835.51B861/104: Telegram

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

167. Referring to Department’s telegram No. 112, August 2, 1 p.m., Doctor Dye22 has made an exhaustive study of this subject which goes forward by air mail today.23 Because of its complexity and length I am not telegraphing it. However, Doctor Dye draws attention to the following points:

He does not consider the offer made to dollar bondholders equitable but thinks it could be made so by the Province, consequently discrimination cannot now be definitely claimed unless the Province rigidly maintains its present position. An examination of the text of the several bond issues strongly indicates that a first lien on the consumption tax was given to the sterling 5 percent bonds of 1915 and also to the 7½ percent dollar bonds of 1925. It also appears that by adhering on January 31, 1945 [1935], to the national unification law number 12,139 the Province annulled the provincial law which created the consumption tax thereby extinguishing revenues which were pledged to service on dollar bonds. Legal counsel for the Province informally plead necessity of a public order for this action.

The Commercial Attaché is continuing discussions with financial representatives of the provincial government and their legal counsel.

In the circumstances I have not yet brought the matter to the notice of the Foreign Office.

  1. Alexander V. Dye, Commercial Attaché.
  2. Not printed.