840.51 Frozen Credits/6701
The Assistant Secretary of State (Acheson) to the Ambassador in Argentina (Armour)
Dear Norman: I am asking Messrs. Cochran78 and Meltzer to carry this personal letter to you so as to explain certain aspects of the situation here in Washington with respect to Argentina.
As you know, the Treasury Department in a meeting of the Board of Economic Warfare recommended that the freezing controls of this country be applied generally to Argentina. As you also know, this proposal was definitely rejected and there is no intention to have that decision modified. In this connection Mr. Welles feels that it will be desirable to make clear to you one point covered in the instructions79 which Messrs. Cochran and Meltzer are presenting to you personally. In paragraph (2) on page 280 it is stated that firms in the United States or in Argentina who are found to be engaged in cloaking activities should be reported to the Department with a view toward having the United States Treasury apply ad hoc freezing controls to their activities. This does not mean that there would be any general freezing of Argentina but merely refers to the practice which is now being followed regarding the activities of all persons wherever resident who are found to be acting for or on behalf of enemy countries. Persons who are frozen by this manner may engage in transactions in so far as they are subject to the jurisdiction of the United States only pursuant to license.
When Treasury’s proposal was made it was fortunate that Mr. Meltzer was available to the Department in as much as his information and knowledge, resulting to a great extent from his recent trip to Buenos Aires and his work with the Embassy, made it possible to present without delay a reasoned analysis of the Treasury proposal.
Having failed in its efforts to freeze Argentine funds, the Treasury Department then complained about the inadequacy of the information [Page 483]on Argentine financial and commercial matters and strongly urged that at least three Treasury officers be sent to Argentina to study this subject and report directly to Treasury. In dealing with this suggestion it was fortunate that Mr. Meltzer had recently visited the Embassy and could report favorably on the work which it was carrying out.
The Treasury proposal was met by a counter-proposal of the Department to assign Messrs. Cochran and Meltzer temporarily to Buenos Aires for the purpose of assisting the Embassy in preparing the report requested in the Department’s instructions and to work on other matters as explained in my telegram of June 6, 1942.81
I am sure that Messrs. Cochran and Meltzer will do everything in their power to be of maximum assistance to you and the Embassy.