811.20 Defense (M)/1498: Telegram

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

221. Department’s 94, March 10, noon. In compliance with Department’s instructions to discuss with the authorities here the question of obtaining the entire Argentine output of tungsten and the possible establishment by the Government of an organization to cooperate with the Metals Reserve Company, I discussed and left a memorandum on the subject with the Under Secretary for Foreign Affairs. A member of the staff subsequently spoke of the matter with the sub-manager of the Central Bank, Dr. Edmundo Gagneux. Whereas neither official was in a position to make a definite reply, both indicated interest but at the same time expressed serious doubt whether it would be deemed feasible to ensure the export to the United States of Argentina’s entire production through the organization of such a company.

Dr. Gagneux stated that he thought the best and most expeditious way to secure results would be to authorize a commercial concern to enter the market and outbid other buyers.

He expressed the opinion that it should be possible for such a commercial representative to make reasonably long-term contracts with the smaller operators and so gain control of the major portion of this country’s production.

In view of further evidence of efforts on the part of the Japanese to buy Argentine tungsten and the improbability of any early cooperation on the part of the Argentine Government, it is thought that the Metals Reserve Company may wish to proceed forthwith with the [Page 360] first part of the plan, namely, the authorization of Minerales y Metales S. R. L. to make purchases and possibly enter into contracts insuring control of future production.