835.51B861/105: Telegram

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

170. Referring to my telegram No. 167, August 9, 3 p.m., Dr. Dye has just talked with legal counsel for the Province of Buenos Aires who asserts that in his opinion there is legal justification for the present attitude of the Province in the matter of the proposal made to the American Bondholders adding that this offer is satisfactory to the New York bankers but unsatisfactory to the Foreign Bondholders Protective Council.

This lawyer also stated confidentially to Dr. Dye that the contents of a telegram addressed by the American Bondholders Protective [Page 284] Council on the subject in question to the British Bondholders Committee was made known to the Minister of Finance of the Province of Buenos Aires who considers its language highly offensive and is incensed over it.

Dr. Dye feels that there is still a possibility that the Province of Buenos Aires may offer better terms and is continuing to urge on the authorities of the Province an improvement of their offer.