835.5151/415: Telegram

The Consul General at Buenos Aires ( Warren ) to the Secretary of State

Referring to reports entitled Argentine Financial Notes dated January 25, February 15 and March 22, 1935, the Argentine Minister for Finance on April 13 issued a decree putting into effect as from April 22 the 20 percent differential on purchases of exchange for imports for which official exchange is not available as established in Article 16 of law 12,160. This decree exempts from its operation imports from adjacent countries. Local opinion ascribes to this measure the character of discrimination against the United States in an effort to force the signature of a commercial treaty. Other opinion ascribes the desire to obtain larger governmental exchange profits to protect possible loss on sterling holdings abroad in the event of further depreciation of European or American monetary units. Bankers believe that imports will be reduced until the demand for exchange locally will be less than that available as a result of present heavy grain exports foreclosing eventual modification.