811.20 Defense (Wool)/293a: Telegram

The Secretary of State to the Ambassador in Uruguay (Dawson)

226. The Federal Loan Agency is prepared to enter into an agreement with the Uruguayan Government whereby, upon the establishment of an export control system prohibiting the export of wool and hides from Uruguay except to the United States, to other American republics having systems of export control satisfactory to the Government of the United States, and to the British Empire, the Federal Loan Agency will agree to purchase the entire exportable surpluses of wool and hides in Uruguay other than that purchased by United States private trade, the other American republics and the British Empire. The agreement would take the form of a commitment by the [Page 591] Loan Agency to buy a fixed amount of the products in question at prices slightly under the current market price. These fixed maxima would be in amounts corresponding to the total exports of the products in question for the preceding year. The obligation of the Loan Agency would thus, in effect, be to take the entire exportable surplus not required by other approved purchasers. As you are no doubt aware, negotiations are now under way for the purchase by the Federal Loan Agency of various Argentine products,58 including hides and wool, under an agreement to be in substantially the form suggested above.

Prices would have to be established for each of the various grades of wool and hides, and there would probably be certain grades which would have to be excluded from the agreement for quality reasons.

You are requested to consult with the appropriate Uruguayan authorities and to inquire whether such an agreement is acceptable in principle to them. If it is, the Federal Loan Agency will designate some one in Montevideo or will send some one there to collaborate with you in negotiating the agreement.

  1. See vol. vi, section under Argentina entitled “Negotiations for an agreement on the purchase of exportable surpluses of strategic materials from Argentina.”