835.5151/153

Memorandum by Mr. Willard L. Beaulac, of the Division of Latin American Affairs

I called Mr. Corliss of the Department of Commerce on the telephone and asked him to give me the details with respect to a report [Page 757]in the New York Times of September 3, 1933, to the effect that the American Manufacturers Export Association, with the cooperation of the United States Department of Commerce, had arranged with the Argentine Exchange Control Commission for the release of some $12,000,000 to $15,000,000 now tied up in Argentina by exchange restrictions.

He said that the American Manufacturers Export Association had communicated directly with the Commercial Attaché in Buenos Aires to the effect that the Pan American Petroleum Company had expressed a willingness to invest a considerable amount of money in oil stations in Argentina provided the Exchange Control Commission would consent to its making arrangements to obtain the funds out of blocked dollar exchange in Argentina by arrangement with the owner or owners of that exchange.

The Commercial Attaché34 took the matter up with the Exchange Control Commission which was disposed to agree to the request provided that the Commercial Attaché virtually guaranteed that the funds so obtained would be used legally and not in contravention of the exchange control regulations or of the permission specifically granted.

The Commercial Attaché naturally declined to assume this responsibility and suggested to the American Manufacturers Export Association and to the Exchange Control Commission that an individual or bank be appointed as agent of the Association. The Association also suggested to the Exchange Control Commission that authority be granted for the use of funds as requested in the case of the Pan American Petroleum Company, that a record be kept of each transaction and that at the end of a given period when the transactions were examined, those not ratified be redeposited.

Meanwhile the Association, thinking that the Commercial Attaché had made final arrangements, transmitted a request on the part of the Pan American Petroleum Company for the release of blocked funds. The Exchange Control Commission approved the request and apparently the funds were actually released. A second request was thereupon transmitted by the Association in the case of a dealer in furs. The Commercial Attaché objected in this case and requested full information before taking the matter up with the Exchange Control Commission. Meanwhile he had sent the Department of Commerce all the correspondence on the subject and that Department had agreed that (1) the Commercial Attaché should not be expected to go into the details of each transaction, and (2) he would have no responsibility in the case of any transaction. The Association thereupon [Page 758]appointed the National City Bank as its attorney before the Exchange Control Commission.

I asked Mr. Corliss whether he thought any large amounts of blocked funds could possibly be released under this system since the plan embodies the investment of new capital in Argentina. He said he had no idea that any large amount of blocked funds could possibly be released.

He stated that Mr. Georges St. Jean, the Economist of the Association, who handled the details of the present plan, was in the Department of Commerce yesterday when I telephoned him.

  1. Alexander V. Dye.