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

237. Telegram From the Acting Secretary of State to the Embassy in Argentina¹

Washington, May 2, 1957—8:45 p.m.

1173. Department and Eximbank agree with Embassy’s estimate Embtel 1048² that time has come for Eximbank work out with Argentines implementation $44 million balance line of credit. Since IBRD considering complementing Eximbank credits in transportation, Argentines should be receptive proposed allocation $15 to $20 million of balance to private sector, excluding power, with remainder to transportation. Our readiness proceed usable as effective demonstration our desire help despite difficulties created by lack progress on Argentine commitments made during negotiation.

Department and Eximbank also agree not desirable, despite definition our own thinking, to spell out settlement US claims as condition for loans beyond $100 million credit. We will continue here as you are in Buenos Aires emphasizing difficulties created by lack progress on Argentine commitments and desirability of progress as best means attracting needed foreign capital.

We understand unrealistic expect immediate conclusive action on problems all companies. Without relaxing in efforts their solution believe progress on some cases with reasonable expectation solutions in sight would be considered satisfactory evidence Argentina complying with commitments. ANSEC emphasized because of retrogressions rather than greater importance other firms. Meatpackers’ problem appears offer best prospect results.

Any case, however, should be made clear that problems US investors aside, Bank will not make loans to government in electric power field since private capital apparently available.

Embassy comments foregoing desired. Eximbank also interested in Embassy’s views on timing and site discussions on implementation $44 million balance. Bank perceives difficulty discussions private sector loans Washington.³

Herter

1. Source: Department of State, Central Files, 835.00/4–1757. Confidential. Drafted by Rubottom, Bernbaum, and Vaky and approved by Rubottom.
2. Document 234.

3. In telegram 1105 from Buenos Aires, May 6, Ambassador Beaulac proposed that he promptly leave an aide-mémoire with the Argentine Foreign Minister, Alfonso de Laferrere, regarding U.S. interest in a solution to the ANSEC and meatpackers’ problems. (Department of State, Central Files, 611.35/5–657) In telegram 1106, May 6, Beaulac informed the Department as follows: “It is our present idea that after aide-mémoire transcribed in my telegram 1105, May 6, is delivered and in the absence of new developments which might make trip undesirable, Brand should come Buenos Aires for stated purpose of discussing allocation remainder $100 million credit.” (Ibid.)

   The Department approved his proposal, with certain minor modifications, in telegram 1201 to Buenos Aires, May 9. (Ibid.) On May 22, Beaulac delivered the aide-mémoire to de Laferrere; a copy was transmitted to the Department in despatch 1431 from Buenos Aires, May 22. (Ibid., 811.05135/5–2257)