835.5151/134
The Chargé in Argentina (White) to the Acting Secretary of State
[Received June 26.]
Sir: Referring to my despatch No. 2100 of June 9, I have the honor to enclose herewith the text of the note from the Foreign Office17 to the effect that the Ministry of Finance had decided to abrogate the circular of the 31st of May, which was published in the newspapers and forwarded, in translation from The Buenos Aires Herald of June 9, to the Department in that despatch.
The Department’s telegram No. 34 of June 9, 2 p.m., having authorized me to communicate to the Minister for Foreign Affairs an aide-mémoire setting forth the Department’s view as to the exchange provisions of the Roca agreement, I duly presented it to Dr. Saavedra Lamas at the first opportunity and enclose herewith copies thereof.18 In its number 37 of June 13, 7 p.m., the Department described Dr. Espil’s representations under instructions from his Government. The last part of the telegram appeared to intimate that I should proceed to discuss the exchange problem with Dr. Hueyo, the Minister of Finance. In this connection, the situation appears to be as follows:
It may be considered as definitely the policy of the Argentine Government that the foreign exchange for purchases to be made by Argentina should be distributed by countries according to their respective purchases of Argentine goods, which is a variation of the old slogan, “Buy from those who buy from us.” While there are no lack of arguments against this policy, it is one which can be applied without apparent discrimination to all countries. If I were to attempt to argue its unsoundness with the Minister of Finance—as others have tried to do but without avail, as he is a firm believer in its efficacy—he could well refer me back to the Minister for Foreign Affairs. It does not seem to me, therefore, that I shall make any progress at the present conjuncture by making an appeal to Dr. Hueyo on this broad basis.
[Page 745]Possibly, however, something might be obtained by going to him on some particular case. I have accordingly interviewed representatives of both the American banks in this connection. Both agreed with me that there was nothing to be gained by attacking the exchange provisions of the Roca agreement. I told him, however, that should any point arise in which they considered that my intervention with Dr. Hueyo might offer possibilities of achieving anything useful, they should at once inform me, which they said they would do.
The Minister of Finance has acted with commendable promptness and in an entirely satisfactory manner in regard to the circular of May 31 which has now been rescinded, as foreshadowed in my telegram No. 53 of June 8, 12 noon. The Commercial Attaché tells me that he telegraphed his Department at a later date that this circular had actually been rescinded.
Dr. Hueyo has further invited an Argentine representative of the First National Bank of Boston, Señor Lanusse, to form part of the Exchange Control Commission, and the latter has said that he would accept. So far no definite decree has appeared on the subject. Moreover, I am informed that some ten foreign Banks, exclusive of the American ones, are considering a demand to the Minister of Finance that the only representative of a foreign Bank at present a member of the Commission should be removed therefrom.…
Again, on the basis of this Government’s theory of exchange distribution, American interests have this year not fared so badly. From one of the American Banks, I received the following figures for the first four months of the present year, which it was stated has been obtained from a member of the Exchange Control Commission: Of the total of Argentine exports for the period in question, the United States has purchased 3½ per cent., whereas in exchange, after deduction for payments on the public debt, the United States has received almost 16 per cent.
It does not, therefore, seem to me that I can do any good at present by arguing with Dr. Hueyo about the Roca agreement, which has not yet gone into effect. I will, however, watch the situation closely and should any opportunity present itself, will see what I can do.
Mr. Fraser, the British delegate to negotiate in regard to the tariff clauses of the Roca agreement, has arrived and will next week proceed to business with the Argentine authorities. A brief statement in regard to him in The Buenos Aires Herald of June 11 [10?] is enclosed herewith.19
As regards the general policy of the Government in connection with exchange control, I enclose herewith excerpts from an editorial from La Prensa of June 7.19 This paper, it will be recalled, is [Page 746] free trade in its policy but considers that in view of the manner in which Argentine exports have been treated abroad, the exchange restrictions are justified—a view which would find wide acceptance here.
Respectfully yours,