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

No. 833

Sir: Referring to the Embassy’s despatch No. 780 of July 5,14 I enclose copies of a report dated August 16, 1935, prepared by the Embassy’s Commercial Attaché, giving an account of his recent meetings with officials of the Argentine Ministry of Finance to establish the cause of the discrepancy existing between the statistics of Argentine exports to the United States issued by that Ministry and the returns declared before the American Consulate General in Buenos Aires. Dr. Dye is hopeful that if proof can be given that the value of Argentine goods entering the United States since January 1, 1935, is in excess of the value of American goods entering Argentina, the Argentine authorities will give more liberal exchange facilities to cover imports of American goods into Argentina.

Respectfully yours,

For the Ambassador:
Raymond E. Cox

First Secretary of Embassy

Special Report 316–C by the Commercial Attaché in Argentina (Dye)

Since the early part of this year, a discrepancy has been noticed between the statistics of Argentine exports to the United States compiled from consular invoices which have been certified in the Consulate General and the Argentine official export statistics. This discrepancy increased as the year advanced and for the first six months the declared value of Argentine exports as stated in consular invoices sworn to before the American Consulate General amounted to the equivalent of about 126 million paper pesos, whereas according to Argentine official statistics they amounted to only about 86 million paper pesos, the discrepancy being approximately 40 million paper pesos.

A number of conferences was held by the Commercial Attaché with the Director General of Statistics and the Assistant Director of the Exchange Control Office, and detailed information was prepared by the Consulate General, showing the basis on which shipments of corn, wheat, rye and oats were made to the United States. The result of the conferences has been as follows:

Between seven and eight million pesos were accounted for by the fact that cereals were sold in advance at a higher price than the price [Page 277] prevailing at the time shipment was actually made. For instance, the value given by the exporters of shipments to the United States of corn in January amounts to an average of $7.33 paper pesos per 100 kilos, whereas the average of current prices for corn for export in Buenos Aires during the month of January was only $5.95 paper pesos, showing a difference of about 21 percent. The explanation was that the corn which was actually shipped in January, 1935, was sold in September, 1934, at a price which was higher than the price at the time of the actual shipment. Inasmuch as the value given in the declaration before the American Consulate was the real value, our claim is that that amount of exchange should have been allocated to American interests. The Exchange Control Office has admitted the justice of this claim.

The result of the investigation of the cereal shipments has shown that the largest discrepancy is in the tonnage. For instance, in the month of May, according to the Consulate’s figures, 181,000 tons of corn were shipped to the United States, whereas according to the Argentine Statistical Office only 40,000 tons were shipped. However, in checking back shipment by shipment, it shows that in the month of May, according to the Argentine statistics, out of 181,423 tons, which the Consulate General claims were shipped to the United States, 148,950 tons, or 82 per cent, was declared before the Argentine authorities as shipped “To Order”. Shipments “to order” have ninety days before they must report the country of destination and exchange is provided. As the bulk of the exports of cereals to the United States was shipped after the 1st of April and, therefore, they will have ninety days from that date, they will not have to report the shipments until in the middle of July and thus will not appear in the statistics until these are out for the month of August. I have been assured by the Exchange Control Office that when this tonnage is eventually allocated, that the exchange will also be allocated and given to American interests at the official rate. We shall, therefore, have to watch the statistics carefully, particularly from September 1st onward.

An investigation of the shipments of rye showed that the Consulate General had received consular invoices declaring that a total of 44,208 tons of rye had been shipped to the United States. According to the Argentine figures, however, all of this amount went to Canada to the Port of Montreal. It is the belief of the Consulate General that this rye actually entered the United States and a telegram has now been sent by the Consulate General, giving the names of the six boats and requesting information as to whether this rye was actually landed in the United States. As soon as a reply is received, the Argentine Statistical Office and the Exchange Control Office will be advised.

The Argentine authorities brought up the point as to whether there were not two consular certificates taken out for this rye: one for [Page 278] Canada and one for the United States, but the American Consulate General assures me that this is not the case; that Montreal is a free port and that, consequently, it was not necessary to take out any Canadian consular invoices.

During all of this discussion, we have not taken the position that it was satisfactory to accept only the exchange which was provided by exports to the United States, but efforts were made to show that even on that basis, the American interests were not receiving the exchange which the Argentine Government declared it was willing to give them, due to the discrepancy in statistics. If our position is correct (and we believe it is), that these cereals eventually reached the United States and were actually imported, it should provide us with about 40 million pesos additional exchange which should be cumulative during the latter part of the year, and which should assist imports from the United States to that extent.

Respectfully submitted:

Alexander V. Dye
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