NELSON AND THE GOOD NEIGHBOR POLICY
Latin America had traditionally been of secondary importance to U.S. relations with Europe, the Far East, and even the Middle East. Indeed, in the years since President James Monroe promulgated his doctrine in 1824, U.S. policy toward Latin America was characterized by long eras of neglect punctuated by periods of political and military intervention in countries such as Cuba, Mexico, Panama, and Nicaragua.
Even President Franklin Roosevelt’s Good Neighbor Policy was more a promise to refrain from direct intervention in the affairs of our sister republics than a program of assistance and cooperation. By the end of the decade, however, the United States adopted a more progressive policy, and to implement a portion of it, FDR appointed Nelson to the newly created post of Coordinator of the Office of Inter-American Affairs in 1940. Nelson defined his task as showing Latin Americans that the United States was truly a “good neighbor.”
Nelson assembled an exceptionally able staff, and his group crafted programs that addressed Latin America’s fundamental problems in public health, education, and economic development. Nelson also inaugurated a policy of “cultural diplomacy”—sponsoring radio broadcasts in Spanish and Portuguese; hiring Walt Disney and Orson Welles to produce movies with a Latin flavor; and dispatching ballet corps, glee clubs, musicians, and academics on tours and welcoming their Latin American counterparts to the United States. He cultivated the leaders in every country, and his charisma and skills in dealing with people created friends for our country throughout the hemisphere.
Nelson laid the foundation for a new “Inter-American” system, a true economic and political partnership within the hemisphere rather than just a security alliance. Perhaps his greatest moment came at the Chapultepec Conference in Mexico City in February 1945. It was there that he, by then Assistant Secretary of State for American Republic Affairs, forged a hemispheric consensus on the structure of postwar international organizations. Against great odds Nelson held this bloc of votes together behind the United States position at the U.N. Organizing Conference that spring in San Francisco.
Nelson’s successes came at a price for him at home. His tendency to act independently alienated the career diplomats in the State Department, who felt that they, not he, should control policy. With the death of his mentor, Franklin Roosevelt, Nelson quickly found his activities circumscribed and his advice ignored. He resigned in late 1945 and returned to New York.
Without Nelson’s strong advocacy, U.S. relations with Latin America quickly withered. During the war Latin Americans were led to believe that the United States would provide massive economic aid and technical assistance once the crisis had passed. In fact, little of it materialized; instead, the United States poured billions of dollars into the reconstruction of Western Europe and Japan through the Marshall Plan. Latin America received little more than paternalistic advice and sermons.
With government aid on the decline, Nelson shifted his Latin American focus to the private sector. In early 1947 he formed the International Basic Economy Corporation (IBEC) as a vehicle to invest in productive enterprises in Latin America. Nelson was the principal shareholder, but Father and my brothers and I also took shares. My investment of $1 million required an invasion of my trust, but I wanted to show my strong support for Nelson’s effort. IBEC invested in supermarkets and a fish cannery in Venezuela and, in Brazil, grain elevators, a farm machinery company, and the first mutual fund established outside the United States.
Nelson’s first initiative, even before IBEC, had been the American International Association for Economic and Social Development (AIA), a not-for-profit that provided technical assistance throughout the region. Somewhat later Nelson formed the IBEC Research Institute in Brazil to conduct basic scientific research on hybrid corn, grass seeds, soybeans, and coffee plants. I served on the AIA board and later chaired the institute’s board, whose work in improving crop yields has been an essential element in Brazil’s economic growth.
Nelson’s wartime involvement in Latin America and the subsequent impact he made through the private sector earned him enormous respect and sincere gratitude throughout the region. I believe there was no other American as popular as he was at that time. Nelson derived great satisfaction from his accomplishments and the many friendships he formed there. It is my impression that he looked upon his Latin American years as the happiest and most rewarding of his life.
THE ALLIANCE FOR PROGRESS
The decade of the 1950s was marked by increasing tension in U.S.-Latin American relations. This was the product of many factors: growing nationalism and anti-Americanism, disappointing economic growth, and the perception, after the CIA-sponsored Guatemalan coup in 1954, that the United States preferred dictators over democracy. This resentment came to a head during Vice President Nixon’s trip through South America in 1958 when he was greeted by howling mobs and huge anti-American demonstrations in Peru and Venezuela. That experience and Castro’s triumph in Cuba a few months later forced the Eisenhower and then the Kennedy administrations to reassess U.S. policy toward the region.
President Kennedy’s announcement of the Alliance for Progress in early 1961 met with an enthusiastic response throughout the hemisphere. The basic purpose of the Alliance—“to enlist the full energies of the peoples and governments of the American republics in a great cooperative effort to accelerate the economic and social development of the participating countries of Latin America”—was timely and necessary. Its goal of achieving an economic growth rate of 2.5 percent throughout the hemisphere and of implementing an array of social and political reforms had broad support in the United States and Latin America. How these goals would be accomplished was the question.
I strongly supported the President’s initiative, not least because it meant there would be an energetic response to the threat presented by Castro’s Marxist regime in Cuba and Communist subversion in other parts of the hemisphere. However, I felt the Alliance had to be a public-private partnership if it was to be successful, while its U.S. architects had a decided preference for state-directed economic development. They assumed the nations of Latin America had to reach the “takeoff” stage of economic growth before anything else could happen, and the quickest way to get results was to put the government in charge.
The vast majority of Latin American political leaders were sympathetic to this approach. The presidents and prime ministers who attended the Alliance for Progress organizational meeting in Punta del Este, Uruguay, in August 1961 eagerly embraced Kennedy’s proposal and the promise of significant American aid. The lone exception was my old friend from the London School of Economics, Premier Pedro Beltrán of Peru. Pedro pressed—with diplomatic restraint, to be sure—for a stronger private sector role and for eliminating the restrictions on foreign trade and investment imposed by Latin American governments. Unfortunately, Pedro’s plea was largely ignored as the nations of the hemisphere, urged on by the “New Frontiersmen” in Washington, rushed to implement the Latin American Marshall Plan.
ORGANIZING THE AMERICAN PRIVATE SECTOR
The Kennedy administration, in an effort to mobilize the business community in support of the Alliance and to forestall private sector criticism, created the Commerce Committee for the Alliance for Progress (COMAP) under the leadership of Secretary of Commerce Luther Hodges. J. Peter Grace, CEO of W. R. Grace and Company and a longtime booster of Latin America, was named chairman, and I was one of about two dozen businessmen appointed to its board.
Despite a huge public relations effort, enthusiasm for the Alliance soon faded, and by early 1962, President Kennedy’s request for a $1 billion congressional appropriation to fund Alliance programs had been cut in half. In an effort to rally support, Peter Grace wrote a fiery 140-page report on behalf of COMAP, denouncing Congress and arguing for $2.5 billion in aid.
While I agreed with Peter that the United States had to remain engaged in Latin America, to my mind throwing good money after bad was not the way to solve th
e problems. I felt Peter was so obsessed by the “Communist menace” that he was willing to sacrifice everything, including good economic sense. I talked with Walter Wriston, then president of City Bank, and Emilio (Pete) Collado, a director of Standard Oil of New Jersey, COMAP members who shared my views, and we issued a statement dissenting from Peter’s position and urging a reappraisal of the Alliance.
We suggested a basic reorientation of the Alliance’s focus, emphasizing the role of “private enterprise and investment” and placing “primary stress on improvement in the general business climate as a prerequisite for social development and reform.” We urged governments throughout the hemisphere to remove foreign exchange controls, tame inflation and budgetary deficits, and “remove the network of other controls which restrict enterprise and sustain local, high-cost monopolies.”
In conclusion we argued that free enterprise had to become the basis of real economic growth in Latin America, and that “the United States must change its role from one that emphasizes short-run economic palliatives combined with recommendations for sweeping social and economic reforms to one that places the greatest emphasis on the longer-run goals of creating an environment in which freedom of the marketplace is recognized for what it is: a major pillar of free and prosperous societies.”
Our direct challenge to official U.S. policy was roundly denounced in Latin America as an affront to national sovereignty and a cover for U.S. economic penetration of the region.
Convincing the U.S. government to reverse course needed far more than words; it also required a concerted effort by the private sector. Therefore, in the summer of 1963 I began contacting members of COMAP and leaders of other U.S. business groups with a Latin American focus, urging them to meet to discuss forming a new organization. The response was overwhelmingly positive, and at a meeting on October 15, 1963, we formed the Business Group for Latin America (BGLA).*
Meanwhile, I lobbied the Kennedy administration to give the private sector a stronger voice in the formulation of Latin American policy. I met with National Security Advisor McGeorge Bundy twice to press the issue. Mac must have convinced the President that the criticisms of the Alliance had merit because the President wrote me that our group could “provide an exceptional opportunity for improved consultations with the United States Government and the business community on certain aspects of U.S.–Latin American affairs” and asking us to consult with federal agencies on a regular basis for this purpose. A meeting was arranged for this purpose on November 19, 1963, at the “F” Street Club with senior State Department officials to discuss our concerns. It was clear the Kennedy administration was ready to contemplate real changes in its Latin American policy. Tragically, President Kennedy was assassinated three days later.
SIDE-BY-SIDE WITH JFK
I first met Jack Kennedy in London in 1938 at his sister Kathleen’s comin-gout party at the American embassy. Although we were contemporaries at Harvard, we moved in very different circles. It was almost twenty years before we met again. By then Jack was a U.S. senator and a leading Democratic candidate for the presidency. I called on him in Washington a few times on bank-related matters, and he once visited Peggy and me at our New York home.
Jack was gracious, polished, and extraordinarily well informed on many subjects. While we differed on a number of domestic political issues, he and I were in broad agreement on American foreign policy—particularly the military and ideological threat posed by the Soviet Union and the need for the United States to play a leading role internationally in countering it.
In 1958, Jack was elected to the board of overseers of Harvard, on which I was already serving. Jack considered this a great honor, as did I. It was one of the few private organizations on which he continued to serve after he was elected president. While he never attended another overseers meeting in Cambridge, he invited us to hold a meeting in Washington and hosted a dinner for us at the White House, at which he did me the honor of placing me next to him.
In May 1962, Peggy and I attended a White House dinner for André Malraux, the well-known French writer and minister of cultural affairs. During the reception the President took me aside for a brief conversation on the state of the U.S. economy. As we parted, he asked me to set down my ideas in writing, which I proceeded to do. The President then responded with a letter to me. Although there were obvious points of disagreement, both of us agreed a tax cut would help get the sluggish economy moving again. Henry Luce asked to see the letters and found them so intriguing that he published them side by side in Life magazine in July 1962.
Jack’s tenure was so brief that he did not leave behind much of a legislative legacy. But his immense popularity, a result of his personal charm, intelligence, and great courage, coupled with the tragic circumstances of his death, has turned him into a mythic figure.
Kennedy’s death cut short the promise of the Alliance for Progress. Although I believe the original emphasis of the Alliance had been misplaced, I think that on this, as on many other issues, Kennedy had learned from his mistakes and the mistakes of his advisors. Had he lived, the private sector would have played a stronger role in economic development within the hemisphere. In fact, the Kennedy administration had already shifted its emphasis by late 1963 and was urging Latin American countries to modify their protectionist policies.
In the aftermath of the assassination, however, the new administration did not fully grasp this opportunity. Despite the best efforts of Thomas Mann, the able assistant secretary for Latin America, the Johnson White House, preoccupied with its own War on Poverty in the United States and the real war in Vietnam, lost interest in Latin America. The Alliance for Progress gradually faded into insignificance. It would be another twenty years before another opportunity to affect the course of Latin American policy would arise.
THE COUNCIL AND THE CENTER
With Latin America relegated to the back burner in Washington, it was left to the private sector to pick up the slack. In 1965 I assumed the chairmanship of both the Council of the Americas and its new cultural adjunct, the Center for Inter-American Relations (CIAR). The council would focus on strengthening the involvement of the U.S. private sector in Latin America and would attempt to broaden public awareness in the United States of Latin America’s rich cultural heritage.
From the beginning the council’s membership included many of the country’s largest and most important corporations, representing about 90 percent of U.S. investment in Latin America. Because of this the council quickly emerged as a key player in the ongoing debate over U.S. policy toward Latin America.
The CIAR, for its part, introduced New Yorkers and other Americans to the diversity, beauty, and sophistication of Latin American artists, musicians, and writers. Among other activities the CIAR held the first one-man show in New York for Fernando Botero, the great Colombian painter; sponsored the first New York auction of Latin American art at Sotheby’s, which inspired both Sotheby’s and Christie’s to begin their own auctions of Latin American art; subsidized the translation into English of great Latin American writers, including Gabriel García Márquez’s powerful One Hundred Years of Solitude; and published Review magazine, a literary quarterly that for twenty-five years has brought outstanding but lesser-known Latin writers to the attention of the American public.
ANGEL IN THE FAMILY
In 1965 the council and the CIAR acquired a permanent home on the Upper East Side of New York through a stroke of good fortune. Our benefactor was Margaret de Cuevas, the daughter of my aunt Bessie Rockefeller. Bessie died in 1906 when Margaret was only eight, and she was raised in Europe by governesses with little oversight from her father or other family members. Grandfather was inordinately fond of his eldest granddaughter. Bessie was his favorite child, and her death was a great tragedy for him. He often invited Margaret to Tarrytown and Ormond Beach, Florida, and it was in Florida in the mid-1920s during one of my stays with Grandfather that I first met Margaret. Although she was almost twenty years older than me, we
became good friends.
Because Grandfather felt that adequate financial provision for Margaret had not been made, as it had for his other grandchildren, she inherited his residual estate of $25 million, which was held in trust for her. After the war Margaret and her husband, George, Marquis de Cuevas, lived in France where George ran the Ballet de Monaco, a money-losing activity that Margaret kept afloat. Margaret did maintain a home in New York on East 68th Street next to the Council on Foreign Relations, but she visited it infrequently.
As we looked for a headquarters for the CIAR and the council, I learned that Margaret had just bought the handsome mansion across 68th Street from her home in order to prevent it from being demolished and replaced by a multistory apartment house that would have cut off her light. I felt sure she had no need for an additional home, so asked her if she would be willing to give the property to the CIAR. Since George, who had died in 1962, was a Chilean by birth, I hoped she might look favorably upon giving it to an organization dedicated to improving relations with Latin America. After some hesitation she agreed to do so. This proved to be the answer to our prayers.
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