840.51 Frozen Credits/9490: Airgram
The Secretary of State to the Ambassador in Argentina (Armour)
A–961. The Department has carefully considered the memorandum of the Central Bank enclosed with your despatch no. 8436 of January 29, 1943 and the Memorandum of Comments thereon enclosed with your despatch no. 8736 of February 13, 1943.81
Although it is evident that Argentina is far from complying with the Resolutions of the Washington Conference, the Department believes that there are certain difficulties in presenting an indictment to the Inter-American Financial and Economic Advisory Committee in the form of a critique of the deficiencies in existing Argentine controls. Among the difficulties are the following:
- 1.
- The Argentine measures are long, technical and involved. In order to be intelligible, any critique would have to go into detailed explanations of such length that the indictment would lose its effectiveness.
- 2.
- A lengthy critique would inevitably afford the Argentineans opportunities for rebuttal which in turn would have to be answered. Even assuming that in the end our case would be convincing, a drawn out controversy would not seem advisable or effective.
- 3.
- Since the Argentineans are in a better position to ascertain the facts pertaining to the operation and results of their controls, we might find ourselves unable to substantiate some of our charges or at least find ourselves in the position of having to resort to quibbling.
- 4.
- In those areas where the Argentine measures are most clearly deficient and where the criticism could perhaps be effectively brief and to the point, whatever criticism we make would most likely be also applicable in some degree to all the other American republics that have not declared war. The absence of vesting, forced sale and liquidation measures is an example.
In view of the foregoing, the Department believes that an indictment of Argentina’s failure to cooperate in the field of economic warfare should take the form of a presentation of a series of actual transactions of benefit to the Axis in its war effort from an economic or financial point of view which the Argentine Government either made no effort to discover or passively permitted or actively abetted. Examples might be the Dresdener Bank case, the publication Clarinada, allocation of newsprint to El Pampero, radio beams to Axis countries, et cetera. Preferably the transactions chosen should be of the sort that have not taken place, or have taken place to a lesser degree, in the other American republics, in order that the deficiencies peculiar to the Argentine can be spotlighted.
[Page 476]In this connection, the survey which you are preparing under point 5 (a) set forth in the Memorandum on Economic Policy toward Argentina of March 4, 194382 may provide the basis for preparation of an appropriate indictment. Please inform the Department of the progress being made on this survey, of the lines of approach that you are taking and of the prospects of uncovering information that substantial economic or financial aid to the Axis has been or is being made by Argentine facilities or residents. This information would be helpful to the Department not only in formulating plans for preparing an indictment of Argentina’s failure to cooperate but also in affording a basis for possible reorientation of certain aspects of our economic warfare effort in the other American republics generally.
Your own views, as well as the information above mentioned, are urgently requested.