Foreign Relations of the United States, 1961–1963, Volume XII, American Republics

183. Memorandum From the Director of the Agency for International Development (Hamilton) to President Kennedy¹

Washington, April 6, 1962.

SUBJECT

• Effect of Alliance for Progress on Argentine Election Results; NSAM No. 141, March 27, 1962²

1. You requested an analysis be made of the extent to which President Frondizi’s recent political reverses were due to (a) exploitation by his opponents of the fact that he arranged to accept United States aid, or (b) exploitation by his opponents of reforms undertaken or promised by him and associated with the Alliance for Progress. After consulting our Embassy in Argentina, we believe the answers are as follows:

President Frondizi’s opponents did not attempt to exploit Argentine acceptance of United States aid and his political reverses were not ascribable to such acceptance. An emissary from President Frondizi emphasized, quite to the contrary, that Frondizi’s defeat would have been of almost catastrophic proportion if announcement of the $150 million Alliance for Progress loan had not come when it did.³

President Frondizi’s election opponents did not openly seek to exploit the reforms he had initiated or promised to initiate in connection with the Alliance for Progress. Frondizi’s austerity program designed to bring about the financial stability necessary for sound economic development, which the United States supported, was a factor in the elections, however. An important reason for Frondizi’s defeat was that his reforms and development program had not gone far enough or deep enough to reach the common man as yet.

As the Embassy observed,⁴ the persistent favorable after-image of Peron in the public mind was a fundamental factor in the election.

2. You asked the question as to whether it is advisable to channel more Alliance aid through the Inter-American agencies. Until we have obtained more experience with these agencies, I do not believe it advisable to increase the amounts above our current plans for the Inter-American Development Bank and the Organization of American States programs. Under our current plans, these two organizations, in FY 1962, will have utilized slightly more than one-half of the $400 million portion of the $500 million appropriation provided by the Congress last year with the remainder available in FY 1963.

Our experience to date with the Inter-American agencies has been rather limited and produced equally both good and bad results. In a number of cases, the agency has been most useful and successful in dealing with the local government to bring about reforms. In other instances, we have found that because of the newness of the task the Inter-American agency’s performance has not been adequate in the implementation of projects and in assisting countries to develop sound programs and plans.

Walter L. Lingle⁵

1. Source: Kennedy Library, National Security Files, Countries Series, Argentina, General, 4/62. Confidential.
2. NSAM 141, entitled “Analysis of Frondizi’s Political Reverses,” is in Department of State, NSAM Files: Lot 72 D 316, NSAM 141. The NSAM is paraphrased in the first paragraph of section 1 below.
3. On February 25 the White House announced that the United States was making a loan of $150 million to Argentina for its economic development under the Alliance for Progress. The money was for specific development projects and balance of payments assistance. (White House press release, February 25; Department of State Bulletin, March 19, 1962, p. 470)
4. The Embassy made this observation in telegram 1699 from Buenos Aires, March 21, in its assessment of the significance of the March elections. (Department of State, Central Files, 735.00/3-2162)
5. Lingle signed for Hamilton above Hamilton’s typewritten signature.