The Secretary of State to the Ambassador in Argentina (Armour)
288. The Export-Import Bank has offered to cancel the 20 million dollar loan and grant instead a 3.6 percent 60 million dollar loan to be made available in 1941 at the rate of 5 million dollars a month. Amortization would begin 18 months from January 1, 1941 at the rate of 5 percent each 6 months up to the 72nd month when the balance would be paid in cash or optionally 3 million dollars thereof would be paid in cash and the rest at the rate of 10 percent each 6 months during the next 2½ years.
The Treasury has offered a stabilization fund operation whereunder it would buy pesos up to a total of 50 million dollars in 1941. It would pay 23 cents to the peso with the understanding that the Central Bank would buy the pesos back at the same rate. Ordinarily the Treasury would buy at the rate of 4 million dollars a month, but if desired would in any 1 month buy a greater quantity upon cable advice. Argentina’s financial requirements would be re-examined in 9 months to determine whether the arrangement should be extended.
The questions of preliminary trade agreement conversations23 and Government purchases of Argentina wool, hides and canned corned beef are being considered.