Foreign Relations of the United States Diplomatic Papers, 1940, The American Republics, Volume V

641.1115/40: Telegram

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

Washington, May 27, 1940.

79. Your cable no. 152 of May 22 has been called to the attention of the Department of Agriculture and Secretary Wallace is planning to send to the Department to be forwarded to you by air mail in the very near future a comprehensive memorandum²⁵ on the entire corn situation and program in the United States and their relation to the recent sale of corn to the United Kingdom. In the meantime you may wish to point out to the appropriate Argentine authorities the following pertinent facts:

1. The corn sold to the United Kingdom was out of government-owned stocks. The total amount of corn now held by the Government amounts to 550,000,000 bushels of which 90,000,000 bushels are owned outright. The corn for the United Kingdom will come out of the 90,000,000 bushels.

2. This sale was made at a price higher than that at which Argentine corn was currently quoted.

3. The British Government offered to buy this corn at a price higher than Argentine corn could have been bought, presumably because of an urgent need of feed and because of the shipping situation.

The Argentine Government might also feel less critical of the operation if it appreciates that American export outlets for many of our farm products are very badly shattered by current events. This includes the export market for pork products in which form our corn export has previously largely taken place. In that sense our entry into the export market with corn is not new.

The Department is extremely desirous that at this time no unnecessary causes of friction or criticism arise between the two Governments and therefore has given much thought to the possibilities of avoiding trouble arising out of the fact that both of the countries are faced with such serious surplus problems in corn. Considering the Argentine Government’s memorandum as cabled in your No. 152 and the observations in the same sense made by Ambassador Espil, the Department is of the opinion that every effort should be made to find a constructive solution. Events during the next few months may intensify the difficulty which faces both countries in this field or alternatively they might greatly lessen the difficulty. Prediction seems impossible. If it would interest the Argentine Government we are prepared to enter into discussions at once of a possible agreement between the two countries (covering a period of time to be discussed between the two Governments) for the coordination of marketing activity in this field. We should be prepared in the course of these discussions to consider all other suggestions that might be helpful to both countries. Please ascertain whether the Argentine Government is interested in this possibility and if so the method by which it thinks such discussions could be most effectively carried on.

Hull

25. A letter dated June 1, 1940, from the Secretary of Agriculture to the Ambassador in Argentina, was transmitted to the Ambassador with covering instruction No. 278, June 8, 1940; neither printed.