611.3531/1546: Telegram

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

184. Department’s 79, May 27. Your 261, June 29, 7 p.m.

You are requested to ascertain whether the Argentine Government would be disposed to undertake the negotiation of a corn agreement between the United States and Argentina along the following lines:
An Advisory Commission would be established consisting of representatives appointed by each Government, which would perform the functions specified hereunder as well as give consideration to any general problems arising in connection with the operation of the Agreement, and make recommendations relative thereto;
During the 2-year period beginning October 1, 1940 total exports of corn from Argentina and the United States, as provided for in the following sentence, would be allotted between the two countries in a ratio to be incorporated in the Agreement. The aforementioned [Page 493] Advisory Commission would periodically appraise and estimate the world import demand for United States and Argentine corn during the term of the Agreement, and the quantity of corn thus estimated by the Commission would constitute the maximum quantity of corn which could be exported from the two countries;
No sales of corn for export during the period of the Agreement would be permitted by the Government of either country below a price to be specified in the Agreement except as might be agreed upon by the two Governments upon the recommendation of the Advisory Commission. All sales for export in either country and the terms of sale would be reported immediately to the Advisory Commission;
The two Governments would agree that it is desirable that no action be taken during the period of the Agreement which would encourage further expansion in production of corn in their respective territories. Accordingly, the Government of the United States, on its part, would agree to continue a crop-control program for corn. The Argentine Government, on its part, would agree to take steps looking toward the establishment of a production or marketing control program for corn at the earliest practicable date; and would agree, further, until such a control program were established, not to fix a minimum domestic price for corn in excess of a figure to be specified in the agreement;
Each Government would agree to take whatever steps it might find practical to increase the utilization of corn. The Advisory Commission would devote special attention to this problem and would report its findings and make recommendations relative thereto to the respective Governments. Each Government would agree to make available to the other such results as it might obtain from research investigation with respect to corn utilization.
Presumably the Agreement, if concluded, would be made effective on our part through enabling legislation.
Espil has been informed that the Department of Agriculture has received inquiries looking toward the sale to the British Government of additional quantities of corn, now held by the Commodity Credit Corporation. For your information and such use as you may deem appropriate, these inquiries are not being followed up for the time being pending exploratory discussions as to the possibility of concluding an agreement along the foregoing lines; also, the Department of Agriculture feels that inasmuch as Argentine corn is being currently offered for sale and sold in United States ports at prices under the current United States market, and in view of the large domestic supplies of corn, failure to conclude in the near future a satisfactory agreement covering the marketing for export of United States and Argentine corn would make it extremely difficult to avoid action under Section 22 of the Agricultural Adjustment Act of 1933, as amended,34 looking to the possible imposition, by proclamation of [Page 494] the President, of quantitative limitations or fees on the importation of corn.
If the Argentine Government should be disposed to undertake negotiations along these lines, we would forward the text of a draft agreement with a view to your conducting the negotiations there with the help of Nyhus.35
  1. 49 Stat. 773.
  2. Paul O. Nyhus, Agricultural Attaché in Argentina.