Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

187. Memorandum of a Conversation, Department of State, Washington, June 27, 1955¹

Washington, June 27, 1955

SUBJECT

• 1. Argentine Revolt
• 2. Various Aspects of US-Argentine Relations

PARTICIPANTS

• Argentine Ambassador Hipólito J. Paz
• Assistant Secretary Holland
• OSA—James F. O’Connor, Jr.

Mr. Holland expressed condolences to Ambassador Paz on the recent death of his father. The Ambassador said that he had considered it inexpedient to return to Buenos Aires immediately because of the inexperience of his Minister Counselor (Dr. Galvez) in present circumstances.

Ambassador Paz mentioned to Mr. Holland that this morning’s Wall Street Journal had carried an article on US-Argentine relations by a reporter named Philip Geyelin [headed “Argentine Crisis: US Officials Favor Peron—But Largely for Business Reasons,”]² which he considered realistic and constructive and a summary of which he intended to cable to Buenos Aires. The Ambassador went on to say that he had engaged in an exchange of views with Mr. Geyelin over a long period of time, and implied that he had been responsible in some measure for the viewpoint of this particular story. Mr. Holland agreed that it was a useful article.

Ambassador Paz expressed generalized optimism on the course which events were taking in Argentina following the revolt. He mentioned specifically that such individuals as General Lucero³ and Admiral Cornes,⁴ both of whom he knew [and both of whom have served as Attachés in the US], have an appreciation of the importance to Argentina of relations with the US.

The Ambassador then turned to the Argentine Church–State issue in referring to the fact that Cardinal Spellman⁵ was scheduled to deliver a speech on July 3, and in expressing concern that it might refer to the Argentine situation. Paz said that he knew the Cardinal personally and was considering approaching him on this subject, but had reservations as to what the press might make of it. He went on to say that he thought the situation was one in which any action would be better than none, and that he was consequently considering approaching the Vatican’s Apostolic Delegate in Washington⁶ to try to arrange a meeting with Cardinal Spellman. Mr. Holland agreed that a discussion with the Cardinal might prove useful, and suggested that an unpublicized meeting with the Cardinal away from the latter’s office in New York might be indicated. Mr. Holland then went on to explain that the hands of the US Government were tied as regards any approach of this sort, since it would be inconsistent with our publicly stated policy of nonintervention in the Argentine situation for the State Department to approach Church officials on this same issue. The Ambassador indicated his appreciation of this fact.

Mr. Holland next told the Ambassador that he wanted to take advantage of his call to discuss several matters with him. He turned first to the subject of the press leaks on his appearance last week before the Latin American Subcommittee of the House Foreign Affairs Committee.⁷ Mr. Holland explained that this had been a command performance to explain US policy toward Argentina in the light of recent developments and that he had had to postpone his travel to San Francisco to comply. He said that he had told the members of the Subcommittee in executive session that Argentina played a major role in the Hemisphere, that an earlier and different US policy toward that country had not been productive and that we were currently pursuing a constructive policy of friendliness and cooperation, and that, as regards the revolt, the Department still did not have enough information on which to base firm conclusions as to Peron’s status. There were members of Congress present, however—continued Mr. Holland—with an interest in giving currency to what their Catholic constituents wanted to hear, and this accounted for the subsequent leaks to the effect that the State Department believed that Peron was on the way out. Ambassador Paz said that he understood the situation and was going to transmit appropriate comments to Buenos Aires.

Mr. Holland next referred to Argentine-Uruguayan relations. He said that he thought the Uruguayan Government had behaved with commendable tact and restraint in the aftermath of the revolt and that he had expressed the hope to Uruguayan Ambassador Mora that the latter’s Government could continue to do so. Mr. Holland then told the Ambassador that it was likewise our hope that the Argentine Government would find it possible to avoid taking any steps growing out of recent developments which might complicate Argentine-Uruguayan relations from the other side, since the US viewed the improvement in those relations with satisfaction and hoped that it could continue. Ambassador Paz stated his agreement with Mr. Holland’s viewpoint.

The Assistant Secretary discussed as his final topic the subject of blocked profit remittances for US business interests in Argentina. Mr Holland described for the Ambassador the meeting which Ambassador Nufer had had with Peron and Gomez Morales on the morning of June 16, during which Peron had reconfirmed his commitment to permit profit remittances but Gomez Morales had insisted that these could not be begun until calendar 1956, when they would be authorized in two semi-annual increments.⁸ Mr. Holland told the Ambassador that this proposed delay seemed to represent a departure from the Argentine commitment and posed problems for the US Government in dealing with the whole complex of US-Argentine economic relations. He pointed out that the US appreciates their dollar position and does not expect more than limited progress at this time, but that some tangible step in the immediate future was essential to enable the US Government to withstand US business pressure on this issue, and that waiting to spread remittances through 1956 was not satisfactory. Mr. O’Connor interrupted to report that, according to the latest information, the representative of Gomez Morales who was to discuss the terms of a letter of commitment on this subject had since been talking in terms of an 18 months’ remittances spread, rather than the 12 months stated by Gomez Morales. In reply to a question by Mr. Holland, Mr. O’Connor confirmed that the Argentine arrangements with the UK provided for sterling remittances through a period begining early this year and ending June 30, 1956, during which period the British would prospectively have remitted the sterling equivalent of $5.3 million.

Ambassador Paz received Mr. Holland’s remarks sympathetically, and said that he would write to Peron on this subject.⁹

1. Source: Department of State, Central Files, 735.00/6–2755. Limited Official Use. Drafted by O’Connor.
2. These and following brackets are in the source text.
3. General Franklin Lucero, Argentine Army Minister.
4. Admiral Luis J. Cornes, Argentine Navy Minister
5. Francis Cardinal Spellman, Archbishop of New York.
6. Archbishop Amleto Cicognani.
7. Holland appeared before the Latin American Subcommittee of the House Foreign Affairs Committee on June 21. A statement entitled, “Notes for Statement to House Committee,” drafted by Holland on June 20, is in Department of State, Holland Files: Lot 57 D 295, Argentina. Circular telegram 732, June 21, sent to all American diplomatic missions, summarized Holland’s testimony. (Ibid., Central Files, 611.35/6–2155)
8. Ambassador Nufer reported this conversation to the Department of State in telegram 804 from Buenos Aires, June 23. (Ibid., 811.05135/6–2355)

9. Telegram 919 to Buenos Aires, June 27, reads as follows:

   “Suggest in your discretion you inform Peron and Gomez Morales latter’s remittance proposal June 16 Embassy’s 804 not satisfactory and not considered fulfillment Peron’s promise. Stress US does not expect full immediate settlement but it is essential to Department in its efforts further US economic collaboration Argentina in face pressure US business interests for tangible action that Argentina should initiate some system for remission profits which would begin promptly and not place US in embarrassing disadvantageous position compared UK through postponement beginning dollar authorizations to 1956. This particularly true in view proportionately small dollar outlay involved even when exchange difficulties taken account. Holland took foregoing line with Paz in meeting this afternoon and Paz undertook write Peron. In your discretion you might mention that since Argentine uprising it is all the more necessary for Department have at least token Argentine Action.” (Ibid., 811.05135/6–2355)

   In telegram 840, June 29, Nufer responded in part as follows: “Gomez Morales and his associates obviously unhappy over enforced compliance Peron’s commitment. Scarpati told Hopkins and Weaver Argentina could not afford any profit remittances while its exchange position so precarious, but that ‘this is something Nufer has talked Peron into.’ Under circumstances, it would, I believe, be inadvisable for me to tell Peron or Gomez Morales that latter’s offer not fulfillment Peron’s promise. President would almost certainly react unfavorably, especially under present circumstances.” (Ibid., 811.05135/6–2955)

   John A. Hopkins was Counselor of the Embassy for Economic Affairs; Findley Weaver was the Financial Attaché.