The Secretary of State to the British Ambassador ( Halifax )
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10. Consistently with the desire of the Government of the United States to consult fully with the British Government prior to taking new action with relation to Argentina, this Government has resorted to various channels to bring its views with regard to a possible next step fully to the attention of the British Government.
On August 9 the Acting Secretary of State met with Sir [Mr.] Richard Law, Sir Ronald Campbell, and Mr. Robert Henry Hadow, [Page 166] and stated that while the Government of the United States fully appreciates the British desire to obtain adequate meat supplies, it trusts that the negotiations with Argentina can be so handled as to reinforce our common political position. The Acting Secretary urged that the negotiations be prolonged and that any contract which may eventually be concluded be for a short term. Mr. Stettinius also emphasized the hope of this Government that the meat purchase may be treated as an isolated commercial transaction dictated by special war needs and, therefore, entirely separate from fundamental political and economic policies. In the same meeting, Mr. Stettinius informed the representatives of the British Government that we are considering a cut in our purchases from Argentina by from 40% to 60% and that serious consideration is being given to the freezing of Argentine funds.
On August 2 and again on August 11, Ambassador Winant was instructed to inform the Foreign Secretary of our views both with respect to the meat contract and with respect to possible reduction of purchases and freezing of Argentine funds.
In connection with the proposed reduction of purchases, Ambassador Winant was instructed to express our hope that the British Government may be prepared to take parallel action, thus eliminating all purchases of Argentine products not essential for the satisfaction of immediate needs.
Ambassador Winant has now informed the Department of State that he has received a letter from Mr. Eden dated August 25,3 in which the Foreign Secretary states that the British Government is fully alive to the issue raised by our messages relative to the meat contract. In his letter, Mr. Eden also recognizes the reasons why we propose to discontinue non-essential purchases at the present time and states that he is consulting the Ministry of Supply with respect to possible reduction of British purchases. With respect to the matter of freezing Argentine funds, the Foreign Secretary assumes that the action of our Treasury Department in recently prohibiting the export of two shipments of Argentine gold is tantamount to the freezing of funds and adds that the British Government has already applied “similar restrictions to Argentina as a neutral”.
It has been the opinion of this Government that these economic steps constitute a necessary implementation of the nonrecognition policy. In view of Mr. Eden’s recognition of the reasons which have induced that opinion, we are considering taking the indicated action at an early date. However, having in mind the thought expressed by Mr. Eden, we hope so far as possible to avoid undue publicity.