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

No. 1137

Sir: I have the honor to enclose herewith the translation of a memorandum received today from the Minister of Finance, Dr. Ortiz, which he mentioned in my conversation with him on April 16 as in the process of being prepared for the Embassy (See Embassy’s despatch 1130 of April 17, 1936).

This memorandum outlines the current exchange control policy of the Argentine Government, particularly as regards the United States. It is, I think, the first clear official statement of its kind. The Department will note the statement that the general situation in Argentina does not make it possible for the exchange treatment applied to the United States to be exactly the same as that granted to the countries that have signed commercial agreements or treaties on any basis, but that it is the intention of the Argentine Government to endeavor by all [Page 202] means to make it possible for such a treaty to be concluded with the United States.

While later, on further study of this memorandum, I may have other comment to make, I shall appreciate any possible comment by the Department.

Respectfully yours,

Alexander W. Weddell

The Argentine Ministry of Finance to the American Embassy


I. The Argentine Republic has found it necessary to adopt the system of exchange control in force at present, by reason of the obstacles of different kinds created against the introduction of its products in the consuming markets, whether it be in the form of prohibitive tariffs, of quotas or of sanitary prescriptions.

Owing to the reasons to which reference is made, it has been necessary to distribute available exchange on the basis of the requirements which must be met and of the interest that such requirements represent in our economy.

II. Once the obligations contracted through signed agreements are covered, the Argentine Republic endeavors to distribute among the remaining countries the available exchange in proportion with their purchases from the Argentine Republic.

However, it is not always possible to distribute among the countries with which no agreement exists, a quantity of currency equal to that which would be fitting should such an agreement have been signed. In effect, previous permits are granted with an advance which in certain cases reaches 180 days before the arrival of merchandise and it is indispensable to have the assurance that in the near future no difficulties will be encountered for the exportation of Argentine products to the country in question.

III. In order to insure the payment without restrictions or delays of imported products in the proportion of purchases effected by foreign countries, after a previous deduction of a reasonable quantity for the payment of the foreign public debt, as has been done with regard to agreements signed with different countries, it is necessary to have a possibility of establishing with a time in advance the volume of purchases effected in the Argentine Republic.

IV. The figures supplied by the Exchange Control Office regarding public, national, provincial and municipal debt services paid to the [Page 203] United States are correct. They reflect the exact value of transfers effected in the course of each year relative to this item.

Our Government had had to display real efforts to succeed in having the nations with which it has concluded agreements contribute to the payment of the public debt in countries whose commercial interchange does not show a sufficiently favorable balance for Argentina; without this the restrictions on the granting of currency to said countries would have been even greater.

V. Our Government fully appreciates the contribution towards its progress represented by the investment of foreign capital and especially capital from the United States and it wishes to dissipate the impression transmitted by the Ambassador concerning the purpose of deliberate treatment which might prejudice the investors. This misunderstanding may have as a basis the comparison of our figures of interchange referring to only one of recent years. If a study is made of permits granted during the years 1933 and 1934 as compared with figures of the total interchange of those years, it will be admitted that our Government has endeavored to be broadly liberal in the midst of difficult circumstances through which it has passed during that period. It is evident that the comparative liberality prevailing during those years stands in contrast with the figures of interchange registered in 1935, due to somewhat artificial circumstances, as is recognized by the Ambassador. However, confronted with those figures, the granting of permits has maintained a discreet proportion.

Unfortunately, and for the time being, the general situation does not make it possible for the treatment applied to the United States to be exactly the same as that granted to the countries that have signed commercial agreements or treaties on new bases, but it is the intention of this Government to endeavor by all means to make it possible for such a treaty to be concluded with the United States, because it is desirous of being able to give the proper treatment to the commercial and spiritual relation connecting it with that country. Until such time as this purpose is realized,—a purpose common to both countries,—this Department will do all in its power to improve that treatment in order to contribute to create grounds of understanding which may make it possible for the desire to sign a commercial treaty promptly to be put into practice.

The treatment imposed so far has been due to circumstances foreign to the will of Governments, it being indispensable—I repeat—to obtain in future the necessary guarantees so that our regular exports to the United States may be facilitated with the same liberality granted by that country to imports of other origin.