835.24/850½: Telegram
The Ambassador in Argentina (Armour) to the Secretary of State
[Received 9:45 p.m.]
2526. Department’s A–434, December 3, 7:15 p.m.96 Embassy agrees to 14,088 short tons as allotment of estimated supply iron and steel and no objection is offered to advising the Central Bank of this allocation.
Entire matter was discussed with Liaudat and Pina of the Central Bank and the following points will be of interest to the Department.
It is recommended that no formal announcement be made to Argentine Government of restriction of Certificate of Necessity issued to Government departments and [as] such announcement might be considered discriminatory. The Central Bank could issue Certificates of Necessity to Government department, Embassy would recommend rejection to Board of Economic Warfare who would refuse to issue export license, Embassy would be advised of such action by cable and the Central Bank, on receiving such advice from Embassy would redistribute material to commercial entities. Government departments thus would be gradually reconciled to their inability to obtain materials.
- 2.
- Representatives of American steel mills continually advise the Embassy that orders for less than carload lots of iron and steel are [Page 370] impractical both from standpoint of manufacturing and inland shipping in the United States. Central Bank’s present method of distributing Certificates of Necessity provides for all consumers and importers receiving proportion of 1941 consumption or imports. With an allocation of 14,088 short tons thousands of firms will be issued Certificates of Necessity for insignificant amounts of material. Central Bank requires formal statement from Embassy as to steel mill representatives contention above in order to change distribution system. Certificates of Necessity for carload lots would allow Embassy to control more effectively both ultimate use and destination of materials. It would be appreciated if the Department would instruct the Embassy to advise Argentine Government that less than carload lots are impractical.
- 3.
- The Central Bank will print new Certificates of Necessity in color different from those of 1942. Embassy requested three copies with the idea of instituting the Randall-Robbins plan immediately this is approved in Washington. It is understood that under this plan two copies of certificates would be forwarded to Washington with Embassy’s recommendation, one copy to be returned for delivery to the Central Bank with notation of Board of Economic Warfare’s final action.97 It would be most practical to start this consignee control plan with the first 1943 Certificates of Necessity issued by the Central Bank.
- 4.
- Small consumers necessarily have to depend on established reselling firms for their requirements. In the distribution first quarter Certificates of Necessity both the Central Bank and the Embassy consider it highly desirable that part of allocation be given to reliable resellers approved by the Embassy. It would be much more effective from a Proclaimed List standpoint to control the activities of these firms than those of thousands small importing manufacturers. Please advise by cable if export licenses will be issued for steel to reselling firms when the ultimate consignee and end-use is not given.
- 5.
- End-use control will be exercised by the Embassy under the Randall-Bobbins plan. This can effectively be accomplished with the assistance of the Central Bank and the Argentine iron and steel rationing commission once the material is in the country but it is [impossible?] to obtain a true end-use picture at the time the Certificate of Necessity is issued.
- 6.
- Name and address of supplier in the United States will appear on all Certificates of Necessity. The Central Bank inquires if space [Page 371] provided on certificate form for previous orders placed is still necessary.
In connection with this cable refer voluntary report No. 1549, December 4, 1942.98
If distribution resolution is to be changed and if the Central Bank is to issue Certificates of Necessity before first of the year I suggest that an immediate cable reply be made.