835.796/203: Telegram

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

1202. Following for Harding or Burden64 of Defense Supplies Corporatión from Knowlton and Royce.65

“We are impressed with potentialities proposed Sana route but we do not believe our Government should assist establishment this operation alone because sponsors not first class nor do they have competent [Page 353] executive or technical management and there is no great need at present as cabotage adequately handled by Panagra. However, our primary objective is elimination of Corporación for we are satisfied Aeroposta is in no sense now under German control or even influence whereas Corporación is in fact controlled [through] indirect ownership by Italian Government. Therefore if we can bring about elimination of Corporación, influence of Italy and Germany in internal lines is eradicated.

We are convinced that Argentine Government knows of Italian Government ownership of Corporación but will not voluntarily take any action. Furthermore internal politics make present time most inauspicious for expecting helpful action by Argentina in any general program.

In spite of objections to Sana above mentioned we believe that because of inertia of Argentine Government we should take advantage of fact that Sana’s sponsors are energetically interested and have certain influence as evidenced by fact they obtained concession. We believe the new Sana route operated in conjunction with a line from here to Asunción replacing present Corporación operation and also taking in territory to east of it, namely, cities along Uruguayan border, would make a promising operation. We believe it probably desirable that such an operation be developed as an Argentine enterprise headed by an Argentine of highest standing with desired contractual arrangements as to equipment and personnel and management contract with Pan American Airways. Our hope is that such a project would sufficiently appeal to Argentina to cause it to cancel Corporación’s Asunción concession. We would try for inclusion of Aeroposta in above development but as Aeroposta seems satisfied with its present status and believes its present equipment adequate for next few years it may not be possible to obtain at this stage more than an entente cordiale between Aeroposta and the new operation.

Cancellation of Corporación [‘s] Montevideo concession will probably be more difficult and unless you object we should like acting in cooperation with State Department representatives to consider possibility of accomplishing this through Uruguay.

We have made no selection yet of Argentine to head enterprise or of persons to assist in negotiations …

Please cable earliest your comments.”

Above telegram given back number coded October 28, noon.

  1. William A. M. Burden, vice president of Defense Supplies Corporatión.
  2. Hugh Knowlton and Alexander B. Royce, representing the aviation section of the Reconstruction Finance Corporatión.