Foreign Relations of the United States: Diplomatic Papers, 1943, The American Republics, Volume V

840.51 Frozen Credits/9104: Telegram

The Secretary of State to the Ambassador in Argentina (Armour)

Washington, January 25, 1943—10 p.m.

125. Your telegram 86, 5 p.m., January 14 [13], 1943. Department is, of course, greatly disturbed by the remittance in question and approves your protest to the Foreign Office. So long as such remittances are authorized, the Department must, of course, question the utility of any joint study concerning Argentine controls by you and the Central Bank and the good faith of the Bank with respect to such a study. Please consider the desirability of terminating this study and submit your recommendations to the Department.

Department is considering the advisability of taking up the remittance with the Inter-American Financial and Economic Advisory Committee⁷¹ as a flagrant violation of Argentina’s inter-American commitments and of stimulating appropriate publicity in this country. The matter of publicity has been presented on a tentative basis to the British Embassy with a view to determining the desirability and feasibility of action by the British here which would indicate their full agreement with the stand of this Government. The approach to the Inter-American Committee and the complementary publicity, which might be deemed a sign of weakness if not followed by more vigorous action, are still tentative, and your recommendation by cable is urgently requested.

The action of the Central Bank is particularly disturbing in view of the fact that it had presented the following proposition to the Bank of England. Payments which were becoming due on Argentine bonds owned by the British would be made by Argentina in the British clearing account rather than through the purchase of free sterling. In connection with this arrangement the Central Bank was to agree to make future payments on Argentine bonds held by the enemy in gold blocked in Argentina instead of remitting Swiss francs. While this proposal was receiving the careful consideration of the British authorities, the Central Bank, without any previous notice, authorized the payment to the Dresdener Bank.

The Department will, of course, attempt to coordinate financial policy with the total economic and political Argentine policy.

Hull

71. Organized on November 15, 1939, as a result of the Meeting of the Foreign Ministers of the American Republics at Panama in that year; see Department of State Bulletin, March 2, 1940, p. 267.