835.5151/306
The Assistant to the Chief of the Division of Latin American Affairs (Heath) to the Chief of the Division (Wilson)
Mr. Wilson: Yesterday we received five reports from the Commercial Attaché in Buenos Aires, all chiefly concerned with the exchange problem.
Summarized, they indicate:
1. That the serious situation of American interests, as regards the allotment of official exchange, has become worse: That, contrary to its announcement that exchange necessary for debt service would be [Page 519] deducted from all sources, the Argentine Government is apparently taking the exchange to service its American borrowings chiefly from Argentine exports to the United States, thereby reducing the amount of official exchange available for American exporters to Argentina. Practically all official exchange is understood to have gone to British, Belgian and Dutch exporters.
On the other hand, the Commercial Attaché reports that the amount of free exchange is apparently increasing and that American exporters are becoming reconciled to using the more expensive free market.
2. A possibly encouraging sign is that the Argentine Government is apparently giving consideration to the question of American blocked balances. The Minister of Finance is said to have offered 5 year 2% bonds at rates of 10% below official rates to certain American holders of peso balances but this offer was refused. The Ministry of Finance has sent a questionnaire to the banks to ascertain the total amounts of blocked accounts. Also the question is rumored to be about to have an airing in the Argentine parliament and Dye hopefully reports that there is considerable agitation amongst Argentine importers against restrictions on sale of dollar exchange.
Mr. Veatch11 is finishing his study of the Argentine exchange situation. I understand that his conclusion—in which I concur—is that to get concessions from Argentina in exchange matters we must be prepared to offer something in return. Possibly a reciprocal tariff agreement. The Commercial Attaché reports that Argentine pressure for a reciprocal tariff agreement is continuing.
- Roy Veatch, an assistant in the Office of the Economic Adviser.↩