The Ambassador in Argentina (Bliss) to the Secretary of State

No. 1950

Sir: Referring to my despatch No. 1940 of January 19, I have the honor to enclose herewith42 (as translated in The Standard) the authorization [Page 779] granted by the Legislature of the Province of Buenos Aires for the suspension of the payment of the sinking fund and the proposed partial suspension of services on the Provincial public debt.

Legal recognition is thus given to the proposal of Minister of Finance Indalecio Gómez, which has been reported by me to the Department in previous despatches.

That European creditors consider themselves fortunate in receiving any payment at all from the Province of Buenos Aires may be deduced from the following statement published in The Review of the River Plate:

“Judging from what has appeared in the London and Paris papers, there is a general feeling among European creditors that the moratorium of the Province was unavoidable, and that, all things considered, the terms might have been worse.”

The same issue of that review (January 27, 1933) summarizes an article on this subject from the London Morning Post of December 30, 1932 (which may have been brought to the Department’s attention) in which it was pointed out that the temporary suspension of the sinking fund should set free considerable amounts in exchange which will be available for trade purposes and “that fact, in its turn, should minister to greater trade facilities, while, incidentally, the easing of the exchange position through the suspension of the Sinking Fund increases the market of security for the remittance of interest on the debt.”

In some quarters it [is] questioned whether this arrangement of the Provincial public debt may not prove a forerunner to acceptance by the National Congress of some similar adjustment covering the external debt of the nation.

Respectfully yours,

Robert Woods Bliss
  1. Enclosure not printed.