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

346. Telegram From the Embassy in the Dominican Republic to the Department of State¹

Santo Domingo, June 20, 1962, 5 p.m.

2460. For Assistant Secretary Martin from Ambassador Martin pass to White House. Embtels 2438, 2439, 2444, 2448, 2455 through 2459.² Would be difficult to overstate the depth, power and danger of Dominican reaction to the Cooley sugar quota legislation and the continuing uncertainty over the $22 million.

Even our best friends here feel betrayed. They feel the US Executive has, by its promises of help, put them out on a limb—and now Congress has sawed the limb off.

Despite sporadic riots led by leftist agitators, the Dominican people at large are basically friendly to us. They have clung to their somewhat childlike faith in us despite the Marine occupation and what many regard as our support of Trujillo. More, they have looked to us almost desperately for help. They tend toward dependency. Their history since 1844 is replete with their attempts to make themselves the protectorate of a larger power—Spain, France, England, US. This spring their most constant theme has been, “you must help us.”

President Kennedy said in January he would. Pico came and did.³ So did the Embassy. News stories pointed with pride. The shaky Council of State, with our guidance, survived and began to grow stronger. Of late uneasiness has spread because neither Council nor AID has made any improvement in the daily life of ordinary Dominican. To counteract this we had planned to present to Council Friday important program to put Dominican fiscal house in order and crash program in housing and roads to speed progress and create employment during critical September layoff period. We cannot do so now. For now in the Dominican view the worst has happened: the quota is being cut.

According to Finance Secretary Ramon Caceres Troncoso, proposed quota would reduce GODR revenue this year by RD $20,000,000. This is made up of RD $14,000,000 in reduced income from sugar, estimated RD $5,000,000 from reduced customs duties due to lower imports, and RD $1,000,000 in reduced income from other taxes due to lower level of economic activity. Figures assume that DR expected to sell 950,000 tons to US in 1962, that DR would have received the $22 million in any case, that DR would sell only 175,000 tons to US in the second half 1962, and that prices would be 5.29 cents per pound on US market and 2.66 cents on world market. These estimates depend on costs, and no one really knows what they are. Also they do not allow for shortfalls and may anticipate too low world price. Bramble⁴ says the Cooley quota would bring total this year $82,000,000 and shortfalls might raise total to $89,000,000, a reduction of $11 million, not the $20 million Caceres estimated. (A 950,000 ton quota would yield $100 million.) Next year, Cooley quota would yield only $77 million, a drop of $23 million from what Dominicans had expected this year. Whole question of course is greatly complicated by heavy ownership of government itself in sugar industry, a legacy of Trujillo. Bramble concludes overall that the purely economic effects of Cooley quota are not so serious as represented in public statements here. Responsible Dominicans know they must diversify out of sugar. But they need time (5 years, most say).

But economic effects aside, the political effects are all but disastrous.

The Council of State has staked everything on US support. Now that that support has, in Dominican view, been suddenly withdrawn, some Councillors instinctively feel that Council can save self only by setting its face against US and going it alone. Others do not go so far but feel need to somehow disentangle Council from US. Councillors therefore propose to shut the sugar mills, cut wages, tighten belts, and go it alone. They propose to stop—and in fact have already stopped—spending any more of the $25 million US loan made in January on ground they cannot obligate future government to debt it cannot pay since its sugar quota is cut. They propose to repay that portion of the loan already spent from the $22 million. This has not been voted formally by Council but is sense of Councillors and they have already stopped projects. President Bonnelly is attempting stave off formal vote and frozen position. If vote taken now, Council would probably vote to stop projects.

Formal vote or no, this stops Alliance dead. It threatens suicide of Council, since if Council tries to go it alone, it will probably fail. Austerity—isolation policy can bring only more unemployment, misery and unrest. Will open door to left, and if left rises, military right probably would take over. So ends moderate democracy here.

Of course, if AID had gotten off ground and projects were already actually employing people, Council would have difficulty stopping them. But AID has not. So Dominican pressure to continue program—which might be termed by critics only a pile of papers anyway—is likely to be minimal.

But although this amounts to a strike by the Council against the Alliance and against itself, it would be mistake to regard it as calculated attempt to blackmail Congress. Method of going about it refutes that theory. Moreover, explanation lies in Dominican character, history and current political situation. Like children, they feel betrayed, and so are sulking. Danger is their sulk may carry them to suicide. Time and again in their history they have shown unconscious tendency to destroy their country when unable give it away. And they genuinely fear foreign debts, for once foreign debts led to Marine occupation and previously had several times led to deep trouble. In current politics, left has recently made headway with anti-American campaign. Council has resisted, aligning self with US. Now its position has been totally undermined. So is ours. In past when $22 million seemed in jeopardy or when world quota system was proposed, I have reassured Dominicans that US would never abandon DR. These assurances sound hollow now. Our policy has envisaged further loans or grants if needed. Council now would reject further loans and perhaps even grants.

Amid near-panic here, President Bonnelly is attempting to hold firm, restrain impetuous Councillors and get through next 2 weeks. He alone is keeping head.

Best thing that could happen from Dominican standpoint would be stalemate in Senate, with present legislation extended. Impossible estimate effect here if world quota bill wins out. Passage Cooley bill as stands would be disaster. (If Cooley bill fails, we must move with lightning speed to salvage the $22 million provision by separate bill or by immediate (repeat immediate) aid grant, for Dominicans working to defeat Cooley bill overlook fact it alone at present contains their $22 million.)

Whatever happens in Senate, much of the damage done this week cannot be undone. For faith in our support has been eroded, and Dominicans, who thought all would be well when Trujillo fell and thought we would not let them down once they got rid of him, will not now feel quite the same firm faith in us.

We may not like Dominican emotionalism. But all we have here are Dominicans. And it is really too much to expect any people, after 31 years of tyranny, in the world today, with communism on the move, to build democratic society without massive US guidance and support.

We face here dangerous forces. The Castro-Communist forces are mobilizing. The military right is biding its time. Only the Council is on democracy’s side. And however much it may fumble and disappoint and irritate us, it is nonetheless democratic government which sees the Dominican future alongside the US. We helped create it. If it falls, we may not get another such chance.

Congressional action on sugar has dealt an extremely heavy blow to our efforts to build democratic bastion in the Caribbean. We could scarcely have handed better weapon to Castro and Moscow. They must be delighted. They have said all along that only bloody revolution, not peaceful democratic evolution, could solve Latin America’s problems. To those on sidelines at times like this we must appear to be helping prove them right.

I understand something of complexities and difficulties of sugar legislation. I am confident Congress understands the vital importance to us of this republic in our own back yard. But I wonder if Congress understands fully how seriously its current action is undermining our policy here.

Martin

1. Source: Department of State, Central Files, 411.39/6-2062. Confidential; Niact.
2. Telegrams 2438, 2439, 2444, 2448, 2455-2459, dated June 18-20, are ibid., 411.396/6-1862 through 411.396/6-2062.
3. Following its resumption of full diplomatic relations with the Dominican Republic, the United States, through the Agency for International Development, made a loan of $25 million to the Dominican Government. Puerto Rican banker Rafael Pico was sent to administer the aid temporarily.
4. Harlan Bramble of AID was sent to administer the $25 million loan in late spring.