611.3531/1581: Telegram

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

402. Embassy’s 379, August 28, 7 p.m. and 399, September 10, noon.38 This afternoon Dr. Federico Pinedo, the Minister of Finance, informally advised a member of the Embassy’s staff that he will be pleased to negotiate a corn agreement along the lines of the Department’s 184, August 16, 5 p.m. and will so officially advise the Foreign Minister this evening. He added, however, that the Argentine Government will require assistance in disposing of its corn surplus since [Page 495] under existing conditions it appears that the Argentine Government will have to sell the bulk of this surplus for fuel taking a loss of between 225 and 250 pesos per quintal.

Dr. Pinedo believes that a great part of the corn surplus problem would be solved if a suitable distillation plant could be set up locally for the manufacture of alcohol from corn. Such a plant, he thinks, would cost about 60,000,000 pesos. Therefore one of the questions which the Argentine Government will have to raise during the course of the negotiations for a corn agreement, is whether the United States Government will make Argentina a suitable loan and/or facilitate the installation of machinery and other equipment in the distillery through the extension of export and import bank credits.

  1. Latter not printed.