The Ambassador in Argentina ( Weddell ) to the Secretary of State
[Received June 12.]
Sir: I have the honour to recall to the Department that on instructions contained in its telegram No. 37 of April 29, 6 p.m., 1935,33 the Embassy in protesting against the Argentine decree establishing a surcharge of twenty per cent, on goods entering Argentina without prior permit, took up with the Argentine Foreign Office the question of the reported intention of the Argentine Government to favor countries with which Argentina has a favorable trade balance in the matter of Government contracts. No satisfactory results were obtained. From time to time the Embassy has subsequently heard of various Government contracts being awarded to firms of countries with which [Page 207] Argentina has a trade agreement even though the American bids were substantially lower.
In this connection and as illustrative of what I have just said are the facts set forth in a letter (copy enclosed)34 the Embassy has received from Mr. C. T. Brady, Jr., American representative of the United States Steel Products Company. In this case it will be seen that while the bids of three American concerns for merchandise desired by the Argentine Ministry of Agriculture were lower than the bid of a British concern, the latter received the contract.
I have reported in my despatch No. 1130 of April 17, 1936, my recent conversations with the present Minister of Finance, Dr. Roberto M. Ortiz, in which I have urged equality of treatment for American interests in matters of exchange, Government bids, etc. The Minister who on the surface at least takes a different attitude toward this question from that of his predecessor, Dr. Pinedo, assured me that more liberal treatment would be accorded American goods. In my despatch No. 1137 of April 20 I enclosed a copy of a memorandum received from him stating in effect that the general situation in Argentina did not make it possible for the exchange treatment applied to the United States to be exactly the same as that granted to countries which have signed commercial and exchange agreements or treaties on any basis, but that it was the intention of the Argentine Government to endeavor by all means to make it possible for such a treaty to be concluded with the United States.35
I enclose for the Department’s information the English text of a communication in Spanish dated May 2934 which I sent to Dr. Ortiz on this subject. In my communication I referred specifically to the contract for merchandise for the Ministry of Agriculture mentioned above in this despatch and requested his good offices in working for a change of attitude and policy on the part of the Argentine officials toward American concerns.
While I shall do everything I can to remove these discriminations against American commerce, I very much fear that the situation will continue precisely as it is today until such time as the United States is in a position to insist on equitable treatment and to make its insistence effective. The Argentines are fully aware of their present advantage and are leaving no stone unturned to persuade us to come to a trade agreement with them. At the moment they are negotiating with the British for a renewal of the Roca-Runciman Agreement and will throw everything they can to the British to facilitate that end. Moreover, the Argentine Government has reaped a small fortune, [Page 208] variously calculated to be today in the neighborhood of 300,000,000 pesos, through exchange manipulation and I can foresee that it will be very loath indeed to give up such a source of easy money.
I should greatly value the Department’s comments and instructions on the foregoing.