Category: History

Why the Communists are Winning as of 1976...
by William D. Pawley & Richard R. Tryon

Eisenhower visits Rio.

Needed wheat for Brazil to avert starvation is denied by bureacratic failure in Washington. Not even Pawley could defat this one.

The communist menance expands.

Chapter Seven

I inherited a thorny legacy from my predecessor, Adolph A. Berle, Jr., who had stirred up an unnecessary tempest in a teapot by publicity expressing his “confidence” that Brazil would honor its promise for a forthcoming free election.
President Getulio Vargas, who had ruled the nation as its Strong Man for 15 years, had decided to step aside, if defeated in the political struggle between the Liberal bloc, spearheaded by Air Force Commander Eduardo Gomes, and the Conservatives, led by General Dutra.
A popular movement had swelled to nullify the elections and retain the traditionally dictatorial, but comfortably familiar, Vargas regime. Berle’s tactlessness sparked cries of “United States intervention” from Brazilians who damned the election as a “Yanqui” power play.
Dutra won the election. Vargas let it be known that he held Berle responsible for ousting him from power, voicing that never again would he set foot inside the American Embassy or the United States.
My work, therefore, was cut out for me. I was determined to do everything possible to remedy Berle’s faux pas, and mollify Vargas, in my estimation a dynamic and exceptionally able leader.
First, I felt out Oswaldo Aranha, Vargas’ former foreign minister and his good friend. He arranged for the three of us to lunch together at a discreet restaurant in the suburbs, where we would not make headlines. We killed the better part of the afternoon together, taking each other’s measure. We continued to meet, with growing rapport.
Gradually Vargas began to accept my assurances that the American people respected him as an outstanding patriot and were well aware of and grateful for the way his government had hastened to our side during World War II, in which Brazilian infantrymen mingled their blood with ours in Italy.
Not unexpectedly, my overtures to Vargas stirred up the natives in certain liberal compounds in Washington. I knew they were not representative of the views of either my country or its President, and so their animosity did not influence me.
While I was away from the Embassy delivering a Fourth of July speech, former President Vargas picked the propitious moment to don his cutaway and call personally at the Embassy to leave his card. There was great excitement among members of the Brazilian staff of the Residence. They recognized the significance of Vargas’ visits as a magnanimous burying of the hatchet in the best interests of both of our nations.
Agreeably surprised, I got in immediate touch with President Dutra to consult him on the propriety of my returning Vargas’ courtesy. “By all means,” he assured me. I decided to leave at once for Vargas’ apartment, where the door was opened by the latter’s daughter. I told her that I had come to pay my respects to her father.
After a few minutes’ delay, I was invited into the library, where, in front of the chair to which was ushered, I saw prominently displayed a handsome record player that had been presented to Vargas by Franklin D. Roosevelt, who autographed photograph rested on top of it. It dawned on me that there must have been some scurrying behind the scenes during my wait.
Vargas and I enjoyed a warm chat, in which my expectation grew that Getulio Vargas’ stature would raise him once again to powerful influence over Brazilian affairs. Sure enough, he was eventually to return to the Presidency and to friendly relations between Brazil and the United States.


The month of August, 1946, was highlighted by a visit from General of the Armies Dwight D. Eisenhower, Mamie, Chief of the Air Force Hoyt R. Vandenberg, Major General Howard McC.Snyder, and others. I wrote President Truman afterward, in part:“Never in my life have I witnessed a reception such as the Eisenhowers received. It seems that the entire two million inhabitants of the city of Rio at some time last week paid homage to General and Mrs. “Ike” . . .
Thousands lined the streets as far as the eye could see . . . I was told by President Dutra . . . that never in the history of his country has there been a similar demonstration. Even the late President Roosevelt’s trip to Rio did not produce that magnificent gesture of spontaneous admiration that has been given General Eisenhower.”
I still recall with amazement the patience, graciousness and poise with which Ike and Mamie met the pressures of a punishing schedule, which included a cocktail party and reception at the Embassy. Forced to keep matters within bounds, I issued strict instructions that the guest list be limited to 700 non-transferable invitations.
What followed is a commentary on Ike’s magnetism. Seventeen hundred guests arrived in a driving rain, creating a nightmarish traffic snarl that would only be compounded if anyone were turned away. I altered my instructions and admitted everyone, but it was worth it, even though it entailed our standing in line until midnight with the Eisenhowers greeting a long line of guests, with a seemingly interminable column of newcomers still waiting while other guests were leaving. Even an old soldier like Eisenhower could take only so much, so finally I managed to extricate the four of us for a quiet midnight supper upstairs in our private apartment.
Eisenhower spoke before the Brazilian Constituent Assembly. He was mindful that some Latin American Republics had entered the War on our side at the last moment, or had never made any contribution at all, while Brazil had sent a division to fight in the bloody campaigns in Italy. Ike expressed his gratitude to his listeners, and deeply moved then with masterful eloquence.
I seized every opportunity during my moments alone with Ike to enlist his support for policies at home that would help cement American-Brazilian friendship. Among these was a reparations adjustment, to assuage the pride of Brazilians in their contribution to our war effort, for which Brazil had not received a commensurate or realistic share of reparations.
Despite its formal nature, Ike’s visit marked the beginning of one of my most valued friendships and casts some light on my subsequent relationship with the Eisenhower administration. Therefore, I will reproduce his “bread-and-butter letter,” dated 10 August 1946:
“Dear Bill: I am quite sure that I have never before, on such short acquaintance, addressed any individual by his nickname. However, as Mamie and I look back on our five days in Rio, we find they have been so crowded with interesting events, in all of which you and Edna have figured so prominently, that definitely we feel the existence of a friendship that can scarcely be measured in matter of days or hours.”
“We keenly appreciate the trouble to which you have both gone in making our stay a pleasant one and have some faint conception of our indebtedness to you...
“I hope that you will never hesitate to communicate with me instantly on any matter of common interest, whether the subject be official or personal. It will always be a pleasure to answer you immediately. With love to Edna and warmest regards to yourself.
Cordially, Ike.”

Not once during my Ambassadorship had President Dutra turned me down when I asked a favor of him. Therefore, I leaped at the chance when he phoned me and said, “Mr. Ambassador, I need some help.”
He explained that he had run into some red tape from an official of the Commerce Department in New Orleans, who would not allow his ship to load 10,000 of the 40,000 badly needed tons of wheat bought by the Brazilian Army, until Brazil received an export license.
“I’ll get right on the telephone, Mr. President,” I assured him, ”and have an answer for you just as soon as possible.”
What followed is a frightening example of that gray area wherein even our President can be thwarted by someone down the line who chooses to block a decision and is in an official position to jam the gears.
First, I reached John Snyder, Secretary of the Treasury, who explained that while Dutra’s request was outside his jurisdiction, he would be glad to support me if the matter came up next morning’s cabinet meeting. Next I phoned Secretary Clint Anderson, at Agriculture, who told me, “No problem. We’ll be delighted to help.”
In rapid succession, I was given OK’s with no strings attached from Secretary Averill Harriman, who had the authority at Commerce, Bill Batt, in charge of export wheat control, and to tie the knot, Under Secretary Bob Lovett at State, who answered:
“Looks like you’ve already done my job for me. Sure, Bill, I’ll get an export license.”
A further thought occurred to me. Why not let President Truman receive credit for providing Brazil with the wheat promptly? I reached Matt Connelly at the White House and filled him in with my message for the President. Very shortly, he was back on the phone.
“Take this down, Bill,” he said. “The President of the United States pays his respect to the President of Brazil and says he is pleased that his Government will issue an export license for the 40,000 tons of wheat for the Brazilian Army. There will be no need to take the next month’s allocation for civilian consumption.”
I couldn’t wait to get to the Palace and deliver Truman’s message to a beaming Dutra, who immediately informed his anxious Chief of Staff of the good news.
Ten days later I was called to the Palace at Dutra’s request. He received me icily.
“What is going on?” he asked. “Does your President have no authority? The license has been denied.”
While I stood there, dumbfounded and chagrined, he continued:
“Therefore, we have just been compelled to sell the wheat in New Orleans at a loss to the Government of about $75,000.”
I couldn’t believe that the orders of the President, three cabinet members and the Under Secretary of State had been ignored. Neither, obviously, could Dutra.
“Mr. Ambassador, I’m not holding you responsible,” he said. “But I’m disappointed. And I can assure you that the Chief of Staff and military are, to say the least, upset.”
“With your approval,” I hastened to reply, “I’ll fly back to Washington and try to get to the bottom of this.”
Shortly I found myself closeted with Bob Lovett, who launched an immediate investigation. The culprits? A sort of self-appointed sub-cabinet of eager beavers from the State, Treasure, Commerce, Agriculture and other Departments, most of them fairly senior officials, who were in the habit of meeting weekly to decide what was best for the United States. These worthies had seized upon a few irregularities in Brazil’s past wheat transactions to block the license on the grounds that its issuance would establish a precedent for laxity by other countries.
The only wrong with this was that the officials concerned were not competent to evaluate the merits of Brazil’s request. They had no basis upon which to comprehend the crisis in our relations with Brazil which would ensue. They had caused irreparable damage to those relations, undermined Truman and his Cabinet and made everyone involved look ridiculous.
The culprits should have been fired for gross insubordination. They were not. Our cumbersome Civil Service procedures protect incompetence and the flouting of authority and render it will nigh impossible to discharge any Government employee of professional or executive grade. Moreover, the Federal Bureaucracy, when one of its members comes under fire, closes ranks and protects him regardless of the merits of the case.
I should add that I took my frustration to Truman, who promised to look into the matter. Nothing happened. Presumably, the disgraceful episode of the Brazilian wheat fiasco was only one of many instances of presidential authority being brushed aside by presumptuous underlings. It simply got lost in the shuffle.
I returned to Rio to face a distinct cooling in U.S.- Brazilian relations, and bruised feelings among the same leaders of the Brazilian military who had reacted with such heartfelt enthusiasm to the Eisenhower and Truman visits.


In 1947, toward the end of my tour of duty in Rio, I found to my dismay that the Brazil Herald, Rio’s influential English language newspaper, had fallen into the hands of left-wing elements. Its news stories and features were viciously slanted and hostile to the United States. Ralph E. Motley, the Atlantic Richfield executive who had come to Brazil in 1929 and who headed the American Society, was also deeply disturbed. We negotiated for control of the paper and got rid of the anti-American editor.
Racking my brains for an able editor and journalist would be willing to come down to Brazil, reorganize the Herald, and rebuild it into an organ worthy of the American colony, I remembers John D. Montgomery, a friend from Miami Beach. He proved to be the answer, transforming the Herald into the excellent publication that it is today.
My concern for a fair press was personal, as well as ethical. I had learned soon in my ambassadorship what it was like to be a journalist’s target, in the form of a scurrilous attack by Drew Pearson, a left-wing columnist of more influence than integrity, Pearson had the distinction of having been called a liar or worse by three American Presidents. The political motive of Pearson’s poison pen was not too difficult to fathom in the light of his sources and ideology. The “Acheson-Hiss group” in the State Department consistently leaked classified information to him and he consistently published it. 1
In his column of June 17, 1946, Pearson said that I applied “pressure to collect the Seligman National City Bank loan of $100 million to Peru under scandalous circumstances, including a bribe to the son of President Leguia . . .”
As the reader knows from the account of my service in Peru, and as Pearson knew, the loan had been floated way back in the 1920's under a fetid cloud which included the bribe cited by Pearson. His account was so worded as to imply that I handled the bribe - a quarter of a century before I went to Peru. He topped this off with:
“So, if Pawley takes over the key job of administering Pan-American policy (my name was indeed being mentioned), Latinos will interpret it as the end of the Good Neighbor policy and a reversion to the old days of when the Marines did the bidding of Wall Street.”
On June 25, 1946, I wrote Harry Luce, of Time: “Unfortunately, Drew Pearson is a friend of Spruille, and this effort to let it appear that I would be destroying the Good Neighbor policy is sickening.” Let me add that I don’t for one moment believe that Spruille Braden had any part in this guttersnipe attack. Whether his left-wing advisers, Duran and Michanowsky, were involved, is a different question.
Responding for Luce, who was on vacation, Time’s editorial director, John Shaw Billings, wrote back:
“We do out best to counteract Drew Pearson’s misinformation whenever we can, but the clipping you enclosed just seemed so inane and far-fetched that we decided to ignore it.”


Increasingly, the growth of Communist influence in Latin America as a whole, and Brazil in particular, engaged my anxious attention, dating from the first year of my ambassadorship. In 1946, I had become aware that certain planners in Truman’s administration were scheming to eliminate the FBI from Latin America. They planned to replace these experienced, discreet, capable and trusted intelligence pros by the creation of a new counterintelligence organization, to be controlled the Departments of State, Army and Navy.
After VJ Day and the end of the war, the State Department had absorbed hordes of persons “displaced” from the Office of Strategic Services, an organization that had been heavily infiltrated by Soviet agents, Communists and fellow travelers. When the plan to center intelligence inside the State Department was vigorously promoted in the spring of 1946, J. Anthony Panuch, the security official in State who was later fired, protested on the grounds that the O.S.S. had become “a huge, bloated organization with a confused mission, swamped with inexperienced, untrained --- and what is worse, unscreened -- personnel.” He added that the ideology of these people “was far to the left of the views held by the President and his Secretary of State” and charged that their ultimate objective was “a world commonwealth of Communist and Socialist states.”
The dangers in the proposed reorganization of the FBI struck me as enormous, prompting me to write a letter to Attorney General Tom C. Clark, marked personal and confidential, in which I stressed the following points:
Withdrawal of FBI agents from Latin America, where they had performed admirably, and the loss of their invaluable contacts, would be a tragic mistake; that in the minds of host countries, the ambassador would immediately become suspect as head of a spy ring; that all countries, and their police departments, respected and cooperated with the FBI as a separate agency, not beholden to our Foreign Service officers. I told Clark that I was anxious to know whether the President or his Cabinet had sufficient opportunity to weight fully the consequences of the change, for, if so, the decision would obviously have to stand.
Clark wrote back, thanking me for my comments with the partial reassurance that “the FBI will stay in, temporarily.”
On the same day, I wrote President Truman, enclosing a top-secret memo on the Brazilian Communist Party’s organization and activities and on the plans of the Dutra government to outlaw it.
During Eisenhower’s visit I first learned that “the boat had sailed.” The decision approving the new intelligence agency had already been made “on the highest level.” Although I had to accept the verdict, I felt that I could at least plead for postponement of its implementation. On August 29, 1946, I wrote to J. Edgar Hoover, with copies to Eisenhower and General Hoyt S. Vandenberg:
“I have felt that the Legal Attaches (FBI) and their assistants in the Latin American republics have been of invaluable service. They have been efficient, capable and discreet. I know of no incident in which the U.S. had been embarrassed because of their presence . . . “
I added that in view of the frightening power of the Communist movement in Brazil, I was deeply concerned that our FBI organization remain intact, under whatever name, until a safe transition period had passed, since the decision could not be reversed.
Fortunately, Dean Acheson’s dangerous plan to centralize foreign intelligence and counter intelligence in the State Department was defeated in favor of a new agency, the CIA. Hoover was not required to relinquish any of his agents to the CIA, absorbing them instead into his domestic FBI jurisdiction. I was able to keep the two outstanding FBI men we had in Brazil by the expedient of persuading Hoover to place them on leave of absence, where I employed both on my personal payroll long enough to permit an orderly transition.


In Brazil, the Communist movement represented a serious threat to inter-American cooperation. But the immediate problem, as I saw it, was one of countering Communism by persuading Brazilian leaders of the importance of enlisting the aid of American and other Free World private enterprise in the development of the countries enormous natural resources. Some Americans think of Brazil as just one of twenty South American republics. Actually, it is larger than Australia and only slightly smaller in area than the United States, with one out of every two South Americans speaking Brazil’s language - Portuguese.
If the narrow-minded and suspicious economic nationalism and statism that prevailed among many Brazilian politicians could only be discarded in favor of a broad constructive program of industrialization, based on direct private foreign investment, Brazil could begin to follow in the path. of the United States when we were in our formative stage. A “Colossus of the South,” with a rising standard of living for the masses, pointing the way for other Latins, could be the best answer to Communism’s acid card - poverty, and the exploitation thereof.
I had barely started on this road when I encountered unexpected road blocks. During wartime, we had developed about a dozen imaginative programs in which the United States and Brazil cooperated to improve conditions for the impoverished. Orders came from Washington, with which I was forced after vehement protest to comply, canceling all of them.
On another front, I informed President Dutra that friends of mine, well-versed in oil exploration, believed that Brazil might be sitting on one of the largest untapped petroleum reserves in the world. Oil could be the key to unlocking Brazil’s vast natural wealth. Dutra and others found my enthusiasm contagious.
Before long, we secured a commitment from Standard Oil of New Jersey and other oil companies for a half billion dollars, following a trip I made to New York to enlist their support. I visualized that control would eventually pass from foreign to Brazilian investors.
I invited the son of former President Herbert Hoover, and his associate Duke Curtice, both international authorities on oil legislation, to fly down and assist in preparation of the wisest possible law for both sides. Hoover’s mission was denounced by shortsighted, or anti-U.S., factions as “an affront to Brazilian autonomy.” The Brazilian Congress bowed to their wished and wrote its own law, cluttered with restrictions and technicalities which would discourage foreign investors.
Today, Brazilian oil production is relatively small, where it might well have been a “Niagara Falls.” It could have eased, if not eliminated, our energy crisis and our dependence on petroleum shipped from the Middle East, to say nothing of a better life for every Brazilian as a by-product. In addition to the importance of oil, which I stressed whenever possible in my press interviews, I added this:
“Brazil should give great masses of dislocated Europeans, of technical and cultural ability, and, in some cases with financial resources, an opportunity to find an outlet, a new world made possible by more liberal immigration laws ... We shall thus have a healthier world when the unemployed and homeless have another opportunity and can again use their talents and abilities.”
I reminded our officials that foreign investment and immigration had helped make possible the American Dream. But again, narrow-mindedness, and nationalistic policies, prevailed.
From that time on, the Red challenge to Pan-America was to dominate my waking, and often my sleeping hours.

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