811.20 Defense (M) 24801
The Department of State to the British Embassy
The Department has received the Memorandum of the British Embassy of June 16, 194185 which outlines the program of purchases by the United Kingdom in the Argentine for the twelve months beginning September 3, 1941.[Page 370]
The Department, on June 23, 1941, telegraphed the American Embassy at Buenos Aires86 that the Federal Loan Agency, in addition to its previous offer to acquire the entire production of Argentine tungsten, was prepared to make an offer to buy certain other products of the Argentine. These products included glycerine, beryl ore, mica, vanadium, antimony, manganese, fluorspar, tin, beryllium oxide, hides and skins, and wool. The offer as to each of these products was substantially in identical form, being to acquire a specified amount of the product, the amount to be approximately the estimated exportable surplus in each instance, with a provision for an option to the Federal Loan Agency to acquire any amounts available for export in excess of the stipulated quantities. As to each product, the proposed agreement would require the Argentine Government to prohibit all exports except to the United States or other American republics having systems of export control paralleling that of the United States. The export to the United Kingdom was also made an exception in the case of hides and skins in view of the fact that hides and skins were listed in the Embassy’s Memorandum of June 16 as being within the program of purchases of the United Kingdom.
Zinc and lead were treated as in a special category since the entire production is in the hands of a subsidiary of the St. Joseph Lead Company, an American corporation. Quebracho was also treated in a different manner. The telegram submitted two alternative suggestions. The first was to limit the Argentine and Paraguayan production to 164,000 tons for the year 1941, of which 20,000 tons would go to the United Kingdom; 109,000 tons to the United States; 10,000 tons to Argentina and other American republics; and 25,000 tons to the Japanese. The other alternative was that the Federal Loan Agency would agree to buy 129,000 tons of the exportable surplus of quebracho for two years as a part of an agreement which would provide for a complete export embargo of this product except to the United Kingdom, the United States, and the other American republics having export control systems parallel to that of the United States.
The telegram suggested that an attempt be made to reach an immediate solution as to tungsten. The telegram also included the details of the proposed program of purchases by the United Kingdom for the twelve months beginning September 3, 1941, pointed out that the British and American programs necessarily dovetailed, and suggested there be consultation with the British Ambassador at Buenos Aires with a view of presenting the two buying programs at the same time and developing such a course of action as might foster the conclusion of the agreement suggested in the telegram. It was also suggested [Page 371] that the American Ambassador call attention once more to the deep interest of the United States in developing an international basis of cooperative action in the handling of the difficult surplus problems relating to cotton and wheat87 and that it was hoped that it would be possible to arrive at a definite understanding as to the cooperative handling of these problems.