835.51B861/78: Telegram

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

10. Department’s No. 5, January 13 and your mail despatch No. 1940, January 19. In view of the failure of your diligent effort to obtain a revision of the new debt plan of the Province of Buenos Aires in order to remove the discriminatory features you should, if you perceive no objection, inform the Foreign Office that you are instructed to express your Government’s regret and its disapproval of the discriminatory features of this program which it believes could have been avoided.

The plan as published in the American press states that the Province will make available for interest “an amount in paper pesos equal at [Page 780] par of exchange to the interest charge on the dollar bonds. Such pesos will be converted into dollars as and when exchange is available and remitted for application toward the payment of interest to bondholders assenting to the plan”. This means that the amount of actual cash in dollars that the American bondholders will receive will depend not only on the exchange quotation of paper pesos but on the rate at which the Exchange Commission permits dollars to be secured. You are requested to carefully watch the execution of this plan and report if the permitted conversion into dollars lags behind the conversion into sterling or other foreign currencies.