835.51/1323: Telegram

The Secretary of State to the Chargé in Argentina (Tuck)

220. Department’s 219, September 20 and your 422, September 19, noon.16 The Department believes that the discussions with the Secretary of the Treasury may lead to monetary and exchange arrangements of great importance. As you know, any such arrangements would constitute a new departure for the Treasury, which hitherto has employed the Stabilization Fund in operations always completely collateraled by gold or silver bullion. The Department believes that the Treasury is now prepared to consider and discuss arrangements with the Argentine financial authorities which would under appropriate conditions make dollars available for the maintenance of stability in the peso-dollar exchange relationship.

It is also the Department’s view that the Washington discussions would be of a basic long term monetary character and as such would not greatly conflict with the discussions of Mr. Pierson, which will [Page 478]embrace short term commercial banking arrangements and the financing of long term development projects. Ambassador Armour has discussed the entire Argentine situation with the Secretary of the Treasury, who has indicated a willingness to discuss such basic relationships.

The Department does not expect that Dr. Pinedo will be in a position to come personally to Washington, and doubts the wisdom of such a prominent official coming to Washington during the next 2 months. The Department believes, however, that the Argentine representative who does come should be a person well qualified to carry on discussions and conclude any arrangements with the Treasury.

Hull
  1. Latter not printed.