835.34/421: Telegram

The Acting Secretary of State to the Chargé in Argentina ( Cable )

9. Bethlehem Steel Company states that further difficulties are being encountered in getting contracts for Argentine naval construction. It appears that contracts are to be awarded to Italy for cruisers, to England for fast destroyers and to France for submarines. It is stated that although the bids of the Bethlehem Steel Company were higher than those of foreign competitors the Argentine Government has hitherto always found this added expense justified by superior workmanship. If contracts were awarded to lowest bidder all would go to Italy whereas company considers that they are evidently to be divided for political reasons between Italy, England, and France. It seems to be the intention nevertheless to finance this construction in the United States. The Company points out that other countries have taken the position that when they make loans in similar circumstances their nationals must receive the contracts.

If you are satisfied that the foregoing information regarding the allocation of the construction in question is substantially correct, and that there has been in fact an unwarranted discrimination against American interests, particularly if margin by which British and French bids exceed Italian bid is comparable to margin by which American bid exceeds the Italian bid, you may express to the Minister for Foreign Affairs the hope of this Government that an equitable share will be accorded to American firms. You may add that if it is contemplated to arrange for the necessary financing in this market it would undoubtedly give rise to difficulties unless at least a fair share of the construction should be placed here. See the next to the last sentence of the Department’s cablegram 41, October 18, 1 p.m., and instruction 117 of January 25.8 In the event that all construction should go to Europe it would be a matter of keen regret to this Government.

  1. Instruction No. 117 not printed; this instruction enclosed the two memoranda of conversation with Mr. Hugh Knowlton, dated Jan. 7 and 14, pp. 427 and 428.