Memorandum by the Chief of the Division of Latin American Affairs (Wilson)

Conversation: General Palmer E. Pierce
Mr. E. P. Thomas
Mr. James S. Carson35
Mr. Edwin C. Wilson.

The above-mentioned gentlemen, who had an appointment with the Secretary to discuss the matter of commercial treaties, stopped in to give me information regarding their efforts on behalf of the Council on Inter-American Relations and the National Foreign Trade Council to work out an arrangement with Argentina for the release of frozen American credits in that country.

They said that a meeting had just been held in New York at which 18 American firms doing business in Argentina were represented, and these firms had authorized Messrs. Pierce, Thomas and Carson to act as a committee on their behalf to enter into an arrangement with the Argentine Government.

General Pierce said that the amount involved in frozen pesos held by these firms was approximately $24,000,000; of this amount he estimated approximately $3,500,000 represented interest earned on invested capital, the balance representing frozen commercial credits. He said that as a result of the experience of the committee with the Brazilian agreement, it was expected that not over one-half of the total amount above mentioned would be presented for conversion in case an agreement should be reached.

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Mr. Carson said that he felt that American companies doing business in Argentina were not so much concerned over getting their frozen pesos, representing past business, out of Argentina, as they were over the matter of assurances as to exchange for current business. He said that his information indicated that Argentina intended shortly to tie the peso to the British pound, instead of the gold franc as at present, which would mean a depreciation of 20% in the value of the peso. This, of course, would make an added difficulty in the way of obtaining adequate exchange.

General Pierce said that one plan now under discussion was that the pesos now held by the American firms would be loaned to the Argentine Government as a road construction fund, the Government issuing bonds to be retired over a period of from five to ten years with a special arrangement guarantying exchange for the service of these bonds. I gathered, however, that this plan was still very vague.… General Pierce said that this committee of three had also discussed the Colombian exchange situation with the Colombian Consul General, Mr. Olano in New York, and at his request had furnished him with a memorandum in the matter. Olano said that he would transmit the memorandum to his Government and let the committee know his Government’s views.

  1. Of the Council of Inter-American Relations; Vice President, American and Foreign Power Co.