611.3531/1–449
The Ambassador in Argentina (Bruce) to the Secretary of State
secret
No. 7
. . . . . . .
Situation in Argentina
Conditions in Argentina have deteriorated during recent months to such an extent that it is impossible to see a solution under the present set-up. Maroglio, President of the Central Bank, went to the United States recently with some fairly definite plans for increasing exports to the United States, and a vague obscure idea of obtaining a large credit which would not be a “credit”. Miranda, President of the Economic Council, has stated several times publicly that he would “cut off his hands” rather than have any part in obtaining a foreign loan. President Perón2 has been almost as categoric in denouncing the idea of a loan to Argentina. If the time comes when Miranda has to make a decision on the matter himself, it is quite possible that he might take a different stand. They claim that Argentina has no external debt. According to their figures, this is the case. But they choose to ignore the fact that Argentina owes probably in excess of 300,000,000 dollars to United States banks for letters of credit and other advances. Argentina’s dollar shortage is really acute. They are finding difficulty in meeting their current requirements for even the most pressing necessities, such as petroleum. In spite of this, there is no attempt at rationing and so far they have managed to maintain a fairly constant supply.
Upon Maroglio’s return from the United States, rumors immediately began to circulate that he had been fired. He had his private secretary send out Christmas cards saying that he was absent from the city “taking a rest.” His position appears to be precarious, if not hopeless. [Page 474] Miranda appears to have the ring to himself for the moment.3 He frequently talks about going to England but is probably afraid to leave the country as his “pals” might “cut his throat” while he was away. He has privately admitted such fears. Miranda told an officer of the Embassy several months ago that he would fulfill Argentina’s side of the Andes Agreement4 by December 1, 1948, and then make England pay for Argentine food in dollars. Now, it appears that Argentina is either unable or unwilling to ship the amount of meat called for under the Agreement by the end of March, 1949. So far as can be seen, Miranda is making no effort to increase exports to the United States. This Embassy and others, especially the packing houses, have made constructive suggestions and have clearly demonstrated how exports of a number of products to the United States could be increased. The suggestions have been listened to with apparent interest, but no action has been taken.
Miranda, Perón and several others in the present administration have based their entire policy on the assumption that war between the United States and Russia was inevitable. Argentina would side with the United States and dollars would be forthcoming for Argentine products at fancy prices. Failure of this catastrophe to take place has thrown their plans out of kilter. Miranda and Perón are anxious to buy machinery and equipment from the United States for their industrial program. England, France, and other countries owe large amounts to Argentina but their currencies cannot be converted into dollars and they are unable to supply the manufactured products desired by Argentina. It must be said to Argentina’s credit that while we were preparing to put the Marshall Plan into motion, it shipped enormous quantities of foodstuffs to European and other countries without receiving payment.
Bramuglia5 added greatly to his own prestige and to that of Argentina by his statesman-like actions at the recent United Nations meeting in Paris. Obviously under orders from the Presidency, the local pro-Perón press carefully refrained from any mention of [Page 475] Bramuglia, to the point of appearing childish. No sooner had Bramuglia returned to Argentina from the United States than Evita6 demanded his head. Bramuglia’s success at Paris and his visit to Washington was clearly too much for Evita to swallow without protest. It is reliably reported that Perón and others prevailed on her not to demand Bramuglia’s resignation and she agreed to let it go for three or four months. Bramuglia runs the Foreign Office without her help and it is generally thought that he opposed her trip to Europe in 1947, and at least failed to help in plans for getting [her?] invited to Washington. Bramuglia is head and shoulders above anyone else in the present administration and he is the only one who has anything like a reasonable outlook on foreign affairs. He has the respect of most Argentines and his departure from the Cabinet probably would place the administration in real danger of being overthrown. While the military elements are not known to be strong partisans of Bramuglia, they hate Miranda and Maroglio and look upon Bramuglia as the one honest and outstanding member of the Cabinet. Bramuglia is the only Cabinet member who can be said to enjoy widespread esteem. In view of Evita’s attitude, it seems that his future path is likely to be strewn with hurdles.
What Can We Do?
In the face of this pessimistic picture, is there anything we can do?
We can hardly force a loan on Argentina. We cannot make sufficient dollar purchases to cure the present acute exchange shortage. United States firms cannot be expected to invest heavily in Argentina at a time when the local government appears to be making efforts to discourage foreign investments.
During recent years our policy towards Argentina has undergone so many changes—some of them in the form of a violent about-face—that it has been impossible for the wisest of our own people, much less for Argentines, to know just where we stood.
We might try to define our policy clearly to Perón and suggest our platform to him as a basis for an understanding. The following points as a statement of our policy may be worth consideration:
- 1.
- We believe in extending equal treatment to all American republics and expect to follow this policy.
- 2.
- Restate (ad nauseum) the principle of nonintervention in the affairs of other countries.
- 3.
- E.C.A. would authorize European countries to make purchases in the next few weeks of at least $100,000,000 in dollars and undertake to make further substantial purchases in the near future.
- 4.
- The United States is disposed to aid in the development of the resources and the industrialization of the other American republics [Page 476] on a sound economic basis. The extension of reasonable credits, the lending of technical assistance, and cooperation between all the countries will be necessary for the full development of the Americas.
- 5.
- Credits by the Export-Import Bank for the purchase of machinery and equipment on a sound basis can be encouraged.
- 6.
- Each American country must give in its Constitution and laws adequate protection for foreign investments. This means freedom from threats of confiscation and fair and equal access to the legal remedies provided by law. Foreign capital has no right to more favorable treatment than that extended to local capital.
- 7.
- Development of the American republics has been retarded by unstable political conditions, the lack of transportation and communications, lack of sufficient technical help, shortages of power, and many other factors which contribute to a higher standard of living for which each country is striving.
- 8.
- Many of the smaller countries do not possess the resources and other elements necessary for a higher standard of living and prosperity. Consideration should be given to the creation of customs unions or federations which would constitute a group with sufficient resources to make real prosperity a possibility. This point would require much thought and study.
- 9.
- The United States would be disposed, through the Eximbank and by other means, to assist in the building of highways and otherwise improving transportation and communication between the various countries.
- 10.
- The United States believes in freedom of speech, freedom of the press and radio, and freedom of trade and commerce, and is convinced that real peace and prosperity in the Americas cannot be achieved until these ends are reached.
- 11.
- With specific reference to Argentina, the United States is prepared to begin a study with Argentina of the means of increasing exports from this country to the United States and thus help to alleviate the present acute dollar shortage. The help of American business in Buenos Aires and the United States can be obtained for this purpose.
- 12.
- Argentina should give the United States assurance that remittances can be made when dollars become available and that American business here will be given fair treatment.
- 13.
- A careful study of the possibility of increasing tourist travel from the United States and the carrying out of constructive ideas should contribute substantially to the flow of dollars to this country.
- 14.
- Argentina, the United States, and the other countries should pledge themselves not to try to influence internal political developments in other countries and to use all their influence to encourage constitutional governments and orderly changes in administration through well recognized democratic methods.
No doubt other points could be elaborated, but it should be clear to all of us that it is necessary to clarify our policy towards the other American nations and especially as regards Argentina. Lack of agreement between the United States and Argentina has been responsible to a greater degree than any other single factor for our failure during [Page 477] recent years to make the fullest possible progress in the development of the inter-American system. Peace and prosperity in this hemisphere are just as vital to each and every nation as they are to the United States.
Our policy towards Argentina has not been clear. If this Embassy could be given authority to speak clearly and frankly to Perón and make him understand our position, a great step could be taken towards placing our relations with Argentina on a permanent and sound basis. Perón understands that he needs the help and cooperation of the United States and if we can offer them to him in a manner which Argentina can find acceptable, we could possibly write our own ticket, especially in view of Argentina’s present precarious financial and economic situation and its real need for help and cooperation from the United States.
Anything we undertake along this line will be fraught with certain hazards, including opposition from other American countries, but we should realize that we can never have real solidarity in this part of the world until we reach a general understanding with Argentina founded on a policy of enlightened self-interest. Such a task will be extremely difficult, but it is worth undertaking. We might review some of the accomplishments of a real application of the good neighbor policy, at times in the face of great difficulties. For a time, our relations with Mexico were fully as complicated and difficult as they have ever been with Argentina. A way was found to bring about a general improvement.
Santa Claus Doesn’t Live Here Any More
We probably do not even yet sufficiently realize the preponderant part we must play in leadership and that the role of the strongest and most prosperous nation in the world is generally not a popular one. We cannot hope to please all of twenty American republics and it is much more important for us to adopt a firm policy based on what we are convinced is best for us and for our neighbors. History will judge us on whether our policies are sound and wise and not on whether they pleased the governments of twenty other countries.
The other American countries do not always love us. When we hear expressions of gratitude, they are usually the voicing of the fervent hope of more favors to come. It is notorious that the “outs” always love us more than do the “ins”. We should clearly state the principle that indiscriminate loans are as a general rule good neither for the lender nor for the borrower. However, we are disposed to extend credits whenever possible for specific projects on a self-liquidating basis.
If we carry out a wise publicity program in Latin America, we can accomplish much to create better relations. A sound and sustained [Page 478] publicity campaign during the war and immediately afterwards in Mexico really did wonders in influencing opinion in favor of the United States and greatly facilitated Mexico’s task in cooperating with us. We should submerge them with propaganda in favor of democratic elections, freedom of speech and press, and removal of artificial restrictions on trade and commerce. We should emphasize that we are ready to help and without saying so make it clear that we are not prepared to play Santa Claus.
Respectfully yours,
Minister-Counselor
- Argentine President Juan D. Perón.↩
- Both Mr. Maroglio and Mr. Miranda resigned their positions later in January (telegram 68, January 19, from Buenos Aires and airgrams 38 and 39, January 21, from Buenos Aires; 835.002/1–1949, 835.002/1–2149, 711.35/1–2149; none printed).↩
- Reference is to the United Kingdom-Argentine Trade and Payments Agreement, February 12, 1948, which provided for payment by Argentina for purchase of the British-owned railways in Argentina, the disposition of Argentine monetary balances blocked in London during World War II, and purchase by the United Kingdom of Argentine meat and agricultural products in return for Argentine purchase of petroleum, coal, steel, and various chemical products. The text is printed in Br. Cmd. 7346, Argentina No. 1 (1948): Agreement on Trade and Payments Between the Government of the United Kingdom and the Government of the Argentine Republic. ↩
- Juan Atilio Bramuglia, Argentine Minister for Foreign Affairs and Worship.↩
- Eva Perón, wife of President Perón.↩