835.796/249
The Ambassador in Argentina (Armour) to the Secretary of State
[Received April 6.]
Sir: With reference to the Department’s strictly confidential telegram no. 428 of March 26, 10 p.m., I have the honor to report two recent conversations with the Brazilian Ambassador, Dr. Rodrigues Alves, regarding Argentine efforts to obtain the Lati planes now in Brazil, and to outline further considerations with respect to the Corporación Sudamericana de Servicios Aéreos.
On March 23 the Brazilian Ambassador told me of a recent talk he had had with Dr. Castells, Undersecretary of Interior, who remarked that Dr. Castillo’s elder son, Ramón, had considerable influence with his father; in fact, the Acting President found it difficult to refuse his son anything. Dr. Castells then referred to the desire of Ramón Castillo Jr. to acquire the Lati planes now in Brazil, and said that the planes were needed by Argentina for use on the airline from Buenos Aires to Esquel (now being operated by the army air service), and to maintain communications with isolated army posts along the Chilean frontier.
After his talk with Dr. Castells, the Brazilian Ambassador was approached by Ramón Castillo Jr. for the purpose of enlisting the Ambassador’s cooperation in arranging for the purchase of these Lati planes. Dr. Rodrigues Alves replied that he thought all of these planes, with perhaps one exception, were of flimsy wooden construction and hardly suitable for the Argentine army. However, Castillo Jr. still seemed anxious to acquire them, and said that he was also interested in getting five or six transport planes from the United States.
The Brazilian Ambassador said young Castillo had told him that “a member of the British Embassy” (he could not remember the name Castillo had given him, and was unable to recognize it afterwards on consulting the diplomatic list) had told him that if Argentina would grant nonbelligerent treatment to Great Britain, the British would then use their influence to get these American planes for Argentina. Dr. Rodrigues Alves was very insistent that he had clearly understood young Castillo on this point. However, I have since had the opportunity to discuss this with the British Embassy, which states that the report is “ridiculous”.
On March 241 had another talk with the Brazilian Ambassador, and asked him specifically if he thought Argentina intended to use the Lati planes, if they secured them, for a trans-Atlantic service. He replied in the negative, saying that young Castillo had assured him the [Page 434] planes were intended for army use and on the Esquel line. He also said that the local Fiat company had endeavored to obtain the Lati planes by means of an ante-dated purchase agreement, which Brazil refused to recognize.
The Brazilian Ambassador at first seemed favorably disposed to recommending the sale of the Lati planes to Argentina; that they did not amount to much anyway and the Argentine Government had after all permitted the return of the Condor5 planes to Brazil (this point had also been stressed by young Castillo). Furthermore, some reciprocal gesture by Brazil, negotiated by the son of Dr. Castillo, would be highly appreciated by the Acting President.
With regard to the American planes desired by young Castillo, Dr. Rodrigues Alves admitted that it would be inconsistent under our Government’s present policy to furnish such equipment to Argentina, but suggested an ingenious solution whereby we might furnish such planes to Brazil and Brazil in turn could release the Lati planes to Argentina.
I said that I thought our Government would be against any such arrangement permitting the release of the Lati planes to Argentina, adding that I felt sure the Ambassador would agree that if our Government scrupulously adhered, as it was doing, to the plan to furnish all available supplies to Brazil and other republics which had broken relations with or declared war on the Axis powers, it would seem inconsistent for Brazil on its part to furnish planes to Argentina, even though these were old Lati planes which happened to be within their country.
Dr. Rodrigues Alves expressed hearty concurrence with this point of view and said he would present it in this light to Dr. Aranha.
The above information furnished by the Brazilian Ambassador raises several points for speculation. Bearing in mind that young Castillo is affiliated with the Corporación Sudamericana de Servicios Aéreos, some of the parts and motors from these Lati planes unquestionably would have been used to replace worn out equipment on the company’s present fleet of three Italian “Macchi” planes. Present operations are from Buenos Aires to Montevideo and to Asunción, but there is a possibility of the line being extended to Rio de Janeiro by the Corporación itself or by a new Argentine company.
In such event, this extension might be a logical link for the rumored airline between Buenos Aires and Europe. According to the local press, one of the matters to be discussed during the forthcoming visit of the Spanish trade mission is the possibility of an airline connecting [Page 435] Spain and Argentina. Col. Francisco Iglesias, the Spanish aviator who made an extensive flight in 1929, arrived in Buenos Aires on March 24, on his way back to Spain from Lima, where he represented his country at the Fourth Centenary of the Discovery of the Amazon Region. Pampero of March 24 comments as follows: “Although his visit does not have an official character, it would not be surprising if he took advantage of the opportunity to consider the possibility of establishing the projected Madrid-Buenos Aires airline.”
The interest of Castillo Jr. in acquiring American transport planes is also significant. There is a rumor to the effect that he would like to merge the Corporación with Aerovias Argentinas, the latter company being recently organized to obtain concessions and operate new air routes in Argentina. As reported in the Embassy’s confidential despatch no. 3542 of November 21, 1941,6 this company has a strong board of directors, and while it had been understood that most of them were partisans of ex-President Justo, it is just possible that its directors would be willing to cooperate with the Castillo faction, especially if they could make better progress. In this event, the American planes would presumably be intended for domestic and possibly international routes of the rumored Corporación Aerovias consolidation. It is also reported that the Corporación intends to change its name in the near future.
With specific reference to the Corporación, there is transmitted herewith a translation of a report6 prepared by Sr. Antonio Biedma, the former manager of this company, mentioned in the Embassy’s confidential despatch no. 4383 of March 11. Sr. Biedma is highly regarded in local aviation circles, and he is believed to be a trustworthy source of information. His report offers further evidence that the company is directly controlled by Fiat and Ala Littoria, and that the Acting President’s son, as well as his law partner, are closely affiliated with the company.
As mentioned in the Embassy’s aforementioned despatch no. 4383, there have been several factors which have restrained the Embassy from recommending the Corporación for the Proclaimed List. To these may be added the possibility of a lawsuit against Intava in the event it is no longer able to supply gasoline, and the disruption of the pooling arrangement between the Corporación and the Uruguayan company Causa7 on the Buenos Aires–Montevideo daily service.
The refusal of Brazil to release the Lati planes materially reduces the threat of expansion by the Corporación. The only other [Page 436] possibilities apparent at this time for establishing new airlines from Argentina to Brazil and Europe are: 1) utilization of the Air France planes for which Argentina has been negotiating, which would first require considerable overhauling of the planes and the probable employment of former Air France pilots, and 2) the establishment of the proposed Spanish-Argentine line, with planes furnished by Spain, which presumably could be discouraged by withholding fuel.
Briefly, the inclusion of the Corporación on the Proclaimed List would probably cause a cessation in operations, provided Intava stopped fuel supplies. However, due to the considerations already mentioned, such action on our part might well cause unpleasant repercussions.
The above factors have been outlined in some detail in order to give the Department full background information, and in the event that future developments require quick action with respect to placing the Corporación on the Proclaimed List.
Respectfully yours,