.[175] The
transmission belt for the reforms was a Monetary Stabilization Council
comprised of Bolivian and U.S. government officials and headed by Eder.[176] Forced to
chose between losing aid and keeping revolutionary reforms, or cutting the
budget, laying off workers, reducing wages, sacrificing reforms and receiving
aid, Bolivia chose the latter option. President Hernán Siles Suazo, who came to
power in 1956, felt he had no choice; without outside aid the economy would
disintegrate.[177]
Eder wanted to change a
number of MNR policies he perceived as impediments to economic growth. COMIBOL,
a centerpiece of the revolution, was hurt by the U.S. demand that the large
firm balance its budget.[178] The large
state-run companyfs troubles were exacerbated by deteriorating physical capital
and the exhaustion of the high-grade ore veins, which drove up the cost of
mining the metal and made Bolivian tin less competitive on the world market.
Another revolutionary reform hurt by the Stabilization Plan was land reform.
Eder thought that the confiscation of large farms, and the giving of small
farms to individuals and cooperatives, had significantly contributed to a large
reduction in the amount of acreage planted in corn and potatoes. He also
thought the land reform had greatly reduced the amount of agricultural products
sold or profit. For these reasons, he advocated the Bolivian government stop
the agrarian reform. President Siles Suazo responded by announcing in December
1957 that the reform would halt.[179] Finally,
policies required by the Stabilization Council stymied attempts by the Bolivian
government to diversify the economy. The council stipulated that Bolivia trim
its budget deficit by stopping work on dams, hydroelectric projects, irrigation
project, and sugar refineries.[180]
Only six months after
the implementation of the Plan, one U.S. official, William T. Briggs, the
Deputy Director of the Office of West Coast [of South America] Affairs in the
State Department, argued that the plan was so flawed that it might never make
it off the ground. He stated, gthere are weak spots, some serious enough to
pose real threats to the programfs continuance.h Briggs specifically noted the
failure to enact tax reforms to increase the amount of government revenue; the
failure of the U.S. aid program to ensure that local currency receipts of sales
of food aid were deposited in the counterpart fund accounts; the failure to
control wage growth at state-run companies; the tendency to resolve problems by
resorting to increased aid requests; and, finally, the failure of the ruling
MNR party to explain adequately to the public the imperatives of the plan or
support the president in his efforts to implement it. Despite these major
flaws, Briggs determined that the plan as implemented was better than nothing:
g[w]e plan to continue our assistance to Bolivia in support of the
stabilization program.h He averred, however, that gwe do not plan at this time
to increase it over present levels because of the disturbing developments and
uncertainties in the picture.h Briggs concluded that gfailure to correct the
weak spots in the program could pose serious difficulties even to continuing
aid on the present scale.h[181]
It is impossible to know if Briggsfs recommendations could have saved the Stabilization Plan. Most were never enacted. What did doom the plan was its failure to produce a significant amount of economic growth, at least for the benefit of the middle and lower classes. It also precipitated a political crisis in Bolivia.
Although the
Stabilization Plan was successful at curbing inflation and, in some respects, the
1952 revolution, it was not as successful at producing tangible economic
benefits for the majority of the Bolivian people. A major setback for the plan
occurred when tin prices fell in the mid- and late-1950s. The Soviet Union was
flooding the market with a great deal of the metal in mid-1958.[182] The planned
psychological benefits of the U.S. Stabilization Plan evaporated. The U.S.
ambassador to Bolivia, Philip Bonsal, rote to State Department officer Briggs
that g[t]he fact that the major economic feature of the second year of
stabilization is the deplorable state of world metal markets, due in large part
to the American recession, is extremely disheartening. The advantages of
stabilization are not appearing in the way that we hoped they would appear.h He
asserted that many Bolivian people disagreed with U.S. policies and Washington
needed to do something to improve United States-Bolivian relations:
I am sure that all of you in Washington
realize how very difficult and delicate is our present situation here [sic] and
in other countries. We have been telling these people about the advantage of
our free economy in meeting their desires for economic development, including
diversification, industrialization, rising standards of living, etc. Instead,
it can be argued that the depressed demand and depressed prices for the few
products these poor people have to sell is actually producing stagnation and
deterioration of their economies. I will not go into the fallacies of this
argumentation. It is, nevertheless, extremely effective with many people. I
earnestly hope that we will do something for Bolivia which will show a specific
desire to help to meet conditions which did not exist at the time the two
governments undertook the stabilization program.[183]
In addition to the
falling price of tin, the U.S. Stabilization Plan suffered from poor
implementation and personnel problems. Ernest V. Siracusa, the director of the
Office of West Coast [of South America] Affairs in the State Department,
described for Rubottom the findings of an ICA evaluation of its operations in
Bolivia:
there were echronic personnel
deficienciesf and a problem with espotty and generally low quality of working
personnelf in the USOM. The [evaluation] team stated ewith some outstanding
exceptions most of these people live in isolated communities, leading ingrown
social lives among themselves.f Many do not speak Spanish, show little interest
in (all too frequently, even disdain for) the Bolivian environment. eFew have
any real concept of over-all U.S. purposes in Bolivia beyond the concrete specification of their
particular assignment.f[184]
In some instances the heads of some of the United States-run servicos and the ministers of their corresponding ministries in the Bolivian government were not speaking to one another.[185]
Economic assistance had
proved valuable to U.S. officials in forcing the Bolivian government to reverse
some of its revolutionary reforms, but by 1959, aid did not offer the same
leverage. Washington wanted to cut aid, but norteamericanos so feared
political instability in the Andean nation they felt they could not turn off
the flow of assistance. The U.S. ambassador noted, g[i]n assessing possible
alternatives U.S. procedures [sic], the Embassy concludes that the reduction of
U.S. assistance to Bolivia below the minimum required to maintain economic
order, or its termination, whether immediate or graduate, would bring the left
wing of the MNR to power on a militantly anti-United States platform, with the
communists probably able to assume key positions using Iron Curtain aid offers
for leverage.h[186]
Economically, Bolivia
was weak at the end of the decade. In 1958, Boliviafs balance of trade went
into the red for the first time during the 1950s. The red ink continued to flow
in the 1960s. Boliviafs historic dependence on tin continued. Tin exports
comprised 69% of total exports during the 1939-51 period and 62% of the total
during the 1952-64 period.[187] Worse, the
price of tin declined and remained low in the 1950s. In 1952, the metal sold
for 120.43 cents per pound, but fell to 95.77 cents in 1953 and 91.81 cents in
1954. In 1958, it sold for 95.09 cents.[188] The country
imported more, not less, of many food items. Public external debt skyrocketed,
from 4.2 billion bolivianos (bs) in 1953 to 40.2 billion bs in 1960.[189] This deficit
required a stream of interest payments that proved to be a drag on the economy.
Manufacturing activity declined from $55.7 million in 1955 to $47.3 million in
1960.[190] The plan
failed to meet one of its major goals: stabilizing the currency. The value of
the boliviano plunged from 7,000 to the dollar in December 1956 at the
beginning of the plan to 12,000 in July of 1959. ICA official D. A. Fitzgerald
concluded that gprivate businessh faced a gserious plight.h[191]
The most severe
political effect of the stabilization program was to divide and hence weaken
the MNR. Right-wing MNR members insisted that economic aid was necessary.
Left-wing party members disagreed. On an ideological level, many leftists, in
particular the tin miners, recoiled from what they saw as the MNRfs
subservience to the United States and abandonment of the revolution.[192] On an
economic level, the costs of the stabilization plan fell most heavily on them.
The program prescribed deep budget cuts, many of which fell on COMIBOL. In
turn, the state-owned company cut minersf wages, provoking large and sometimes
violent strikes.[193] In 1958, the
minersf union held a meeting to discuss withdrawing support from the MNR. Even
before they convened, militias loyal to the government fired on the
participants. When the miners struck in February 1959, again the militia was
called in.[194] By the late
1950s, the MNR was so severely divided that the tenuous MNR coalition was
sundered beyond repair.[195]
In addition to leftists
within the party, right-wing groups outside the MNR also protested that the
Stabilization Plan drastically reduced Bolivian sovereignty. One of their most
serious protests occurred on 19 April 1959, when the fascist Falange Socialista
Boliviana (FSB) party took control of a section of Laz Paz and held it for six
hours. Fifty persons died when the government squelched the rebellion.
Referring to the spread of strike-related violence, the U.S. Ambassador, Philip
W. Bonsal, wired the Department of State on 4 December 1958, that the Bolivian
government was facing a gserious test of strengthh with gextremisth labor
elements. The cable ended: g[a]nything you can do to help could well be
critical factor in success this enterprise [sic] in which U.S. Government has
invested so much prestige and money.h[196] Even though
the budget cuts were largely responsible for the political strife, the IMF,
too, in 1959, required that its future loans be tied to the elimination of
subsidies for the government-run mining program.[197]
The MNR had lost a good
deal of its control; as a result, the government relied on military force to
remain in power. Dennis A. Fitzgerald, the Deputy Director for Operations of
the ICA, wrote to a colleague, g[w]e have received reports from persons with
considerable experience in Bolivia...that the present government is kept in
power only by virtue of the armed militia, and that even the rank and file
miners are now thoroughly dissatisfied, going even so far as to say that their
situation was better under the original tin barons than it is now under
government ownership of the mines.h[198] As the
ability of the MNR to lead dropped precipitously, U.S. policy took an ominous
turn. In 1956, Washington encouraged Bolivia to build up its armed forces.[199] In 1958, it
gave military aid to Bolivia. With its left-wing support fading, the MNR relied
more and more on the army for support. It became beholden to the army. This
proved to be the MNRfs downfall as a military coup swept it out of power in
1964.[200]
In one context, aid
policy was successful in Guatemala and Bolivia. At the end of the 1950s, both
governments were pro-United States. However, the policy failed in two ways.
First, economic growth was tepid.[201] Second, and
more importantly, neither country was stable. Indeed, the countries were less
stable at the end of the decade than at the beginning, and anti-United States
groups were larger and stronger.[202]
State Department
officials thought they could produce economically strong and politically stable
governments in Guatemala City and La Paz by prodding them to open their
economies to outside economic activity aid by giving assistance. Although the
Bolivian and Guatemalan economies were more open at the end of the decade, U.S.
policies failed to produce their main goal: stable, pro-United States
governments. In fact, Washington was partially responsible for the weak
economic growth and political instability in the nations at the end of the
1950s. Starting in 1958, Washington sent military aid to both nations to try to
produce stability by means of force. Despite the critical failure of aid policy
in both nations, in the 1960s the United States, with the Alliance for
Progress, drastically increased both military and economic aid to all of Latin
America.
* Assistant Professor of
History, Luther College, Decorah, IA.
[1] I
would like to thank Susan Brewer, Richard Bryne, Anne Foster, John Fousek,
Thomas Holloway, Eldon Kenworthy, Walter LaFeber, Lorena Oropeza, Sayuri
Shimizu, Shannon Smith, Stephen Streeter, and Randall Woods for comments and
criticism on this article.
[2] Stephen G. Rabe, Eisenhower
and Latin America (Chapel Hill, 1988); Bryce Wod, The Dismantling of the
Good Neighbor Policy (Austin, 1985); Burton Kaufman, Trade and Aid
(Baltimore, 1982); and Thomas Zoumaras, gEisenhowerfs Foreign Economic Policy:
The Case of Latin America,h in Richard A. Melanson and David Mayers (eds.), Reevaluating
Eisenhower (Urbana, IL, 1987), p. 156. In this paper I use the word
gcommunist,h as do other scholars, as shorthand for Soviet-backed communist
parties in Latin America.
[3] John Gerassi, The Great
Fear (New York, 1963), p. 208; Robert H. Swansbrough, The Embattled
Colossus: Economic Nationalism and U.S. Investors in Latin America
(Gainesville, 1976), pp. 22-23.
[4] Swansbrough, op. cit., p. 11.
[5] In this paper I use the term
gLatin(s)h and interchangeably with gLatin American(s).h
[6] Henry F. Holland, gAddress by
Henry F. Holland, Assistant Secretary of State for Inter-American Affairs,
before the Pan American Society of the United States,h 27 October 1954, in
Richard N. Burr and Arthur Schlesinger, Jr. (eds.), The Dynamics of World
Power, vol. 3 (New York, 1973), pp. 286-289; George Humphrey, gAddress by George
Humphrey, Secretary of the Treasury, before the Meeting of the American
Ministers of Finance, on Economic Cooperation in the Americas,h 23 November
1954, in Burr and Schlesinger, Jr., op. cit., p. 299.
[7] U.S. Department of Commerce,
Office of Business Economics, Balance of Payments Statistical Supplement
(rev. ed.) (Washington, 1963), pp. 24-25; 214-215.
[8] Waiter LaFeber, Inevitable
Revolutions (2nd ed.) (New York, 1984), p. 107; Gabriel Kolko, Confronting
the Third World (New York, 1988), p. 13.
[9] Holland, op. cit. , pp.
286-289.
[10] Memorandum\Discussion at the
212th meeting of the National Security Council [hereafter NSC], 3 September
1954, File g212th meeting 2 September 1954,h 12, Papers of Dwight D. Eisenhower
as President [hereafter DDE papers], 1953-61 , Name Series, Box 6, Dwight D.
Eisenhower Library, Abilene, KS [hereafter Eisenhower Library].
[11] Richard N. Adams, Crucifixion
by Power (Austin, 1970), p. 204; Millikan and Rostow, A Proposal: Key to
an Effective Foreign Policy (New York, 1957), pp. 132; 183; 185.
[12] gLatin America as a
Demonstration Area for US Foreign Policy in Action,h 24 September 1955, File
gOCB 091.4 Latin America (File #4) (5) [August-November 1955],h White House
Office [hereafter WHO], NSC Staff Papers, Operations Coordinating Board
[hereafter OCB] Central File, Box 73, Eisenhower Library.
[13] Fred L. Block, The Origins
of International Economic Disorder (Berkeley, 1977), p. 8.
[14] Ibid.
[15] In this article I use the term
gnorteamericanosh for United States persons.
[16] U.S. Agency for International
Development, Statistics and Reports Division, U.S. Foreign Assistance and
Assistance from International Organizations: Obligations and Loan
Authorizations (Washington, 1962), pp. 64; 73. This includes U.S. donations
to international organizations.
[17] gLatin America as a
Demonstration Area for US Foreign Policy in Action.h
[18] Stephen G. Rabe, Eisenhower
and Anti-Communism (Chapel Hill, 1988), pp. 42-63; Piero Gleijeses, Shattered
Hope: The Guatemalan Revolution and the United States, 1944-54 (Princeton,
1991); Richard Immerman, The CIA in Guatemala (Austin, 1982); and Ronald
Schneider, Communism in Guatemala (New York, 1958).
[19] One well-known book that
focuses on the details of PBSUCCESS, the CIAfs attempt to overthrow the Arbenz
regime, is Stephen Schlesinger and Stephen Kinzer, Bitter Fruit (New
York, 1982). Frederick W. Marks III and Stephen Rabe spar over the relative
importance of PBSUCCESS in toppling the Arbenz regime in two articles in Diplomatic
History: Marks, gThe CIA and Castillo Armas in Guatemala, 1954: New Clues
to an Old Puzzle,h Diplomatic History 14 (Winter 1990), pp. 67-86 and
Rabe, gThe Clues Didnft Check Out: Commentary on the CIA and Castillo Armas,h Diplomatic
History 14 (Winter 1990), pp. 87-95.
[20] Kenneth J. Grieb, Guatemalan
Caudillo: The Regime of Jorge Ubico (Athens, OH, 1979), p. 283.
[21] George Black, The Good
Neighbor: How the United States Wrote the History of Central America and the
Caribbean (New York, 1988), p. 78.
[22] Cole Blasier, The Hovering
Giant (2nd ed.) (Pittsburgh, 1985), p. 54; Adams, op. cit., p. 145.
[23] Black, op. cit., p. 80;
Blanche Weisen Cook, Declassified Eisenhower (New York, 1981), p. 222.
[24] gEconomic Development in
Guatemala,h 13 March 1953, 814.00/3-1353, RG 59, NA.
[25] DOS, Division of Research for
American Republics, Office of Intelligence Research [OIR], 23 October 1950, Guatemala:
Communist Influence no. 5123, p. 65, NA.
[26] DOS, Division of Research for
American Republics, OIR, 30 April 1953, Guatemalan Support of Subversion and
Communist Objectives (1950-1953), no. 6185, p. 19, NA.
[27] DOS, Inter-American
Conference for the Maintenance of Continental Peace and Security Quitandinha,
Brazil, August 15-September 2, 1947 (Washington, 1948), p. 79.
[28] Ibid.
[29] DOS, Ninth
International Conference of American States, Bogota, Colombia, March 30 to May
2, 1948 DOS Publication 3263 (Washington, 1948), pp. 66-67; 209; 215-216.
[30] Ibid., pp. 207-208.
[31] U.S.
Ambassador in Guatemala City to Department of State, 13 March 1953,
814.00/3-1353, Records of the U.S. Department of State, Record Group 59
[hereafter simply referred to as RG 59], National Archives, Washington, D.C.
[hereafter NA].
[32] gMemorandum
of Conversation,h 31 May 1951, 713.00/5-3151, RG 59, NA.
[33] Blasier,
op. cit., pp. 55; 58-59.
[34] Ibid., p. 63.
[35] Jacobo
Arbenz quoted in gEconomic Development in Guatemala.h
[36] Ibid., p. 238.
[37] Blasier,
op. cit., p. 153.
[38] gEconomic
Development in Guatemala.h
[39] The
value of U.S. direct investment in Guatemala fell from $106 million in 1950 to $101
million in 1954 (U.S. Department of Commerce, Office of Business Economics, Balance
of Payments Statistical Supplement, a supplement to the Survey of
Current Business [rev. ed.] [Washington, 1963], p. 208).
[40] gMemorandum
of Conversation,h 18 May 1950, 814.00TA/5-1850, RG 59, NA.
[41] gEconomic
Development in Guatemala.h
[42] gNotes
on U.S. Aid Program to Guatemala,h 25 October 1955, RG 469, Records of the
Agency for International Development and Predecessor Agencies, Box 34,
Washington Federal Records Center, Suitland, MD [hereafter WFRC].
[43] U.S.
Agency for International Development, Statistics and Reports Division, op.
cit., p. 73.
[44] gMemorandum
of Conversation.h
[45] gPolitical
Repercussions of President Arbenzfs Proposed Agrarian Reform in Guatemala,h 26
May 1952, 814.20/5-2652, RG 59, NA.
[46] International
Bank for Reconstruction and Development, The Economic Development of
Guatemala (Washington, 1951), pp. 26; 40.
[47] Twenty-two
fincas (plantations) larger than 22,000 acres each covered 13.3% of the
agricultural land; 7,446 fincas larger than 110 acres covered 70.6%; and
259,169 holdings of less than 8.6 acres each covered only about 10% (gSome
Statistics on the Effect of the Draft Guatemalan Agrarian Reform Law,h 12 June
1952, 814.20/6-1252, RG 59, NA).
[48] LaFeber,
op. cit., p. 118. Of the 59.8% of total Guatemalan territory that was
arable, only 10% was utilized. This was in part due to UFCOfs large holdings.
The company maintained it needed these tracts of land because once the bananas
on a particular plot of land were infected by the Panama disease, a common
problem for Central American banana harvesters, that plot had to be abandoned
and new land cultivated (gExpropriation of United Fruit Company Land in
Guatemala,h 13 March 1953, 814.20/3-1353 and gThe UFCO Company and the Agrarian
Reform Law,h 23 June 1952, 814.20/6-2352, RG 59, NA).
[49] gSome
Statistics on the Effect of the Draft Guatemalan Agrarian Reform Lawh;
gEconomic Development in Guatemala.h In February 1954, the National Agrarian
Commission took 172,000 more acres from the giant fruit company. It was the
last expropriation (Jim Handy, Gift of the Devil: A History of Guatemala
[Boston, 1984], p. 142).
[50] Handy,
op. cit., p. 142.
[51] Guatemalan
Ambassador to the United States Guillermo Toriello to DOS, 26 June 1953,
814.20/6-2653, NA.
[52] Charles
R. Burrows, quoted in Gleijeses, op. cit., p. 365.
[53] gAspects
of the Guatemala Agrarian Reform Law and Their Repercussion on the Political
Scene,h 2 February 1952, 814.20/2-0252, RG 59, NA.
[54] gAide-Memoire,h
28 August 1953, Records of the Bureau of Inter-American Affairs Relating to the
OAS, Lot 60 D665, RG 43, Box 25, NA.
[55] Cook,
op. cit., pp. 223; 228.
[56] Schlesinger
and Kinzer, op. cit., p. 108.
[57] Jim
Handy, geThe Most Precious Fruit of the Revolutionf: the Guatemalan Agrarian
Reform, 1952-1954,h Hispanic American Historical Review 68 (November
1988), p. 705.
[58] Mensaje
del Ciudadano Presidente de la Reublica Teniente Coronel Carlos Castillo Armas
a la Asamblea Nacional Constituyente, 29 October 1954, p. 14, Centro de
Investagaciones Regionales Mesoamérica, Antigua, Guatemala [hereafter CIRMA].
[59] Department
of State, Division of Research for American Republics, OIR, 23 October 1950, Guatemala:
Communist Influence no. 5123, pp. 2; 5; 56-57, NA.
[60] Department
of State, Division of Research for American Republics, OIR Report, 30 April
1953, Guatemalan Support of Subversion and Communist Objectives (1950-1953)
no. 6185, pp. 2-4; 19.
[61] gMemorandum
of Conversation,h 30 November 1951, 713.00/11-3051, DOS, Central Decimal File,
RG 59, NA; John Foster Dulles, gIntervention and International Communism in the
Americas,h Department of State Bulletin 30 (22 March 1954), p. 424.
Dulles stated the Soviets had a gdesignh to infiltrate the Americas but did not
have gcontrolh of any nation.
[62] Dulles
quoted in Cook, op. cit., pp. 269-270.
[63] gExcerpt
From Memorandum,h 14 May 1954, Henry F. Holland Papers, RG 59, Lot 57 D295, Box
3, File gCountry File\Guatemala\1954,h NA.
[64] Cook,
op. cit., p. 225; Blasier, op. cit., pp. 157; 205.
[65] Gleijeses
argues that Eisenhower administration officials correctly perceived the
increasing power of the PGT, Guatemalan communist party. He maintains, however,
that Washington feared not only an impending alliance between Guatemala and
Moscow but that the Agrarian Reform, by aiding the workers and peasants,
threatened the stability of the social structure of the entire isthmus
(Gleijeses, op. cit. , pp. 365-366).
[66] Suzanne
Jonas, The Battle for Guatemala (Boudler, 1991), pp. 41-55 and Michael
McClintock, The American Connection (London, 1985), pp. 28-37 discuss
the 1954 to 1959 period in their works but do not thoroughly examine the
assumptions behind and impact of U.S. economic aid.
[67] AmEmbassy
to DOS, 24 January 1955, 714.00/1-2455, RG 59, NA.
[68] Thomas
Mann to Raymond G. Leddy, 17 September 1954, Holland Papers, Country File
Guatemala, Lot 57D295, RG 59, Box 3, NA.
[69] Henry
F. Holland to Andrew N. Overby, 8 December 1955, 814.055/12-855, RG 59, NA.
[70] Edward
J. Sparks (Ambassador) to Roy R. Rubottom (Deputy Assistant Secretary), 12
December 1956, Office of Central American and Panamanian Affairs, Lot 60D647,
RG 59, Box 2, MA.
[71] Interview
with Jorge Skinner-Klée, Sr., 19 May 1991, Guatemala City.
[72] Sparks
to Rubottom, 23 October 1956, Office of Central American and Panamanian
Affairs, Guatemala Subject File, Lot 60D647, RG 59, File
g1956\Guatemala\ICA\Klein and Sacks,h Box 2, MA.
[73] Ibid.
[74] USOM/Guatemala,
gNarrative For Fiscal Year 1957\Guatemala Program Submission (Non-Military),h
23 January 1956, RG 469, Records of the Agency for International Development
and Predecessor Agencies, Guatemala, Box 31, WNRC.
[75] U.S.
Military aid to Guatemala totaled $1.4 million from 1956 (when it began) to
1961 (U.S. Agency for International Development, Statistics and Reports
Division, op. cit., p. 64).
[76] gTransfer
of Military Equipment to Guatemala,h 30 July 1954, United States Treaties
and Other International Agreements, vol. 5, pt. 2, p. 1927; gBilateral
Military Assistance Agreement Between the Government of the United States of
America and the Government of Guatemala,h 18 June 1955, United States
Treaties and Other International Agreements, vol. 6, pt. 2, p. 2110.
[77] gTransfer
of Military Equipment to Guatemala.h
[78] AmEmbassy
Guatemala to Department of State, 7 August 1956, RG 469, Records of the Agency
for International Development and Predecessor Agencies, Guatemala, Box 39,
WFRC.
[79] Department
of State, gIntelligence Brief,h 2 December 1957, no. 2217, RG 469, Records of
the Agency for International Development and Predecessor Agencies, Guatemala,
Box 39, WFRC, 3.
[80] Stephen
M. Streeter, gManaging the Counterrevolution: The Eisenhower Administration and
Guatemala, 1954-l957,h (1992), (unpublished manuscript), pp. 16- 18.
[81] McClintock,
op. cit., p. 32.
[82] Ibid.,
p. 35.
[83] Mann
to Leddy, 17 September 1954.
[84] gSubject:
GUATEMALA: Economic Development Assistance Program,h undated [1957?], Central
American and Panamanian Affairs, Lot 60D647, RG 59, Box 2, File gGuatemala
1956\ICA\Klein and Sacks,h NA.
[85] Armas,
op. cit., p. 14.
[86] Mann
to Leddy, 17 September 1954.
[87] gNotes
on U.S. Aid Program to Guatemala,h 25 October 1955, Records of the Agency for
International Development and Predecessor Agencies, Guatemala, RG 469, Box 34,
WNRC; Adams, op. cit., p. 139. In 1955, direct investment of foreign
private-sector capital was 3.7 million quetzales. In 1960, it rose to
16.8 million quetzales (International Monetary Fund, Balance of
Payments Yearbook, vols. 8-16).
[88] Carl Nepud
to Marcus P. Quinn, 25 June 1956, RG 469, Records of the Agency for
International Development and Predecessor Agencies, Guatemala, Box 37, WNRC.
[89] Neil to Williams, 25 February
1957, Central American and Panamanian Affairs, Subject File Guatemala, Lot
60D647, RG 59, Box 3, NA.
[90] USOM/Guatemala,
gFiscal Year 1956 Program Narrative Section,h 11 March 1955, RG 469, Records of
the Agency for International Development and Predecessor Agencies, Guatemala,
Box 31, WFRC.
[91] Ibid.
[92] Ibid.
[93] USOM/Guatemala,
gNarrative for Fiscal Year 1957\Guatemala Program Submisson (Non-Military).h
[94] gThe
Economic Development of Guatemala,h July 1954?, Holland Papers, Country File
Guatemala, Lot 57D295, RG 59, Box 3, NA.
[95] Mann
to Leddy, 17 September 1954.
[96] AmEmbassy
Guatemala to DOS, 25 July 1958, g1955-1960 Economic Development Plan,h RG 469,
Box 33, WFRC. IBRD funding was for the Atlantic and Pacific Highway
construction (IBRD, The World Bank in Latin America\October 1958
[Washington, 1958], p. 32).
[97] gA
Report to the NSC,h NSC 149/1, 20 April 1953, WHO OSANSA, NSC Series, Policy
Papers Subseries, Box 4, File gNSC, 149/2,h EL. The aid program was to be
temporary. Quickly ending aid flows fit neatly into the overall goal of
producing a showcase: the new Guatemala was not only to be stable, democratic
and prosperous, but, eventually, self-reliant (gMemorandum of
Conversation\GUATEMALA : Economic Aid Level for FY-57,h 5 March 1956, Central
American and Panamanian Affairs, Lot 60D647, RG 59, Box 2, NA).
[98] Agency
for International Development, Statistics and Reports Division, op. cit.,
p. 39. Part of the 1961 FY was in John F. Kennedyfs administration.
[99] Harry
Turkel (REA) to RRR, 25 November 1959, RRR papers, Lot 60D553, RG 59, Box 13,
NA; ECLA, gSuplemento Estadistico,h Economic Bulletin of Latin America 5
(November 1960), p. 32 and EBLA 6 (November 1961), p. 47.
[100] Measured
in constant-dollar 1970 quetzales, Guatemalafs currency, Gross Domestic
Product increased 3.5% in Guatemala over the 1953-1960 period (James W. Wilkie
and Peter Reich [eds.], Statistical Abstract of Latin America 20 [1980],
pp. 285; 287). In 1955, direct investment of foreign private-sector capital was
$107 million; in 1956, it rose to $114 million and in 1957, to $129 million. By
1959, it had reached $132 million (U.S. Department of Commerce, Office of
Business Economics, op. cit., p. 214).
[101] Adams,
op. cit., pp. 194-95; 152; 393; 401.
[102] Committee
for Economic Development, Economic Development of Central America (New
York, 1904), p. 149.
[103] Roy
R. Rubottom to Clarence Dillon, 19 December 1958, 820.l0/12-1958, RG 59, NA. In
1953, 76.7% of Guatemalafs foreign exchange came from coffee; in 1960, 66.2%
percent did (Dirección General de Estadistica, Guatemala in Cifras
Cuadros, XI-5 and XII-7; Banco de Guatemala, Boletin Estadistíco 4
[1964], p. 73).
[104] L. D.
Mallory to DOS, 31 December 1958, RG 469, Records of the Agency for
International Development and Predecessor Agencies, Guatemala, Box 36, WFRC.
[105] Dulles
to AmEmbassy Guatemala, 24 November 1958, RG 469, Records of the Agency for
International Development and Predecessor Agencies, Guatemala Box 36 WFRC.
[106] Direccíon
General de Estadistíca, Guatemala in Cifras, Cuadro V-9; United Nations,
Food and Agriculture Organization, World Grain Trade Statistics, 1959-60 (Rome,
1960), p. 28.
[107] L. D.
Mallory to DOS, 31 December 1958.
[108] Suzanne
Jonas, Plan Piloto para el Continente (Centroamérica: Editorial
Universitaria Centroamericana, 1981), p. 258.
[109] John
Gillin, gSan Luis Jilotepetueh in Richard Adams (ed.), Political Changes in
Guatemala Indian Communities (New Orleans, 1972), p. 27; C. A. Stewart
(Director of the Office of Central American Affairs) to RRR, 12 June 1959, RRR
papers, Box 13, NA.
[110] El
Imparcial
(Guatemala City, 16 February 1959), pp. 1; 9.
[111] The
FY 1956 amount was $34.4 million (U.S. Agency for International Development,
Statistics and Reports Division, op. cit., p. 39).
[112] gMemorandum of Conversation,h
26 April 1956, 814.00/4-2456, RG 59, DOS CDF, NA.
[113] Oscar
M. Powell to Rollin S. Atwood, 1 June 1959, RRR papers, Lot 60D553, RG 59, Box
13, NA.
[114] Ibid.
[115] C. A.
Stewart (Director of the Office of Central American Affairs) to RRR, 12 June
1959, RRR papers, Lot60D553, RG 59, Box 13, NA.
[116] Powell
to Atwood, 1 June 1959.
[117] U.S.
Agency for International Development, Statistics and Reports Division, op.
cit., p. 39.
[118] William
F. Gray to DOS, 824.00 TA/5-0759, RG 59, NA; Henry Dearborn to Henry F.
Holland, 8 June, 1955, 720.5-MSP/6-855, RG 59, NA.
[119] Blasier,
op. cit., p. l35; Robert Alexander, The Bolivian National Revolution
(New Brunswick, NJ, 1958), pp. 260-261; Rabe, Eisenhower and Latin America,
pp. 77-82.
[120] J.
Garnett Lomax (British Ambassador in La Paz) to J. H. A. Watson Esq. (British
Embassy, Washington, D.C.), 11 October 1952, AX 1016/7, FO/97707, Foreign
Office [hereafter FO] 371, Public Record Office, Kew, England [hereafter PRO];
J. H. A. Watson to R. Cecil, Esq., American Department, FO, 5 October 1952, AX
1016/5, FO/97707, FO 371, PRO.
[121] Laurence
Whitehead, Bolivia and the United States: a Case of Neo-colonialism
(London, 1969), pp. 6-7; 22; Philip W. Bonsal to Roy R. Rubottom, 4 December
1958, 824.00TA/12-0458, RG 59, NA.
[122] Erick
D. Langer, Economic Change and Rural Resistance in Southern Bolivia (Stanford,
1989), p. 200.
[123] Economic
Commission for Latin America (hereafter ECLA), gEconomic Policy of Bolivia,h Economic
Bulletin for Latin America 12 (October 1967), p. 64.
[124] Ibid., p. 63.
[125] At
the behest of the 1943 U.S. mission, Bolivia set up a development corporation
to promote increased exploitation of natural resources, agricultural
development, improve public works, and to stimulate industry and commerce (La
Corporacíon Boliviana de Fomento, La Corporacíon Boliviana de
Fomento\Susorigenes, organizacíon y activida [La Paz, 1943], p. 22).
[126] Richard
S. Thorn, gThe Economic Transformation,h in James M. Malloy and Thorn, Beyond
the Revolution\Bolivia since 1952 (Pittsburgh, 1971), p.165; U.N. Economic
and Social Council, ECLA, Development of Agriculture in Bolivia,
E/CN-12/218/Add. 2 (New York, 1951), pp. 7-8.
[127] James
Dunkerley, Rebellion in the Veins (London, 1984), pp. 12-13. In fact,
the United States agreed to buy tin from Britain (Malay) for a higher price
than what Bolivia offered, thus cementing Anglo-American control over the world
tin market.
[128] Blasier,
op. cit., pp. 129-130; Whitehead, op. cit., pp. 6-7.
[129] Public
Relations Office, Office of the Ministry of Foreign Affairs, Boliviafs
Struggle (La Paz, 1956), University of Pittsburgh Bolivian Pamphlet
Collection, [hereafter Pitt Pamphlets], p. 13.
[130] Langer,
op. cit., p. 200.
[131] Public
Relations Office, Office of the Ministry of Foreign Affairs, op. cit.,
p. 26.
[132] Kolko,
op. cit., p. 101.
[133] Programa
idelogoico y estatuas de la C. O. B. aprobadas por el Congresso Nacional de
Trabajadores,
31 October 1954, (La Paz?, 1954), Pitt Pamphlets, p. 32; Guillermo Lora, A
History of the Bolivian Labour Movement 1848-1971 trans. Christine
Whitehead (Cambridge, England, 1977), p. 282.
[134] Carlos
Dujove, Trabajo y Salarias en la Revolution Nacional (La Paz, 1955),
Pitt Pamphlets, p. 37; Arze, Plan inmediato p. 70; Vietor Paz Estenssoro
quoted in James W. Wilkie, Bolivian Foreign Trade: Historical Problems and
MNR Revolutionary Policy, 1952-64 (Buffalo, 1971), p. 2.
[135] Arze,
op. cit., p. 70; Victor Paz Estenssoro quoted in Wilkie, op. cit.,
p. 2.
[136] Speech
of Paz Estenssoro, 24 February 1954, 824.062/2-2454, RG 59.
[137] Arze,
op. cit., p. 45.
[138] Alfredo
Franco Guachalla, Acotaciones para la doctrina del partido, Pitt Pamphlets, pp.
9; 12.
[139] Victor
Andrade, My Missions for Revolutionary Bolivia (Pittsburgh, 1976), p.
159.
[140] gReport
of Bolivian Foreign Ministry on the Policy of the Government of Bolivia in the
Negotiations of the Sale of Bolivian tin,h 11 April 1953, 724.00/4-1153; RG 59.
U.S. stockholders owned at most 25% of only one of the largest three mines, the
Patiño (Blaiser, op. cit., p. 88).
[141] Blasier,
op. cit., p. 87.
[142] Arze,
Planteamienotos de la revolucion nacional en la decima conferencia
inter-americano (La Paz, 1954), Pitt Pamphlets, p. 20.
[143] Lora,
op. cit., p. 282.
[144] Blasier,
op. cit., p. 131.
[145] gReport
of Bolivian Foreign Ministry on the Policy of the Government of Bolivia in the
Negotiations of the Sale of Bolivian tin.h
[146] Sumner
Welles to the Minister in Bolivia (Douglas Jenkins), 1 August 1941, FRUS
1941: VI, p. 436.
[147] According
to the Advisor on Political Relations in the State Department, U.S. officials
were not prepared gto consider a program of economic assistance to Bolivia
without a prior or accompanying settlement of the Standard Oil problem.h
(Laurence Duggan, gMemorandum,h 28 May 1941, FRUS 1941: VI, pp. 434-435).
[148] Ibid., pp. 452-464.
[149] Louis
J. Halle, Jr., gSignificance of the Institute of Inter-American Affairs in the
Conduct of U.S. Foreign Policy,h Inter-American Series 36, Publication
3239 (Washington, 1948), p. 3; Graham H. Stuart and James L. Tigner, Latin
America and the United States (6th ed.) (Englewood Cliffs, 1975), p. 729.
[150] Speech
of Paz Estenssoro quoted in gMemorandum of Conversation,h 24 February 1954,
824.062/2-2454, RG 59.
[151] PPP-DDE (1953), p. 659.
[152] Milton
Eisenhower to DDE, 11 January 1954, DDE, Papers as President, Box 13, Name
Series, File gEisenhower, Milton\South American Report 1953 (1),h EL;
Alexander, op. cit., pp. 260-261.
[153] Miron
Burgin to John L. Topping, 21 March 1956, 611.24/3-2156, RG 59, NA.
[154] Milton
Eisenhower to DDE, 24 July 1953, DDE: Papers of the President, NSC Series, File
gEisenhower, Milton\South American Report 1953 (5),h Box 13, EL.
[155] Whitehead,
op. cit., Appendix 2, p. 28.
[156] George
Jackson Ecler, Inflation and Development in Latin America (Ann Arbor,
1968), p. 60.
[157] Thomas
Mann to Raymond G. Ledy, 17 September 1954.
[158] Whitehead,
op. cit., p. 29.
[159] ECLA,
op. cit., p. 81.
[160] Whitehead,
op. cit., p. 33; ECLA, op. cit., p. 80.
[161] Eder,
op. cit., pp. 60-61; figures are in ECLA, op. cit., p. 80.
[162] Silberstein
to Williams, 23 May 1957, Lot 63D87, Office of Inter-American Regional Economic
Affairs, File gMiscellaneous Materialh Box 4, NA; Russell Edgerton, Sub-Cabinet
Politics and Policy Commitment: The Birth of the Development Loan Fund
(Syracuse, 1970), p. 27; gProposed Instructions with Respect to Programs to
Raise Consumption Levels and Accelerate Economic Development,h 18 June 1956,
Lot 63D87, RG 59, Box 1, File gPL 480 Loan Policy,h Office of Inter-American
Regional Economic Affairs, NA.
[163] Bolivia
received 4.3% of the total PL480 aid given to Latin America during Eisenhowerfs
tenure (U.S. Agency for International Development, Statistics Aid Reports
Division, op. cit., pp. 28; 30).
[164] Republica
de Bolivia, Ministcrio de Hacienda, Direccion General de Estadistica y Censos, Boletín
Estadístico (1964), pp. 109; 164.
[165] Gobierno
de Boliviana, Direccion General de Estadistica y Censos, Boletín Estadístico
89 (1964), p. 38. The 1956 rate was the highest since Bolivia began keeping
records on price levels in 1931.
[166] Thorn,
op. cit., p. 179.
[167] Eder,
op. cit., p. 53.
[168] Thorn,
op. cit., pp. 173-174; 376.
[169] Franklin
Antegana Paz, La Politica Monetaria de Bolivia (La Paz, 1954), Pitt
Pamphlets, pp. 7; 48.
[170] Eder,
op. cit., pp. 141; 242.