611.3531/1534: Telegram
The Ambassador in Argentina ( Armour ) to the Secretary of State
[Received 11:16 p.m.]
231. Embassy’s telegrams 219 of June 14, 4 p.m.,5 229 of June 17, 11 a.m., and 230 of June 17, 4 p.m. It is obvious that a concerted effort is being made by the Central Bank group to bring pressure on the United States to do certain things for Argentina but be that as it may I am convinced that the issues at stake are so important and the need for prompt and vigorous action so great that nothing should be permitted to stand in this [the?] way of our undertaking immediately a program of our own designed to insure the support of countries in this area and obviate the defections from American solidarity that now represent an immediate danger.
In view of the critical situation in Europe and its repercussions here the following summary of recommendations set forth in airmail despatch No. 793 of June 14 is now submitted by telegraph: It is believed that however much sympathy there may be here for the democracies consideration for markets will determine Argentina’s alignment and that a decision of major importance may be made soon on the basis indicated. Thus I am convinced that we must choose the duty of (1) taking decisive and far-reaching action to provide these countries with an economic alternative to the prospect Germany now holds open to them, or (2) seeing this country make a definite decision soon to accept the proposition of the Germans breaching the American front and opening the way to economic and possibly political domination.
[Page 466]As to constructive suggestions it is recommended (1) that steps be taken to remove doubt with regard to the ability and determination of the United States to defend the Western Hemisphere; (2) that emergency powers be requested from Congress to enable the United States to counteract the forceful methods of the totalitarian states, such as authority to suspend or augment imports, facilities for buying and selling foreign commodities, et cetera; and (3) that as an immediate step to check the present trend the Government purchase under the program to build up war stocks of essential supplies for war purchases certain Argentine products such as wool, quebracho, preserved meat, hides, vegetable seeds, et cetera with a view to relieving the immediate anxiety of this country on the score of dollar exchange with which to meet necessary purchases in the United States.
If our Government could by strictly unilateral action relieve the present situation time would be gained in which to work out a more comprehensive long-range program on a sound basis. If the foregoing plan should be approved, it is suggested that I be authorized to convey the information directly to President Ortiz to obviate any danger of a repetition of past unfortunate experiences in attempting to make arrangements through the technical experts of the Ministry of Finance.
The President of the American Chamber of Commerce and the heads of the two American banks called on me this morning to outline a plan to meet the present danger. They suggested that the United States purchase essential supplies such as those mentioned above to the value of 25 million dollars and discussed financial and other arrangements that might solve the larger economic problem of this and other American countries in a similar situation. They feel most strongly that a striking gesture in the nature of purchases of Argentine products rather than the extension of credits are needed in order to forestall a possible disastrous defection in the American ranks. As to financing, it is believed that the offer of loans alone would be ineffectual and therefore undesirable except as part of a coordinated plan.
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