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

No. 1150

Sir: With reference to the Embassy’s despatch No. 1137 of April 20, 1936, and previous correspondence concerning my efforts to obtain equality of treatment in the allotment of official exchange, I enclose herewith a copy of a letter received today from the Trade Commissioner in charge, Mr. DuWayne Clark, giving a résumé of his conversation with Mr. Luro, head of the Exchange Control Board.

As I have previously reported, the Embassy, including the office of the Commercial Attaché, is taking every appropriate opportunity to press with the Argentine authorities for equality of treatment with regard to the allocation of official exchange. With the important negotiations going on at present for a renewal of the Roca-Runciman Agreement,32 it would seem that the Argentines are particuarly anxious not to give the British Government any impression that the Argentine Exchange Control Board is relaxing in any way toward favoring British purchases wherever possible by preferential treatment in the granting of official exchange.

Respectfully yours,

For the Ambassador:
Raymond E. Cox

First Secretary of Embassy

The Acting Assistant Commercial Attaché (Clark) to the Ambassador in Argentina (Weddell)

Dear Mr. Ambassador: I enclose herewith for your information a résumé of my conversation on April 23 with Dr. Louro, Director of the Exchange Control Board.

In opening my discussions with Dr. Louro, I referred to your visit to Dr. Ortiz some days ago, at which time you had submitted the memorandum covering the two cases of discrimination against American materials in connection with Government contracts, and Dr. Louro informed me that Dr. Ortiz had referred this memoradum to him for study. However, I left another copy of this memoradum with Dr. Louro. He, Dr. Louro, then explained that there might be a possibility of the Government favorably considering our representations insofar [Page 205] as the tender of the Obras Sanitarias for aluminum sulphate is concerned, and he intimated that this matter had been referred to the Obras Sanitarias for its consideration. However, as regards case No. 2, the tender for steel sheets, Dr. Louro very frankly pointed out that the fact that a British firm had submitted a bid practically presumed that this company would secure the business, due to the policy of the Government to divert purchases to Great Britain whenever possible. Dr. Louro mentioned that from their point of view our suggestion that these tenders should be granted on the basis of official exchange for all bidders, and that the minimum expenditure of money by the Government should be a point of material consideration, was beside the point, and that, particularly in view of the negotiations now going on in London, it was necessary to favor English manufacturers, even if this policy actually cost the Argentine Government slightly more money.

After the discussion of the memorandum, Dr. Louro volunteered the information that he had received instructions from Dr. Ortiz to be more generous whenever possible in the consideration of requests for previous exchange permits covering importations of merchandise from the United States, and in line with this suggestion from the Minister of Finance, Dr. Louro informed me that he was closely studying the entire schedule of the Exchange Control Board regarding the allocation of exchange, and that he expected to be able to make a full report to Dr. Ortiz within the next few days. Dr. Louro stated that it was very probable that as a result of this study it would be found possible to be somewhat more lenient with American requests for exchange.

I then took up with Dr. Louro the question of the construction of the grain elevators, and he categorically informed me that so far as he knew, at present, manufacturers in Great Britain and in Germany were the only ones who could submit bids for machinery and equipment in anticipation of securing official exchange. I inquired as to the possibility of the Government finding it necessary to purchase special machinery in the United States which could not be secured from any other source, and Dr. Louro pointed out that in the case of such special machinery, official exchange would be allowed, but that such a matter would have to be the subject of a particular study. He did not hold out any hope for American interests in securing any great proportion of this elevator business, as its allocation, as in the case of the steel sheets, is apparently to be placed with the British interests if this is possible.

In leaving Dr. Louro he asked me to feel perfectly free to come to him and to Dr. Calvo, his assistant, whenever there was anything that the Embassy might like to discuss regarding the matter of exchange, or exchange control. I naturally assured him that I appreciated his attitude, and warned him that I should very probably take advantage [Page 206] of his offer. I could not, however, avoid the conclusion during our conversations that the policy of the Exchange Control Commission is dictated by the Minister of Finance himself, and that Dr. Louro is simply its guardian. In other words, any concessions that may be made to American goods, or any improvement in general conditions must come from Dr. Ortiz. Dr. Louro also spent some time in discussing with me the renewal negotiations of the Roca-Runciman Treaty, and outlining the point of view of the Argentine Government regarding the necessity of making concessions to the British interests. Without his saying so, I gathered that the current policy is to extend further advantages to Great Britain even at the expense of Argentina’s other commercial relations and I frankly think that there is a distinct possibility, if the Agreement is renewed, of the position of American merchandise in this market being even further prejudiced. On the other hand, if this agreement should not be renewed, our chances for better treatment would improve immeasurably. However, I do not think that there is any reason to believe that the Agreement will not be renewed, that is, insofar as the Argentine Government is concerned, although there is always the possibility of it becoming a bone of contention between the Government of the United Kingdom and the various Dominions. In any event, I certainly do not think that there is any chance of our seeing any distinct or definite gain in the amount of official exchange granted for American merchandise coming into this market until the London negotiations have been concluded.

I have [etc.]

DuWayne G. Clark
  1. Signed at London May 1, 1933, League of Nations Treaty Series, vol. cxliii, p. 68. See also Foreign Relations, 1933, vol. iv, pp. 722 ff.