File No. 611.3231/215.

The American Chargé d’Affaires at Buenos Aires to the Secretary of State.

No. 941.]

Sir: Referring to previous dispatches from this legation regarding the matter of preferential tariff treatment of American flour in Brazil, I have the honor to report that on the 26th instant the Argentine minister for foreign affairs, Dr. Ernesto Bosch, having been requested by the chamber of deputies to inform that body of the steps taken by the Government to guard the interests of Argentine millers in Brazil, made a detailed statement in the matter to the Chamber of Deputies, the text of which I inclose herewith, together with a translation in full.1 There is also inclosed the remarks made by Deputy M. Carles following the minister’s statement, with a translation of the pertinent parts thereof.1

The communication from the Department of State to Minister Naón, quoted by Dr. Bosch, was received by the chamber with marked signs of approval as was the minister’s statement. Contrary to general expectation and to what Señor Carles had himself counseled on previous occasions (see my No. 854 of Mar. 15, 1911), that gentleman introduced a bill which, instead of providing that the Executive Power be authorized to augment duties on certain articles imported from the United States, authorized the Executive to suppress or lower them on American petroleum, lumber, and machinery whenever reciprocal agreement be made. As reported to the Department in my telegram of yesterday, this bill immediately passed the chamber of deputies.

Yesterday morning Dr. Zeballos called upon me at the legation to secure the text of our present tariff law. He told me that Senor Carles’s change of attitude in the flour question was due entirely to the insistance of His Excellency the President and of Dr. Bosch that no bill detrimental to the United States interests in Argentina should be introduced in Congress. I called Dr. Zeballos’s attention to the importance of the United States Government’s declaration that it would not seek further favors from Brazil without previous notification to his Government and I emphasized the fact that this declaration was but another demonstration of my Government’s friendly feelings for the Argentine people. I also drew his attention to section 2 of the tariff law respecting the maximum and minimum tariff of the United States, pointing out that far from being a menace to international commercial interests it was merely a protection measure [Page 34] to enable the United States Government to guard against discriminations unfavorable to its products.

Dr. Bosch’s response to this interpellation has been well received, while the Departments note to the Argentine minister at Washington has changed the feeling of apprehension heretofore existing in Government and commercial circles that the United States would compel Brazil to grant American flour further preference over that already accorded. As soon as this apprehension was removed by the department’s memorandum to Dr. Naón, the desire to legislate against American imports disappeared. This would appear to bear out my report in the said No. 854 that no adverse legislation would be passed if it were made apparent that we would not seek further lowering of the Brazilian tariff on American flour. I am of the opinion that as soon as Dr. Carles learned of our Government’s friendly statement he realized that he would not have the support of the Chamber of Deputies on a bill to increase duties on our products. He therefore introduced a bill in the contrary sense (a translation of which was telegraphed to the department on the 27th instant1) which immediately passed the lower house.

I must also report in this connection that several foreign ministers called on the Minister for Foreign Affairs this morning to remonstrate against the provisions of the proposed law as being contrary to their treaty agreements (of the most favored nation) with Argentina. With the exception of the British, it has not been possible to ascertain which of the foreign diplomats made representations to the minister, but I am inclined to believe that it was those of Germany, France, and Italy. The British chargé d’affaires tells me that the minister replied to him that the bill had not yet become law and that moreover it was only a facultative authority given the Executive Power to be exercised in case reciprocity agreements were entered into. He further said to me that it was the theory of the United States Government that benefits granted one nation by reciprocity agreements could not be claimed by a third under the most favored nation clause, and that, although his Government has accepted that theory from us he doubted whether they would do so from Argentina.

I have, etc.,

Robert Woods Bliss.
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