833.51/986: Telegram

The Secretary of State to the Ambassador in Uruguay ( Dawson )

283. Your 364, May 13, 3 p.m. For Spaeth from the Under Secretary. I am grateful for your frank expression of views and agree heartily in general with them. I realize that Guani and the Uruguayan Government have taken a strong position of leadership and are of important assistance to us every day. I also know that the proximity of Argentina makes for constant comparison of treatment accorded the two countries.

You realize, of course, that the existence of the Argentine merchant marine which is able to sail without danger while the few Uruguayan [Page 719] vessels35 have been tied up has imposed a great burden on United States controlled shipping to take care of Uruguay. Also it is a fact that there is a greater proportion of strategic materials to be lifted at Buenos Aires than at Montevideo. Finally the Argentine Central Bank has done an excellent piece of work in justifying its material requirements, while the reports and information of the Uruguayan Government has frequently been deficient in ways which have led the War Production Board to question them. Moreover, the existence of a very large number of outstanding export licenses has hampered the inauguration of the effects of the special Argentine export control measures with which you are very familiar. This last problem is now partially being overcome by the reexamination by BEW36 of the old licenses in view of the shipping situation.

The actions being taken or contemplated with respect to Uruguay’s economic situation include:

Definite arrangements with War Shipping Administration so that each United States controlled vessel will bring important cargo to Uruguay and lift a reasonable tonnage of strategic and critical items. You have been extensively informed about the plans. The Department hopes that at least as much will be lifted from Montevideo as Buenos Aires in spite of the relative proportions and importance of the available cargoes, and expects that large inroads will be made in present accumulations. It must, of course, be emphasized that the broad shipping picture is very grave and security problems are real. The Department will send you full instructions regarding the shipping situation in the near future.
Every attention is being paid to the proportions of allocations. For example, the recent exchange of telegrams regarding tin plate was due entirely to a desire to justify as large an allocation as possible in the face of the really direct war requirements of Argentina. The day of justifying allocations on purely political grounds is over, as Army, Navy, and WPB37 are faced with ever tightening material situations.
We have established working relations with the British and Canadians whereby our political and economic policies with respect to export controls and allocations are jointly considered. In particular, we have requested the diversion of important amounts of British coal from Buenos Aires to Montevideo.
In connection with the plans for deliveries of petroleum for general consumption and for bunkers we are proposing to maintain a large proportion of Uruguay’s usual requirements, whereas virtually no United States controlled tankers will be dispatched to Argentina in view of Argentine local production and tankers. Moreover, we are now dispatching two tankers to Montevideo via the West Coast [Page 720] in order to build up bunker stocks to high proportions relative to those of Buenos Aires.
We have recently completed the very important Rione project38 agreements, making available very tight equipment at a time when our productive capacity for electrical apparatus is extremely overtaxed.
We have indicated that we are prepared to give immediate consideration to any reasonable projects for Export-Import Bank credits—the only limiting factor being the supply of critical equipment and materials. Also we are prepared to give any necessary financial assistance in connection with the elimination or reorganization of pro-Axis firms.
In purchases of strategic materials—especially those such as hides and certain oilseeds which it will probably not be able to ship from the Plate in the amounts available—emphasis is being placed on purchases of all the Uruguayan stocks in preference to Argentine supplies. In this connection, this Government is pressing the British consistently to follow parallel policies.

  1. For correspondence regarding the Axis ships requisitioned and immobilized by Uruguay, see pp. 703 ff.
  2. Board of Economic Warfare.
  3. War Production Board.
  4. Rio Negro Hydroelectric project. For correspondence regarding this project, see pp. 731 ff.