103–XMB/4–2850
Memorandum of Conversation, by Mr. Jack C. Corbett of the Office of Financial and Development Policy
Subject: Possible Credit to Argentina.
| Participants: | For the Export-Import Bank: Mr. Herbert Gaston |
| Mr. Clarence Gauss | |
| Mr. Lynn Stambaugh1 | |
| Mr. Walter Sauer | |
| Members of the Staff | |
| For the Department: Ambassador Griffis2 | |
| Assistant Secretary Miller | |
| Mr. Ivan White—ARA | |
| Mr. Jack C. Corbett—OFD |
After a few preliminary remarks, Mr. Gaston called on Mr. Rifat Tirana of the Bank’s staff to outline the proposal which the Bank had prepared with respect to the Argentine credit. This plan involved a credit by the Export-Import Bank to Argentina of $65 million to [Page 712] be devoted to clearing up about two-thirds of the commercial arrearages. The plan also envisaged Argentina’s simultaneous action on other types of arrearages. (Copy of the proposal is attached.3)
Ambassador Griffis and Assistant Secretary Miller expressed some disappointment with the size and purpose of the credit. They indicated to Mr. Gaston that they felt that it was important to make some provision for future shipment of agricultural equipment. They felt that it would be most unsatisfactory politically only to take care of the commercial arrearages. Ambassador Griffis outlined the factors which lead to the present Argentine tightness of dollars and pointed out the credit record of Argentina. Mr. Gaston questioned the advisability of expanding Argentine agricultural production in as much as most of this production would probably go to European countries and would have little to do with improving Argentina’s dollar position. Ambassador Griffis responded that Argentina had relied upon future convertibility of sterling, basing this reliance, in part at least, upon the policies and statements of the U.S. Government in this respect. Mr. Gaston summarized his views as to the reasons for present Argentine difficulties by stating that its economic policies had been extravagant and short-sighted. Further statements were made by the State Department representatives as to the extreme political necessity of favorable Export-Import Bank action on both arrearages and agricultural equipment credits in view of the many specific actions which Argentina has taken in recent months to eliminate troublesome points in their relations with the U.S. Government and with the U.S. business community. Mr. Gaston felt that from a banking point of view, the important thinking to be done was to regularize the liquidation of these arrearages and reestablish Argentine credit in the U.S. He felt this had priority over providing credit for further shipments of goods. Mr. Gaston, however, finally admitted that political situations had to be taken into account and that the Bank would have another look at the matter.
Mr. Miller made the point that time was of the essence as Dr. Cereijo would leave for Argentina on May 6. Therefore, if some exchange of letters between Mr. Gaston and Dr. Cereijo could be arranged it would be very helpful. Mr. Gaston said many problems presented themselves but he would look into the matter when further steps were taken on the nature of the credit itself. Mr. Miller suggested that a letter from Judge Kee4 to the Department and a reply thereto on the subject of our relations with Argentina might be helpful in [Page 713] the public presentation of this matter. Mr. Gaston proceeded to make a number of sharp comments on the effect of such letters on Export-Import Bank operations.
- Messrs. Gauss and Stambaugh were both members of the Board of Directors, Export-Import Bank.↩
- Ambassador Griffis had arrived in Washington, April 27.↩
- Not printed.↩
- John Kee, Representative from West Virginia, Chairman of the House Committee on Foreign Affairs, and member of the Joint Committee on Foreign Economic Cooperation.↩