File No. 611.3531/59

The Secretary of State to the Argentine Ambassador ( Naón)

The Secretary of State has the honor to refer to the note verbale of the Argentine Ambassador addressed to Mr. Phillips, dated July 29,1 in which a memorandum of the basis for the discussion of a proposed treaty, of which the Argentine Ambassador had spoken to Mr. Phillips on the morning of July 5, was enclosed, as well as a list of Argentine citizens who have been drawn into the military service of the United States and whose freedom has been especially asked.

In view of the informal nature of the communication from the Argentine Ambassador, it is assumed that he desires an informal discussion of the provisions contained in the memorandum.

The United States Government receives with pleasure suggestions tending toward a closer commercial union between the Argentine and the United States. It cannot see its way clear, however, to enter into negotiations for a treaty of the proposed nature with a neutral country at this time, but feels that it may be possible for arrangements to be made through the War Trade Board and other Government agencies which may accomplish, in the main, the results contemplated by the plan suggested. Arrangements of a somewhat similar nature have already been made by the United States Government with the Governments of Spain, Switzerland, Norway, Denmark and Sweden, and the United States Government would be very glad indeed to facilitate such arrangements with the Government of Argentine.

In the memorandum accompanying the Argentine Ambassador’s note verbale of July 29, nine provisions are mentioned as the basis of an agreement.

The first provision reads as follows:

The Government of the United States of America will permit the exportation to the Argentine Republic during the period of this war of all the articles of its production which may be indispensable for the development of the Argentine national life or of her industries, and in quantities and amounts that would be possible to the United States within the exigencies imposed upon her by the war.

The War Trade Board will be glad to permit the exportation to the Argentine during the period of the war of those articles indispensable to the Argentine in those quantities that would be possible to the United States taking into account the needs of the United States and her cobelligerents and other obligations of the United States.

The second provision reads as follows: [Page 731]

In order to determine both the articles to be exported as well as the quantities and amounts within the exigencies 01 one of the parties and the possibilities of the other, the contracting Governments will endeavor to establish by common agreement, annually, and with the largest amplitude permitted by the circumstances, the list of such articles and the importance of such exportations.

The War Trade Board would be agreeable to carry on discussions for an arrangement in the sense of the suggestions contained in this provision.

The third provision reads as follows:

The Government of the United States will also facilitate a regular minimum service of cargo vessels representing forty thousand tons monthly to serve the needs of the commercial interchange between both countries while the war lasts, without prejudice to the service (interests) of private property that could be secured to stimulate the same source.

The Department of State understands that there have been variable amounts of American shipping engaged in commerce with the Argentine. It is probable, however, that much of this shipping will have to be withdrawn, for the United States Government intends by next spring to send at least three million men to France, and in order to transport these American armies and transport food and supplies which are necessary for them, it will be necessary for the Government of the United States to make use of every ton of shipping it can secure for that purpose. The question of shipping will be further discussed under provision number eight.

The fourth provision reads as follows:

The Government of Argentine also agrees not to allow the exportation from the Argentine ports of any one of the products that may have been shipped to Argentine from the United States, without a special agreement in each case between the two Governments.

The Department of State agrees to the advisability of some such provision in any arrangement that may be made as a corollary to provision number one.

The fifth provision reads as follows:

On its part, the Government of the Argentine Republic once satisfied that its own needs will be met, will facilitate the exportation to the United States of the national products that the needs of the American national life, her industries, or her present conveniences might demand (require), during the period of the war.

The Department of State receives with pleasure the suggestion that the Government of Argentine will facilitate the export to the United States of products essential to the national life of the [Page 732] United States and of her industries to the extent that such products can be spared by the Argentine.

The sixth provision reads as follows:

The quantities and amounts of such exportations will also be fixed annually by common agreement between the contracting Governments, within the greatest amplitude permitted by the vital exigencies of the population or the industries of either Government.

The appropriate departments of the Government of the United States would be glad to discuss this provision looking toward some satisfactory arrangement.

The seventh provision reads as follows:

The Argentine Government will contribute in the measure permitted of its own resources, to the financing required by the acquisition of such products.

Considerable importance is attached to this provision, as it would facilitate the purchase of large supplies of wool and other materials in the Argentine to the mutual benefit of the Argentine and the United States.

The eighth provision reads as follows:

The Argentine Government agrees also to devote to the service of the commercial interchange between the two countries all the shipping of which it can dispose at present, as well as that acquired during the period of the war, but on the clear understanding that this will be done after satisfying the needs of its coastwise trade.

As was pointed out in the discussion of the third provision, the United States will have to make use of every available ton of shipping for war purposes. Therefore, the lack of shipping would appear to be a great if not insuperable difficulty in meeting the suggestions of the Argentine Ambassador for an arrangement along the lines described above. Should the Argentine Government, however, see its way clear to make use of the large amount of German tonnage now in Argentine ports, for commerce between the Argentine and the United States, this difficulty would be completely overcome. Under the commercial arrangements with Norway, Sweden, Denmark and Spain above alluded to, these countries, despite many difficulties, have provided the shipping wherewith to lift imports from the United States. They have thus not only made possible the actual transportation of goods from the United States, but in so doing have given unmistakable evidence of their real need for the goods in question.

The ninth provision reads as follows:

The Argentine Republic will cooperate toward the regularization of the present situation of the international exchange between the [Page 733] Argentine and the American markets, in order to stabilize it in such form that the maintenance of the regular situation of the rate of exchange can be achieved for the entire period of the war.

The Treasury Department receives the suggestion in this provision cordially, as it believes that the maintenance of the usual rate of exchange between the United States and the Argentine will be of great benefit to both countries.

  1. Not printed.