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

No. 736

Sir: Reference is made to my despatch No. 692 of May 3, 1935,11 reporting the Embassy’s inquiry, in compliance with the Department’s telegram No. 37 of April 29, 6 p.m., 1935, of the Under Secretary for Foreign Affairs as to whether there was any foundation for the current report that a surcharge of twenty per cent, would be added to all bids for Argentine Government contracts received from countries with which Argentina had an unfavorable trade balance.

The Under Secretary has now handed me as a reply to this inquiry a memorandum from the Exchange Control Office. A translation of this memorandum is enclosed herewith.11

Quoting from decrees No. 46848 and No. 56197 dealing with the purchase of goods from abroad for Government Departments, the memorandum states in part as follows:

“… in order to compare, with a view to placing the order, the different bids made in foreign currencies, such bids shall be reduced to national currency at the average rate of exchange of proposals accepted on the previous working day by the Exchange Control Office. This (provision applies) when such goods, under regulations in force, are subject to previous exchange permits; for other goods, the free market rate shall be applied.”

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The “regulations in force” place in the hands of the Exchange Control Office the right to determine whether the official or the open market rate shall be applied to cover goods for Government contracts.

Respectfully yours,

Alexander W. Weddell
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