Memorandum by the Chief of the Division of the American Republics (Bonsal) to the Under Secretary of State (Welles)
Mr. Welles: Dr. García Arias, of the Argentine Embassy, came in this morning and drew my attention to the attached article headed “Ban on shipments to Argentina is on” in the New York Times of this morning. The article emphasizes the fact that there is discrimination between Argentina and Chile, with the latter being favored.
Dr. García Arias expressed the opinion that articles of this nature produce a most unfortunate effect in Argentina, particularly at this time when Admiral Sueyro and General Lapez59 are explaining to Argentine officials and others the attitude of the United States. It was Dr. García Arias’ suggestion that at one of your press conferences you refer to this article and state that the isolated examples therein described could in no sense be considered representative of United States policy.
Dr. García Arias and I then discussed the entire situation of Argentine-United States relations in a general way without arriving at any very novel conclusions.
I am aware that our policy toward Argentina has been given the most careful consideration. It is therefore with some diffidence that I express the view that there are only two effective policies open to us: (a) economic cooperation on the same basis as with other American republics, and (b) economic warfare. A policy which merely places Argentina in a somewhat less favorable position than the other republics in the distribution of the limited amount of export materials which we can spare is one which will merely cause irritation without, in my opinion, producing any favorable effect upon Argentina’s foreign policy. On the other hand, the attitude which we have taken regarding military matériel is perfectly sound and [Page 335]realistic; it places Argentina at a real disadvantage in relation to Brazil and should exert a considerable leverage on military, naval, and political circles.