611.3531/1626: Telegram

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

111. Department’s telegram No. 33, January 27, 7 p.m. and Embassy’s telegram 95, January 31, 7 p.m. In a conversation with the Commercial Counselor of the British Embassy21 yesterday regarding report that the British Government has agreed to permit Spain to buy Argentine corn, payment to be made in blocked sterling in London, the former official stated that as far as the British Embassy here is aware no consideration has been given to such a proposal. The British [Page 398] Commercial Counselor stated, however, that the British Government had agreed to deliver to Spain 50,000 tons of wheat from their stocks purchased in Argentina. Although he did not explain the manner in which this transaction is being consummated, it seems reasonable to assume that the purchase of wheat by the British Government from which this quantity is to be taken merely increased the amount of blocked sterling in London to the credit of the Argentine Government, and that in effect the shipment of the 50,000 tons of wheat to Spain is paid with blocked sterling.

The British Commercial Counselor seemed to feel that this transaction may have been the basis for the press reports.

  1. Cecil B. Jerram.