835.796/301
The Chargé in Argentina (Reed) to the Secretary of State
[Received October 1.]
Sir: With reference to the Embassy’s telegram no. 1792 of September 16, 5 p.m., and the Department’s telegram no. 1423 of September 22, 9 p.m.,26 I have the honor to report certain information relative to the resumption of operations by Servicios Aéreos Condor.
Contrary to information previously obtained and reported in the Embassy’s aforementioned telegram no. 1792 of September 16, there was no inaugural southbound service from Rio to Buenos Aires on September 16. However, a Brazilian Junkers Ju–52 plane which accompanied the plane bringing General Justo to Buenos Aires on September 12 was used to make the first northbound trip from here to Rio de Janeiro on September 17. The first Condor southbound plane from Rio, a four-motored Focke-Wulf, arrived here yesterday afternoon with 24 passengers and returned to Rio today with one passenger. The plane arrived at and departed from the “Moron” airport (regularly used by Pan American Airways System) instead of using the former Condor field at Quilmes. About a week ago the Director of Civil Aeronautics, Dr. Bosch, asked the local Pan American [Page 449] Airways office if Condor could use the American company’s ground facilities, which request was refused.
The Focke-Wulf plane was refueled from drums which bore the markings of Intava and West India, both Standard Oil subsidiaries. However, Intava states that it has not supplied any gasoline to Condor in drums for a long time, and that these drums were either from old emergency stocks which Condor formerly maintained at interior points in Argentina, or else Condor obtained empty drums in the market and filled them from its underground tanks at Quilmes.
Intava estimates that Condor had from 10,000 to 15,000 liters of 87 octane gasoline in its Quilmes tanks when service was suspended last December, but part of this was used up in getting the four Condor planes back to Brazil.
There is also a good probability that the 7,400 liters of gasoline requested from Intava by the Brazilian Air Attaché, and referred to in my telegrams 1623 of August 24,6 p.m., and 1815 of September 19, 11 a.m.,27 will be turned over to Condor. These transactions involve the replenishment of gasoline used by three Brazilian planes for their return trips to Brazil, and such quantities would have been ample to carry them all the way to Rio de Janeiro. However, if the present Condor service refuels at Porto Alegre northbound, the 7,400 liters will probably allow six to eight trips from Buenos Aires to Porto Alegre.
Nevertheless, this Embassy believes that it would be difficult to refuse permission to Intava to deliver the 7,400 liters, since the request came not from Condor but from the Brazilian Military Air Attaché, and with payment to be made by the Brazilian Ministry of Aeronautics. In the words of Intava, it “represents a business deal between our interests and a friendly power.”
Apart from any Intava gasoline stocks which Condor has been able to accumulate at Quilmes, there are recent reports to the effect that Condor has been obtaining gasoline from the official Argentine petroleum company Y.P.F. The Military Attaché of this Embassy advises that a Y.P.F. truck visited the Quilmes airport on September 10 and stayed for 40 minutes, presumably to fill one or more underground tanks. There have been other reports to the effect that previous deliveries were also made by Y.P.F. The Brazilian Air Attaché intimated to Mr. Petrognani of Intava that Dr. Laspiur, the present Condor general manager in Argentina, had approached Y.P.F. on the matter of gasoline supplies, although the results of such negotiations are not known. Dr. Laspiur is also a lawyer and is understood to have as a partner the legal adviser to Y.P.F., so it is quite possible that he made such an approach.
[Page 450]The Embassy’s report no. 1340 of September 928 gave the text of the Argentine decree authorizing Condor to resume service to Argentina. In the confidential section of this report mention was made of certain “conditions and obligations” which are to be complied with by the end of this year. Dr. Ernesto Pueyrredon, managing director of the domestic airline Aeroposta Argentina, recently told a member of the Embassy staff that in addition to the two major conditions referred to in our report (formation of a joint Argentine-Brazilian airline, and sale to the Argentine army of the Condor shops and ground installations at Quilmes) it was his understanding that Condor also is to furnish proof to the Argentine Government that it is now a purely Brazilian company, and that it will relinquish any future plans to extend its line to Chile. (Dr. Pueyrredon also said that each Condor plane returning to Rio over the past several months carried out some extra equipment, which actually belonged to Aeroposta instead of Condor.)
The Department’s telegram no. 1423 of September 22 indicates the possibility that Condor will be removed from the Proclaimed List after the arrival in Rio de Janeiro of Messrs. Royce and Duncan,29 which incidentally brings up the question of the Condor personnel in Argentina. This matter was discussed in detail in the Embassy’s strictly confidential despatch no. 5225 of May 28, which also requested the Department’s view on the matter. During his latest visit to Buenos Aires in August, the president of Condor, Dr. Ribeiro Dantas, stated that all non-Argentine personnel in his local administrative staff had been discharged and that while there were a few Germans still employed at the Quilmes airport, these would be replaced “as soon as possible”—at any rate they would pass from the employ of Condor as soon as the Argentine army took over the Quilmes shops.
The Embassy’s above mentioned despatch no. 5225 of May 28 raised some doubt as to four employees in the administrative section: …
[Here follows report that two of the employees had been discharged, one sent on a mission to Chile for Condor, and that information available on the fourth was inadequate to warrant his inclusion on the Proclaimed List.]
Reverting to the matter of gasoline supplies for Condor, it will be recalled that Y.P.F. officials have informed the Embassy on several occasions that the company would not sell to firms on the Proclaimed List. However, for reasons outlined below, we have not discussed the Condor matter with Y.P.F. at this time.
In the first place, Y.P.F. would probably justify its action (assuming that it is really making deliveries) on the grounds that Condor [Page 451] is now a Brazilian company. Also, there is not much use in making an issue of its dealings with Condor at this time if the latter is to be removed from the Proclaimed List in the near future—Y.P.F. would only think that we were trying to save the business for Intava.
Until the Condor matter is definitely clarified, the Embassy also hesitates to threaten Y.P.F. with non-delivery of materials from the U.S. Such a move on our part would end immediately the negotiations now being conducted relative to Argentine petroleum for Uruguay and Paraguay, involving the delivery of production equipment to Y.P.F. Furthermore, if Washington continues to refuse export permits on ethyl fluid for Argentina (see Embassy’s airgram A–196 of September 16, 4 p.m.), it is quite possible that Pan American Airways System itself will have to ask Y.P.F. for gasoline. Whether Y.P.F. would be willing to supply is open to some doubt, especially if we force them to stop selling to Condor.
It is also apparent that the Brazilian Government is anxious for the new service to continue operating, and that the Argentine Government will be disposed to cooperate, at least until the end of the year when the present Condor decree expires.
Although the Department, in its telegram 1423 of September 22, indicates that it does not look with favor on the resumption of Condor service to Buenos Aires, or the provision of gasoline in this connection, the fact is that the line is already operating and probably will obtain its future gasoline supplies from Y.P.F. This is an unfavorable reflection on the effectiveness of our Proclaimed List. If Condor is delisted, the Embassy does not see how the company could be prevented from obtaining gasoline. If it is kept on the list, it is believed that the factors outlined in the preceding paragraphs should be considered before we attempt to persuade Y.P.F. not to make any further gasoline sales to this company.
Respectfully yours,