840.51 Frozen Credits/6784: Telegram

The Ambassador in Argentina (Armour) to the Secretary of State

1146. Embassy’s 1134, June 15, 7 p.m.85 The Ministry of Finance has issued a press release together with three decrees reported in the evening papers implementing Resolution V.

The press release, bearing the caption “measures of economic and financial control resulting from the fifth recommendation of the consulative meeting at Rio de Janeiro,” notes that the “fifth recommendation refers to the cutting off during the present continental emergency of all commercial and financial intercourse between the Western Hemisphere and the nations signatory to the Tripartite Pact and the territories dominated by them as well as suspending commercial and financial activities prejudicial to the welfare of the American Republics.” Later it states that “Doctor Acevedo86 declared that the decrees signed today have been issued in accordance with the fifth recommendation at Rio within the spirit of the Argentine reservation which of course does not affect the scope and efficacy of the control but which strengthens it.” After outlining the contents of the decrees, the press release reports that according to Doctor Acevedo his Ministry is preparing a draft law which will be soon submitted to Congress to enable the adoption of still further measures and in a final paragraph states that the Minister concluded “by saying that in that way the executive power has evidenced its firm purpose of fulfilling within its powers the obligations contracted at Rio concerning everything [Page 485]that pertains to the welfare of the nation or of the other American Republics and to continental solidarity and defense”.

The decrees which are dated today in general give the Ministry of Finance and the Central Bank far-reaching discretionary powers of control although freezing of funds is not specifically provided for. Decree number 122712 signed by the Acting President and seven Ministers authorizes the naming of supervisors or interventors in any enterprise “which belongs to non-American belligerent foreigners or whose activities are in any way connected with non-American foreign belligerent countries or citizens[”]; provides for the recommendation by a commission of penalties and other measures when there are found to be cases deemed inimical to the national or continental interests; and increases the control over the external and internal movement of funds granted the Central Bank in the decree of January 8.

Decree number 122713 signed by the Acting President and the Minister of Finance authorizes the Central Bank to require sworn statements of any persons or firms engaging in any way in transactions abroad as to details of their operations and provides for penalties for false declarations.

Decree number 122714 with the same signatures extends to operations with all non-American countries the control provided by decree number 66230 of June 26, 1940; provides that from 30 days from the date of the decree all parties in the country maintaining in their power assets or open accounts in the names of parties in non-American countries must furnish the Central Bank with a sworn declaration containing pertinent information; gives the Central Bank broad powers to require the transfer of such assets to authorized banks or on institutions and provides for penalties.

The texts with translations of the above will be transmitted in Wednesday’s airmail pouch.87

Tonight Grumbach invited an officer of the Embassy to call at his home and explained these various measures. He indicated that the Central Bank had drawn them up and that while it had hoped that it might be able to obtain 80% of them from the Government it secured all that it asked for. While the measures do not differentiate between the non-American belligerent countries, he volunteered the comment that this was owing to political consideration but that it was the intention to apply them only against the Axis countries. When asked for an indication as to the policy in other respects that would be applied in utilizing these powers he said that he thought that Prebisch might be disposed to furnish the Embassy with confidential information on the point tomorrow. However, he emphasized the difficulties that had confronted the Central Bank in the administration [Page 486]of foreign funds control in the past because of what was felt to be insufficient powers and expressed the belief that now it had broad powers with which it could go ahead.

I believe that it would be highly desirable if the fullest publicity possible could be given to these measures and if there could be thus encouraged the efforts that are being made here to offer greater collaboration.

  1. Not printed.
  2. Carlos Alberto Acevedo, Argentine Minister of Finance.
  3. Despatch No. 5481, June 17, not printed.