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

220. Memorandum From the Deputy Assistant Secretary of State for Inter-American Affairs (Rubottom) to the Secretary of State¹

Washington, August 9, 1956.

SUBJECT

• Argentine Economic Negotiations

The crucial moment has arrived in our economic negotiations here with Argentina. The Argentine Mission spent nearly two weeks in New York and were told by private banks that no loans of consequence would be forthcoming until the World Bank and Export-Import Bank positions had been made known. The Mission has met separately with the World Bank and the Export-Import Bank for the past two days and it appears that the two banks might be willing to consult on the question of loans to Argentina, although the World Bank has refused to join in a three-way meeting.

The World Bank’s position is categorical that it will have to send a survey mission to Argentina and that it may be six months to a year before any firm decision on a loan program can be reached. Meanwhile, the Argentine Mission is gravely preoccupied with its urgent needs, as for railroad equipment, and says that such a delay would have disastrous economic and political consequences in Argentina.

Our hope now is that the Export-Import Bank may be able to provide interim financing for Argentina’s more pressing requirements under something like the “package program” which was suggested by you while you were in Lima. There is reason to believe the World Bank would not object to this interim program by the Export-Import Bank provided the Argentines act sensibly and do not attempt to borrow too much against their limited capacity to repay, especially in the dollar area.

Yesterday the head of the Argentine Mission, Dr. Coll Benegas, told me that he was going to return to Buenos Aires this week-end to report to his government and he seemed gravely preoccupied. Today he called to reveal that he was delaying his departure until some later date. This seems to be a favorable sign.

Recommendation:

That at an early opportunity you tell Secretary Humphrey that you believe a “package program” for Argentina, including interim financing by the Export-Import Bank, pending completion of a World Bank survey, is in the United States interest in order to maintain the momentum of our improved relations with Argentina on both the economic and political planes.²

1. Source: Department of State, ARA Files: Lot 59 D 509, Argentine Financial Mission. Secret.

2. Dulles called Humphrey at 9:19 a.m., August 10, just prior to a meeting between Humphrey and officials of the Export-Import Bank. According to a memorandum of that telephone conversation, prepared in the office of the Secretary of State, their conversation went as follows:

   “The Sec. said he would only ask for 50 million for Argentina. He thinks there have been pretty good talks. He thinks the EXIM Bank is prepared to make an interim advance for railroad equipment. The Sec. does not think from the political standpoint the situation will stand deferring everything for 6–8 mos. and he hopes H. will feel disposed to go along with the proposal of EXIM Bank. H. said they are coming in in a few minutes.” (Eisenhower Library, Dulles Papers, General Telephone Conversations) No record of Humphrey’s meeting with Export-Import Bank representatives has been found in Department of State files.