Foreign Relations of the United States, 1961–1963, American Republics; Cuba 1961–1962; Cuban Missile Crisis and Aftermath, Volumes X/XI/XII, Microfiche Supplement

99. Memorandum from McClintock to Rostow, December 15, transmitting a memorandum from Woodward to McGhee and Ramsey, which attaches a memorandum from Woodward to McGhee¹

December 15, 1961

SUBJECT

• Ecuador

You will be interested I believe in the first page of Mr. Woodward’s memo on conclusions to be drawn from our experience of the recent revolt in Ecuador. You will note that his third paragraph substantiates the observation made in our paper on Preventive Diplomacy as to the importance of indoctrinating the military in various countries with American ideas of respect for constitutional order.

Attachment

December 1, 1961

SUBJECT

• Ecuador

There is attached a preliminary analysis of the recent Ecuadorean revolution as it may relate to the Alliance for Progress.

I believe the main points in this situation are:

1. that there would have been less likelihood that President Velasco would have been thrown out if he had paid more attention to the principles of the Alliance for Progress and followed them—instead of applying additional taxes on consumer goods;

2. that it is possible that the wide advertising of the Alliance for Progress may tend to raise the expectations of the mass of the people so that their elected leaders will find it more necessary to take constructive action on behalf of the people rather than to make demagogic promises which they do not keep;

3. As an entirely separate matter, I believe this revolution also is a vivid reminder of the importance of the relations which have been developed over the past 25 years with officers of the armed services of Latin American countries. So many of these officers have been in the United States service schools and have been trained, at least briefly, as United States military installations, that there has been a very widespread contagion of the U.S. idea that officers of the armed services are “professional” guardians of the common weal. The way in which the Ecuadorean armed services sensed the true wishes of the Ecuadorean people during this revolution and did not arbitrarily attempt to maintain their own pre-conceived idea of what the government should be, was to me very impressive. This tends to reinforce my own conviction that there is no more important type of travel grant that we should encourage than a steady expansion of the existing system for training Latin American army, naval and air force officers in the United States and at Fort Gulick—not to mention the training that is given to non-commissioned officers at Fort Gulick.

Attachment

November 30, 1961

SUBJECT

• Ecuador: Some Comments on the Revolution

I refer to your memorandum of November 9, 1961, in which you raise several interesting questions concerning the recent violent change of Government in Ecuador. While we have as yet not had the time necessary to devote to a well-coordinated study in depth of the complete “anatomy” of this revolution, I should like at this time to address myself to two major points you raised: the question of the retrogressive consumer taxes and the role of the military.

It is generally accepted that the imposition of the consumer taxes, which gave labor and student groups a convenient “cause” with which to forment disturbances, was the spark which ignited the fuse to the powder keg. Given the rigid, proud Velasco personality, his well-known shortsightedness, and the difficult fiscal crisis in which he found himself, I believe there was little we could have done to prevent the creation of the powder keg beyond what we did—giving technical assistance in the preparation of fiscal and tax reforms and strongly suggesting that those reforms be adopted. As you know, several expert missions, notably a [illegible in the original] group, had prepared detailed plans for tax reform and presented them to the Velasco Government. Although United States officials in both Washington and Quito urged officials of the Ecuadorean Government (of all levels) to adopt these plans rapidly, the GOE continued merely to “study” them. At the point at which Velasco found it necessary to impose the retrogresssive taxes, the only way we could have damped this final spark which set off this explosion would have been our willingness to give immediate, massive budget support assistance (a step we, particularly our financial institutions, are hesitant to take) that would supply the immediate revenue to the GOE that the taxes were designed to produce. Tax reform, by itself at this stage, would not have produced revenues rapidly enough to alleviate the immediate situation with which the GOE was faced.

I believe, then, that in studying the causes of the Ecuadorean Revolution and possible preventive measures, and in applying the lesson learned from it to problems we will face in the future, we must look much deeper than the final spark and attempt to attack the basic ills that produced the powder keg. In the case of Ecuador, Velasco, during his electoral campaign planted the seeds of his own destruction by his own demagogaery—promising more and raising more hopes than he could logically expect to fulfill. These seeds were nurtured by his own administrative inefficiency and his choice of Cabinet Ministers who were little more efficient than he was, and who were open to attack on charges of graft and corruption. Velasco had in the past controlled situations through the use of words and his magnetic personality. In his year of office this time he overestimated the power of his oratory and found he could not, with words and promises, satisfy people who were now expecting houses and employment and schools and a better standard of living. Velasco’s own administrative failings, combined with an unfortunate decline in Ecuador’s export earnings, led to the financial crisis that struck the final spark.

How do we attack the basic problems and guide the foreign government into logical channels to solve them? In Ecuador we gave a good deal of attention to assisting Velasco in planning for improved public administration, as a first step in solving his problems. Our missions studied, planned, and made suggestions. There was resistance to many of the suggestions, thus blocking our efforts to begin the cure of the patient. Our answer to this situation lies in the concepts of the Alliance for Progress, in which we make it clear to the governments that we will not be able to give them economic assistance unless they take the self-help steps necessary to lay the groundwork for the effective utilization of our aid. This is a good concept. Unfortunately, however, the Alliance for Progress is a long range matter. Many of the governments with which we must deal under the Alliance are shortsighted. What do we do when faced with governments that are unwilling to take the necessary steps and, in the absence of our assistance, cast about to solve their difficulties and shortsightedly impose measures, like the Ecuadorean consumer taxes, that we feel will lead to their destruction? We can only 1) continue to attempt to influence them to meet the requirements of the Alliance, and failing in this; 2) give short term assistance, without insisting on the basic self-help measures, in hopes that we can later influence the government to take the necessary steps; or 3) allow the government to fall, with the attendant danger that the left might profit from the chaos caused by this. Our chance to influence the governments may be increased considerably by “selling” the concept of the Alliance to the people of a country, but if the government remains obstinate in this case, the results will be the same. There would appear to be no ready answer to this basic problem.

The military: Once the spark had been ignited in Ecuador, the nation’s military forces played a determining role in the immediate outcome. We do not yet have readily available the detailed data that would indicate why a given unit or a given arm of the service backed one or the other candidates. However, we can speculate with a fair degree of accuracy on the general attitudes of the military in the crisis.

We have had evidence that the Ecuadorean military establishment in general is “constitutional-minded” and subject in some degree to popular sentiment. At the beginning of the Ecuadorean crisis the military performed its duty of maintaining internal security well and faithfully, and in so doing caused the death of several students. As the public agitation against Velasco and against the bloodshed gained strength, the Armed Forces found it difficult to maintain their role against public opinion. Opposition claims including a declaration by the Congress, that Velasco had acted unconstitutionally and was attempting to establish himself as a dictator outside of the provisions of the Constitution, gave the military leaders a constitutional “cut” and sealed Velasco’s doom. Why the Chimborazo Batallion broke with Velasco before the remainder of the forces we do not at this point know. In the action of individual units personal loyalties and the personalities and politics of commanders, who may have hoped to influence their comrades, definitely come into play.

Once the military felt themselves freed from their duty to support Velasco, the armed forces leaders engaged in constitutional contortions by declaring that Arosemena had himself acted in an unconstitutional way and had thus disqualified himself from the Presidency. The solution was a caretaker government, with a military-appointed President, to rule for 90 days until a constituent assembly could be called. The question for the individual military commanders then resolved itself into 1) support for the interim president; or 2) support for the constitutional succession of Arosemena.

Governing factors in this situation were: 1. The action of the Congress in declaring Arosemena constitutional President; 2. Rapidly growing public support for the succession of Arosemena. Countering these factors was a general dislike in the military of Arosemena and his political attitudes.

The support of the “respectable” parties such as the Conservatives and Liberals for Arosemena undoubtedly had a deep effect on military thinking. These moderate forces feared that imposition of a military president would lead only to continued agitation, and would result in gains for the left by the time the constituent assembly was called. They felt, and argued to military leaders, that only by supporting Arosemena and “constitutionality” could the military place themselves in a situation to influence the new president and maintain control of the situation. Arguments such as these, coupled with the military’s realization that it could not control the pro-Arosemena crowds without further bloodshed, and its support of “constitutionality” appear to have been the principal factors in switching sentiment from the military choice for President to Arosemena.

The role of the armed forces units stationed in Guayaquil, particularly air units, were the key and the spearhead in the physical military shift in allegiance, as air force units from Guayaquil flying to Quito to support Arosemena finally turned the tide in the wavering military thinking. The reason for the defection of the Guayaquil Air Force garrison (and other Guayaquil forces) is not immediately clearly apparent, but the fact that Arosemena is closely identified with Guayaquil, that violence against the populace by Velasco forces was greatest (in the initial phases of the disturbances) in Guayaquil, and that the military units in that city were exposed to strong pro-Arosemena public sentiment, very likely played a major role.

I believe that it will be interesting, after our officers in the field have had an opportunity to gather further information through discussions with military and political leaders over the next few weeks, to study further and in depth the personalities and forces that came into play in the actions of the military forces.

In examining the Ecuadorean events, the question might be asked “What did we do concretely to attempt to head off the explosion we saw coming?”. In addition to attempting to convince the GOE to take administrative and fiscal reform steps to attack the basic problem, as mentioned above, we concluded a loan agreement of 25 million for establishment of a housing bank in an attempt to meet one of the country’s basic needs, and in addition made available $250,000 for immediate use in a self-help housing project. In regard to attempting to quench the final spark, we worked with the GOE on a budgetary support loan, which was delayed because the Ecuadoreans could not decide what they needed (if anything at all), and did, shortly before the fall of the Velasco Government, inform the GOE that we had approved a budgetary loan, based on continued compliance with the IMF standby criteria, of $8 million that could serve to reduce a good deal of the popular pressure building up as a result of the measures the GOE felt itself constrained to take because of its bankruptcy. In the non-economic field, our Ambassador held discussions with members of the responsible opposition to attempt to induce them to forget past differences and work together with the Government in planning corrective measures and in the interest of the maintenance of political stability and constitutional continuity.

1. Preliminary analysis of recent Ecuadorian revolution. Secret. 6 pp. WNRC, RG 59, S/P Files: Lot 67 D 548, Ecuador.