811.20 Defense (M)/1934: Telegram

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

240. Reference is made to the Embassy’s No. 415 of May 9 and previous. Metals Reserve Company advises that it will buy the entire Argentine tungsten production at a price in excess of the original Bolivian price and authorizes a bid of $19.00 per unit and a 2-year contract for the entire production. This price is not the absolute top limit but naturally it is hoped that you will be able to make the agreement at the $19.00 price.

Such a contract would necessarily involve placing tungsten on the export control list and an agreement to issue no licenses except to the United States and other American republics which have adopted an export control system in collaboration with the United States Government.

With reference to the suggestion that the agreement for the purchase of tungsten be directly connected with the granting of licenses by the United States, the Department makes the following comments:

The export control authorities have shown the greatest liberality in granting licenses for the export of United States products to the Argentine. Even where such products are urgently needed here, as for example copper, the United States has gone out of its way to accommodate the needs of the Argentine economy. Specifically, licenses have been granted for the export of rubber, tin, and machine tools. In the face of growing demands for these commodities and materials in our own industries, licenses have been granted with great freedom for chemicals, petroleum, tires, and iron and steel. Only where there is a grave shortage, as in the case of aluminum, has this Government felt compelled to refuse export licenses in cases where the Argentine Government has expressed an interest.

With respect to the suggestion in your no. 338 of April 18 that zinc and tin plate be licensed, the Department is advised that a quota of 72,000 tons of tin plate for the last 8 months of 1941 has been granted. It is presumed that this arrangement will meet adequately the requirements of Argentina for this material as described in your despatch no. 2327 of April 24.83 As to zinc, it would be most difficult to grant licenses in any substantial quantity. At the moment the demand for refined zinc is overwhelming. Small lots in as low as 18 ton quantities are being parceled out, and these are almost entirely for defense uses. The only way in which zinc could be made available [Page 365] to Argentina would be through the cancellation of private contracts by use of the priorities authority.

In spite of these difficulties the Department is willing to make every effort to make available to the Argentine such materials as it needs urgently if this can be done without serious impairment of the national defense effort. It is accordingly suggested that you review this matter with the Argentine governmental authorities and attempt to get their agreement to the sale of the tungsten and the establishment of export control on tungsten as suggested above merely on the basis of the assurance that the United States Government will continue as in the past to give freely and cooperatively assistance in granting licenses for the export of materials needed by the Argentine. If it develops during the course of these conversations that there are specific commodities for which a license is urgently desired, you are requested to telegraph the details as to these requests to the Department.

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