215. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Holland) to the Secretary of State1
SUBJECT
- Economic Assistance to Argentina
An Argentine negotiating mission is well advanced in conferences seeking U.S. financing for government’s economic program. President Aramburu will surely raise the question with us in Panama. It is not necessary that we have a specific answer, but it is very important that we know by then whether U.S. will at the conclusion of the conferences offer some financing to Argentina or not.
At this moment the Export-Import Bank is pessimistic regarding Argentina’s capacity to sustain additional dollar loans. Sam Waugh has conferred with Gene Black who says IBRD is reluctant to consider foreign currency loans because (1) it believes that Argentina is not yet a good credit risk, (2) it has reservations as to provisional government’s legal capacity to pledge Argentine credit and (3) it would insist on sending its own study mission to Argentina before considering any loans there.
As contemplated in my briefing paper to you of July 11, 1956, entitled “Importance of Present United States Relations with Argentina, Brazil and Chile”, it appears that we must decide whether political factors justify the U.S. in more generous credit policies than strictly banking considerations would justify. In my own judgment [Page 421] they do, provided that Argentina gives us certain reasonable and politically practical assurances regarding treatment to be accorded private enterprise, and U.S. interests in particular.
This problem is complicated further by the probability that, by the time we go to Panama, the Export-Import Bank will have decided to extend to Brazil substantial developmental credits amounting to several hundreds of millions of dollars.
It is most urgent, I feel, that on Monday or Tuesday, July 16 or 17, you meet with Secretary Humphrey, Sam Waugh and appropriate Department officers to determine the general attitude which you and President Eisenhower will take on this subject in discussions with President Aramburu in Panama.
Recommendation:
That you arrange such a conference.2