611.3531/1617: Telegram

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

95. With reference to the Department’s confidential telegram No. 33, January 27, 7 p.m., in view of the Cabinet crisis here and resignations of Ministers of Foreign Affairs and Finance, it is difficult to secure information from responsible officials with regard to the Government’s policies on a question of this importance. However, in a talk which the Commercial Attaché15 has had with high officials of the Central Bank, they stated with regard to the possible sale to Spain of Argentine corn and other foodstuffs that conversations are now being held to that end but no conclusions have been reached. He [They?] explained that on other occasions cotton and wheat have been sold to Spain in minor quantities and payment had been effected at least on one occasion by the cancellation of bonds held by the Spanish Government. In another case service on foreign obligations owed by Argentina were cancelled in the Spanish Treasury.

When questioned as to the rumor of payment for corn sent to Spain being made in blocked sterling, he [they?] immediately replied that he [they?] had no indication of such a plan and that Argentina would hardly be interested in receiving more blocked sterling as she already had too much.

The same officials added that the matter of blocked sterling was one which they felt Argentina could not solve alone and that eventually it must be solved through a triangular arrangement in which the United States was directly or indirectly involved.

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I have not yet been able to approach the British Embassy in this matter—the Ambassador is away—but expect to do so in the next few days and will telegraph any information secured.

  1. Thomas L. Hughes.