840.51 Frozen Credits 35/231
The Ambassador in Argentina (Armour) to the Secretary of State
[Received December 15.]
Sir: I have the honor to advise the Department, for the purpose of the record, of the substance of a conversation that occurred on [Page 511] November 17, between members of the Economic Unit of the Embassy staff and officials of the local branches of the National City Bank of New York and the First National Bank of Boston.
The conversation occurred during the course of a luncheon given by Mr. Whitman, Manager of the local branch of the National City Bank, and attended by Messrs. Camp, Robbins, Mann, Skelton and Randall of the Embassy, as well as Messrs. Wilcox and Driscoll, Vice President and pro-General Manager, respectively, of the Boston Bank, and Mr. Welsh, Vice President of the National City Bank, and Mr. Arnold, recently transferred to the Buenos Aires branch from Peru.
The introduction to the discussion was a statement by Mr. Arnold to the effect that his experience of several years in Peru and of recent visits to Ecuador and Bolivia indicated that those countries were probably not giving any more, if as much, cooperation to the war effort of the United States as Argentina. From this starting point the representatives of the banks immediately referred to the recent blocking of the Argentine Bank of the Nation and the Bank of the Province of Buenos Aires, criticizing that action as ill conceived, both from the standpoint of representing pressure on a country whose cooperation was better than that of various others and, more particularly, on the grounds that they believed it had caused the United States inestimable harm and would accomplish little or no useful results. They based part of their position on the belief that the total amount of remittances to enemy territory, overdrafts and loans to Proclaimed List firms and other operations contrary to Treasury regulations were insignificant, compared to the total operations of the banks, and, further, that these banks had operated as nearly within Treasury restrictions as they were able to do considering local circumstances. The group as a whole emphasized their opinion that the United States acted unwisely and that our policy should be constantly aimed at an objective whereby any action taken would give promise of accomplishing more than we might possibly lose. They felt, for example, that a strong policy towards Argentina would be thoroughly justified only if complete, which meant the cooperation of Great Britain, even to the point, if necessary, of risking momentarily the possible loss of supplies of foodstuffs now purchased in this country. In a word, they felt that no half-way measure could accomplish anything but greater ill will, into which category they definitely placed the blocking of the above mentioned banks. The group went so far as to express the opinion that by this action the United States now found itself in a position whereby some new action must be taken in such a way as to save its own face. They proposed that it would be unfortunate were the two banks immediately unblocked, as to do so would be to lose even more ground.
[Page 512]They urged some other immediate action which would embody some system whereby the banks would be allowed a considerable liberty of action under supervision, preferably exercised in Buenos Aires, since, according to them, previous experience convinced them that any requirements involving the issuance of licenses in Washington would carry with them relatively interminable delay.
An additional point suggested, particularly by Mr. Welsh and not contradicted by any of the others, was to the effect that it was the task of our Government to find some way of knowing the Argentine administration officials and of working out a system with them which basically would be one of cooperation, designed to give the United States the most possible of those things and controls which she needs for the conduct of the war. They recognized clearly that the complexion of the present Argentine Government was very unsatisfactory…. They admitted the totalitarian tendencies of this Government and expressed again the belief that the preferable line of action would be joint opposition by at least the United States and Great Britain, but they insisted that without this, cooperation rather than partial opposition would prove the most enlightened policy.
They pointed out that numerous of the British Colony are still in one way or another in touch with Argentine Government officials, impressing upon them that Britain understands the Argentine position, whereas the United States fails to do so.
Respectfully yours,
First Secretary of Embassy