Foreign Relations of the United States: Diplomatic Papers, 1942, The American Republics, Volume V

840.51 Frozen Credits/8477: Telegram

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

Washington, December 11, 1942—10 p.m.

1933. Your 2382, November 25; Department’s 1846, November 28. Treasury action denying new credits to the Banco de la Provincia and the Banco de la Nación is based on information which reveals that these institutions have engaged in the following activities of benefit to the Axis:

(a) Banco de la Provincia.

1. Has received deposits for and executed payments to official and non-official agents of Germany, Italy and Japan.

2. Has performed numerous services for German, Italian and Japanese banks in Argentina, such as receiving accounts and making remittances on behalf of such banks and extending facilities to their clients in cooperation with the Axis banks.

3. Has made numerous remittances to Axis and Axis-occupied territory.

4. Has made collections for, extended credit to, and rendered numerous other services for Proclaimed List nationals.

5. Has refused to sign an undertaking to grant no new credits to Proclaimed List persons and to eliminate existing drafts and overdrafts of such persons. The proposed undertaking was submitted to all the banks in Argentina in connection with a plan for extension of credit by the Export-Import Bank.

6. Has for over a year regularly published a full-page advertisement in extreme pro-Axis propaganda publication.

7. The Embassy has reported that the President of the institution has clearly demonstrated his Nazi sympathies and has been associated in business transactions with known pro-Axis individuals.

(b) Banco de la Nación.

1. Has transferred funds to Axis territory, notably remittances to Italy on behalf of the Italian Foreign Exchange Institute and remittances of reichsmarks to the Deutsche Verrechungskasse.

2. Has executed payments to Italian and German officials in Argentina.

3. Has transferred funds to neutral countries, particularly Switzerland and Portugal, for the account of enemy banks.

4. Has transferred funds for Proclaimed List banks and other Proclaimed List nationals.

5. Has extended credit facilities to Proclaimed List firms.

6. Has for over a year regularly published full-page advertisement in extreme pro-Axis propaganda journal.

The foregoing evidence shows clearly that the banks have engaged in widespread activities directly and indirectly beneficial to the Axis nations. It should be pointed out that under these circumstances the United States obviously cannot indirectly increase the economic resources and power of its enemies by furnishing its facilities for the support of such objectionable activities.

You may in your discretion present all or part of the above information to the Central Bank. You may perhaps feel that point no. 5 under the Banco de la Provincia should not be raised since the undertaking in question was submitted by the United States solely in connection with the proposed Export-Import Bank transaction and without any intimation that a refusal to sign would be considered as a reason for applying sanctions against the bank. It is suggested also that before submitting the above information a further check should be made with the Embassy’s files and with the British Embassy for the purpose of securing any additional information which you may wish to present along with the data contained herein.

Hull