611.3531/1585: Telegram

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

216. Department’s 184, August 16, 1940, 5 p.m. Your nos. 402, September 11, 8 p.m., and 405, September 12, 4 p.m.

1. You should, unless you perceive objection, make the following proposals to the appropriate Argentine officials40 with reference to the indicated paragraphs of the Department’s no. 184 under reference:

Paragraph 1 (b). Total exports of corn from Argentina and the United States would be allotted between the two countries in a ratio of 80 percent for Argentina and 20 percent for the United States.

The Department of Agriculture feels that this ratio is a fair and reasonable allocation of the trade (1) on the basis of exports over a [Page 496] recent or a long period of time which eliminates the effect of abnormal drought years; and (2) since 20 percent is less than one-half the usual United States share of the total export trade in corn of the two countries when the corn equivalent of livestock and livestock products exported from each country is included. You might state that in view of the large stocks of corn now held by the Commodity Credit Corporation and its existing export program with respect to corn, the Department of Agriculture feels that it would be in a position to obtain at least 20 percent of the export trade in corn of the two countries.

Paragraph 1 (c). A minimum price of 80 cents a bushel of 56 pounds basis c. i. f. Liverpool or the equivalent thereof would be specified in the Agreement. This price would be subject to subsequent modification by agreement of the two governments upon the recommendation of the Advisory Commission. In lieu of a minimum c. i. f. Liverpool price we would be agreeable to exploring the possibility of establishing a minimum f. o. b. export price at Buenos Aires and its equivalent for exports from the United States.

Paragraph 1 (d). We are prepared to accept in the agreement the minimum domestic price for Argentine corn of 4.75 pesos per 100 kilos now in effect.

2. The construction of a plant to distill alcohol from corn is interesting and we would like to have the proposal explored thoroughly. Please transmit by air mail a report giving an estimate of the amount of corn which might be so utilized and all other information on this proposal which you may be able to obtain from the Argentine Government together with your comments regarding the feasibility of such a project. With reference to the request for credits, it is suggested that you discuss this matter with Mr. Pierson upon his arrival in Buenos Aires.

3. The text of a draft corn agreement embodying these proposals will be transmitted to you as soon as possible.

4. If Congress adjourns in the near future, as now seems likely, it will of course not be possible to obtain specific enabling legislation to implement on our part any agreement which may be concluded. Further consideration is being given to means of making an agreement effective under existing legislation and you will be advised further in this connection at a later date.

  1. The Chargé in Argentina enclosed in despatch No. 1292, September 24 (not printed), a copy of a memorandum, based on this telegram, handed to the Foreign Office member of the Argentine Inter-Ministerial Committee on September 20.