WESTERN, HEMISPHERE DEFENSE


653


   a. 10% of the acquisition cost.
   b. Cost of rehabilitation, including a complete filling of allowances
 and correction of material deficiencies.
   c. Cost of three weeks' logistic support during the familiarization
 and ready-for-sea period.
 I do not consider that the above prices should be inflexibly adhered
 to during the negotiations, so long as the provisions of the law are
 adhered to. Price deviations may be necessary for a number of tech-
 nical reasons, such as the desire of the recipient country for a change
 in the ammunition allowance, equipage, etc.
   If you concur in this recommended plan, the Department of Defense
will proceed immediately with negotiations with the naval authorities
of the countries concerned. When negotiations with a particular coun-
try have arrived at mutually satisfactory terms, final consummation
of the sale will be carried out in accordance with established Mutual
Defense Assistance procedures in effect for Section 408 (e) of the Act.
   Sincerely yours,                                  Louis JOHNSON


                              [Enclosure]
                   RECOMMENDED SALE PROGRAM
                                                          Approximate
                                                            sale price
                                                          to be used for
                                                          commence- -
                                Ships to be                 ment of
      Purchasing country       offered for sale            negotiations
Argentina                         2 CL                    $7, 935, 000
                                  1 DE                     1,300, 000
Brazil                            2 CL                     7, 935, 000
                                  1 AP, 8 DE*             *5, 278, 300
Chile                             2 CL                     7, 935, 000
                                  1 DE                     1,300, 000
Colombia                          1 DE                     1,300, 000
Venezuela                         2 DE                     2, 600, 000
Uruguay                           2 DE                     2,600, 000
Perut                             3 DE                   t3, 900, 000
  *These vessels are now held by Brazil under Lend Lease. [Footnote in the
source text.]
  tNegotiations to commence only after ratification by Peru of the Treaty
of
Rio de Janeiro (1947). [Footnote in the source text. The Peruvian Government
deposited its ratification of the Inter-American Treaty of Reciprocal Assistance
on October 25, 1950.]