835.5151/596

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

No. 1389

Sir: I have the honor to refer to the Embassy’s despatch No. 1354 of September 17, 1936, informing the Department that official exchange is being granted on all the fifty categories of merchandise granted by this exchange concession with the exception of X-ray films. I now wish to report that X-ray films are also receiving official exchange.

I yesterday had a further discussion with the Minister of Finance over matters connected with our commercial relations. The principal reason of my visit with him was to urge an increase to the list of fifty categories of merchandise from the United States to receive official exchange granted to us by the Minister’s note of June 16, in which he promised to study the possibility of such an increase. I enclose herewith a memorandum of my conversation with the Minister.

While Argentina’s exchange position has strengthened considerably with an increasing amount of foreign exchange available, this position hinges to a large extent on the outcome of the negotiations now going on for a renewal of the Roca-Runciman Agreement. I understand that exporters shipping products to Great Britian as well as British vested interests here are pressing for exchange concessions eliminating the Government’s margin of profit between the buying and selling rate, and that this aspect is now playing a large part in reaching an agreement satisfactory to both countries.

Respectfully yours,

Alexander W. Weddell
[Enclosure]

Memorandum by the Ambassador in Argentina (Weddell)

I called on the Minister of Finance today by appointment and discussed with him at considerable length various phases of our commercial relations which are of current interest to us both.

I first referred to the Minister’s order of June 16 relative to official exchange granted to fifty categories of merchandise imported from the United States and recalled his expression of hope that he might increase the list of such categories. I pointed out to him the feeling on the part of our Government that continuation of Argentina’s exchange restrictions still contains elements of discrimination. The Minister said that he would continue to study the matter of increasing the number of categories to be granted official exchange and would advise me later.

I also referred to my hope that official exchange would be granted to American bidders for the three series of contracts of the Argentine [Page 217] Government for elevators and for elevator equipment. The Minister said that he was having a meeting this afternoon of the Autonomous Commission which had this matter in charge and which would discuss and settle these very points. The Minister said he would be very glad to inform me by memorandum tomorrow what decision had been arrived at. The Minister said in conection with this that it had been decided to pay for the grain elevators in cash and not by Government bonds.

I called the Minister’s attention to the fact that while the United States was now importing large quantities of Argentine corn shipped via Canada, exchange credit for such shipments appears not to be given to the United States. I stated that up to the end of September it was my understanding that the United States had purchased $20,000,000 worth of Argentine corn and $12,000,000 worth of Argentine linseed but that the United States is credited with having bought only $8,500,000 worth of corn and $10,500,000 worth of linseed. While I realized that there are explanations for some of the discrepancies in these figures, I said I was sure a good deal of the exchange that should be credited to us is being credited to Canada. The Minister said that as a result of a new system of statistical accounting which was being introduced he thought it would be possible to straighten out the matter of the conflicting figures. I said I hoped that later after we had secured more detailed official figures the Embassy could take this matter up with the Statistical Office. The Minister said he would be glad to have this done and to discuss further phases of the question.

We spoke at some length of the movement of American capital to Argentina and of a certain amount of uneasiness provoked by recent events. We touched on the action of the Municipality of Buenos Aires in connection with the by-law making the sale and distribution of gasolene a public service and its possible effect. In this connection I emphasized to the Minister my understanding that foreign capital in Argentina would be fully protected as long as it obeyed domestic laws and regulations without regard to its foreign origin.

Before leaving the Minister I expressed my thanks for his action of September 22 regarding the customs classification of refrigerating units (see Embassy’s despatch No. 1374 of October 2, 193644). I said to the Minister that his resolution which was gratifying to exporters of such units from the United States and to local importers and manufacturers makes operative what is practically an equivalent of the previous classification and corrects any element of discrimination. The Minister said he had been very glad to arrange this despite some opposition from the customs authorities.

A[lexander] W. W[eddell]
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