835.85/87
Memorandum of Conversation, by the Second Secretary of Embassy in Argentina (Gantenbein)69
| Participants: | Admiral Stewart |
| Mr. Hughes70 | |
| Mr. Gantenbein |
Messrs. Hughes and Gantenbein called today by appointment upon Admiral Francisco Stewart for the purpose of discussing various of the pending ship matters. After preliminary remarks, Admiral Stewart was handed a memorandum, a copy of which is attached hereto,71 setting forth the position of the United States with respect to the contemplated payment of 565,000 pesos in free funds to Mr. Isaac Gutman Iterman and to the Organización Comercial e Industrial Financiera Argentina, in which Mr. Iterman has a substantial interest, in connection with the purchase by the Merchant Marine of the three ex-German ships now called the San Martin, Santa Fé and Belgrano. This memorandum had been prepared after Admiral Stewart, during a courtesy visit at the Embassy several days ago, had stated that he was not familiar with the problem involved in these contemplated payments. After glancing at the memorandum, Admiral Stewart said that it was the impression which he gathered at Washington that the Inter-American Financial and Economic Advisory Committee was disposed to modify the exception provided for with respect to paragraph (c) of the Committee’s interpretation of article 5 (d) of the ship plan. However, he recognized that there was no analogy between the present matter and the Rio Colorado case, which Dr. Liaudat of the Central Bank (who is a member of the Merchant Marine board) had previously claimed to be analogous.
Admiral Stewart was told that since Mr. Iterman had a banking business at Santa Fé and presumably loaned the money in question from funds available for investment purposes, it was not seen how he or his financial company could object to accepting in blocked form treasury or other obligations which would be bearing interest and thereby adding to the value of his assets. Admiral Stewart appeared very sympathetic to this consideration and said that it was possible that the Merchant Marine might even make provision for an additional one or two percent interest, which would also be blocked.
[Page 420]Reference was then made to the Delfino payment. Admiral Stewart stated that Dr. Torriani, head of the commercial and consular division of the Foreign Office, is having an investigation made concerning the possibilities of freezing the properties which Sr. Delfino purchased with the amount which had been recently paid to him in free funds (which properties now appear to include 1,500,000 pesos paid for acquiring a part interest in the Hotel Richmond in this city). He said that he would see Dr. Torriani this afternoon and attempt to expedite the completion of the investigation.
At this point Admiral Stewart gave an account of events preceding the payments in question. He stated that it was at first desired to buy these vessels for the purpose of maintaining a military force in Patagonia but that difficulties were encountered in finding available funds. Later, however, arrangements for acquiring the ships (primarily for other purposes) were made by the Ministry of Marine, which signed a contract with Sr. Delfino, apparently without adequately appreciating the factors involved in paying Sr. Delfino in free funds. He added that the matter had been complicated by the fact that Sir David Kelly, the British Ambassador, shortly before the actual payment was made, had gone to Admiral Fincati, the Minister of Marine, and had greatly antagonized Admiral Fincati by intimating that Great Britain might curtail its meat purchases from Argentina if the payment were made to Sr. Delfino, which Admiral Fincati felt was an offence against the national dignity. Admiral Fincati, he said, reported the matter immediately to President Castillo, with the result that there was felt to be no alternative to paying the amount in question. (It is understood that Admiral Stewart described the same incident while in Washington.) However, Admiral Stewart also mentioned that President Castillo felt that the Government had to make the payment inasmuch as it was obligated to do so under the terms of the contract to which the Government was a party and which had been made pursuant to a Government decree.
In reply to an inquiry as to the status of the shipping agreement which had been recently negotiated at Washington, Admiral Stewart commented that although the formal signature of the agreement was awaiting the satisfactory solution of the Delfino matter, it had been arranged in Washington that it would be placed in effect following its initialing and that it was, therefore, in effect now.
In regard to the case of the Esmeralda, Admiral Stewart said that this vessel was still in Pernambuco. There had been some delay, he said, in moving it to Buenos Aires due to the fact that the Merchant Marine feared that the twelve or thirteen Rumanian seamen on the ship, who were previously employed by Mr. Vlasov, might be instigated by Mr. Vlasov to cause difficulties with reference to insurance, [Page 421] and therefore it was the plan of the Merchant Marine to supply the ship with other seamen. Concerning the claims against the ship to be paid in free funds, Admiral Stewart said that it had been definitely decided that these would not be paid until after the ship arrived in Buenos Aires and until after the United States and British Governments had been consulted with respect to the individual claims. When asked, however, whether it would not be necessary to pay the port dues and perhaps the other taxes of the Brazilian Government, Admiral Stewart did not seem to be familiar with the details of the matter. Regarding the list of claims which had been promised to the Embassy by Dr. Liaudat several weeks ago, Admiral Stewart said that this list would be furnished shortly.
Concerning the purchase of bunkers from the Italian Government in connection with the purchase of the sixteen Italian ships, Admiral Stewart said that these funds would be definitely blocked.
When inquiry was made about the Delfino tugboats, which had previously belonged to the Hamburg American Line, Admiral Stewart stated that it was his understanding that there were twelve of these that had been taken over not from Sr. Delfino’s company but through the intermediary of Sr. Delfino as agent of the owners. In any event, he said that the funds had been blocked.