740.00112A European War 1939/11741
Draft Memorandum by the American Embassy in Argentina to the Argentine Ministry for Foreign Affairs56
The Government of the United States has carefully considered the memorandum of the Ministry of Foreign Affairs and Worship dated May 8, 1942, which refers to two aide-mémoires, of the Embassy of the United States, both dated April 9, 1942, concerning financial remittances from the Cervecería Argentina Quilmes and the Banco Hipotecario Franco-Argentino, to occupied France, and concerning the release of blocked German funds for the benefit of the “Inag” Fábricas Reunidas de Utiles Sanitarios.
With respect to the remittances of the Cervecería Argentina Quilmes and the Banco Hipotecario Franco-Argentino, the aforementioned memorandum appears to assume that it was necessary to make these payments in some form, and after enumerating various possible methods of transfers, it states that the most advantageous form was found to be that which was followed, viz., to arrange for credits in France to be compensated for by an equivalence in Argentine pesos deposited in blocked accounts in this country. The memorandum adds that these blocked pesos may be released only for certain enumerated purposes.
It would appear that, as viewed from any angle, these operations represent facilities to occupied France which could benefit the German authorities, for not only do the payee companies in France receive funds and does the French Bank receive assets in Argentina against which notes may be issued, but also the pesos in Argentina, while initially blocked, may be released for various purposes. The Government of the United States, therefore, continues to consider that these transactions are inconsistent with Resolution V of the Rio de Janeiro Conference, in which all of the American Republics, including Argentina, agreed to recommend the immediate adoption of “any additional measures necessary to cut off for the duration of the present Hemispheric emergency all commercial and financial intercourse, direct or indirect, between the Western Hemisphere and the nations signatory to the Tripartite Pact57 and the territories dominated by them.”
In regard to the operation whereby the “Inag” Fábricas Reunidas de Utiles Sanitarios, a subsidiary of the Siemens Company of Germany, was enabled to repay a loan to the German bank, the Banco Alemán Transatlántico, and to increase its capital in Argentina, the [Page 471] Government of the United States takes the view that this transaction was inconsistent with Resolution V of the Rio de Janeiro Conference for at least three reasons: (1) it permitted a payment from a blocked fund to a German bank whose interests are admittedly closely identified with those of the aggressor nations and whose liquid resources are by the transaction increased; (2) it permitted the German firm’s subsidiary to increase its credit in Argentina by decreasing its banking indebtedness; and (3) by providing for an increase of capital of a German firm, it increased in a corresponding amount the resources in an American country of a company under the control of the German authorities. The Department of State feels that there can be no doubt that all three of these aspects of the operation in question are inconsistent with what the twenty-one American Republics had in mind when they agreed upon Resolution V of the Rio de Janeiro Conference.
As to the considerations in the memorandum with respect to the Argentine national interests involved in the development of industrial enterprises in the country, the Government of the United States has consistently given support to those various inter-American activities serving to facilitate and encourage the development of industry within the republics of the continent. It is believed, however, that Resolution V of the Rio de Janeiro Conference did not contemplate that the interests of national industries would be placed ahead of the interests of continental defense in fulfilling the obligations contracted in that Resolution.
In view of the foregoing considerations, the Government of the United States is confident that the Argentine Government will agree that financial operations of these kinds are not in harmony with the inter-American resolution aforementioned.