The Under Secretary of State (Stettinius) to the Ambassador in Argentina (Armour)
266. The steps which the Argentine Government has taken since the breaking of relations with the Axis including the suspension of telecommunications and the severance of financial and commercial transactions with the Axis, have all been considered helpful and viewed favorably. On the other hand, failure of the Argentine Government thus far to take other effective and thorough measures to supplement the break in relations has heightened speculation as to the real intent of that Government.
The specific points which raise a doubt as to the sincerity of the Argentine Government include:
- The failure of the Argentine Government to take action in regard to a long list of spies and saboteurs submitted more than a year ago [Page 250] and the continued presence in the Argentine Government of individuals and groups known to have been closely associated with Axis activities.
- The continued operation of the German Embassy even in its present restricted capacity and the failure to intern German and Japanese officials or to establish controls over dangerous German and Japanese non-officials; also the leniency being shown toward diplomats of Axis satellites.
- The appearance of the newspaper El Federal, as referred to in your no. 369 of February 8.51
- The failure to intervene, vest or supervise commercial and financial institutions with records of support for Axis espionage and subversive activity.
- The apparent willingness of the Argentine Government to promise that the tanker Buenos Aires will not be used in any way to cooperate with the other American Republics in return for German safe conduct.
- The continued operation of clandestine radios in the Argentine.
The allegations that Argentina was forced into breaking relations through concern over possible pressure may well have caused added resentment against the United States on the part of officials of the Argentine Government. In view of these circumstances the Department considers it preferable at this stage to follow the first alternative suggested in your 354, February 7, 8 p.m.,52 and await developments rather than to negotiate with the Argentine Government on a bargaining basis.
The Department is forced to the conclusion that the Argentine Government is very far from having actively initiated the sort of house-cleaning which is essential if this Government and the other American Republics are to conclude that Argentina is sincerely on our side. If no further energetic action is forthcoming, the break of relations can only be considered a subterfuge. It does not seem to the Department desirable to enter into any such broad negotiation as that proposed in your 354 of February 7, since performance on our part would very likely be met with lip-service and decrees but not compliance and cooperation on the part of the present Argentine authorities. Therefore, this Government plans to adopt an attitude of watchful waiting, without prejudice to continually presenting its position to the Argentine Government without, however, putting the matter on a bargaining basis for the present. You will continue to make clear to the Argentine authorities the action which is expected of them. As soon as Ambassador Escobar has presented his credentials to President [Page 251] Roosevelt, arrangements will be made for a series of meetings with appropriate officials of the Department at which the situation can be taken up in detail with the Ambassador.
In the event that the Argentine Government moves forward along desirable lines, there are a certain number of measures which will be open to us and which might be encouraging to our friends in Argentina. These measures include the following.
- Removal from special list of blocked nationals of the Banco de la Nación and Banco de la Provincia.
- Return to our former policy of supplying spare parts and maintenance equipment for the Argentine Navy.
- The release of certain critical materials bought and paid for by Argentine firms and in storage.
- The reconsideration of Argentine petroleum equipment requirements.
Other possibilities will doubtless occur to you. It would be the Department’s plan to take any or all of these measures, on recommendations from you, as and if the Argentine situation develops favorably without, however, engaging in any bargaining.
The Department wishes to take this opportunity of expressing to you and your staff its profound satisfaction with the manner in which you have handled this situation in the past and its confidence that through a continued firm presentation of this Government’s point of view favorable results can be achieved.
- Not printed. The new paper was immediately characterized as an ultra-nationalist journal (835.911/275).↩
- Not printed; the first alternative suggested in this telegram was to await developments, and the second, to offer Argentina critical materials in return for the vesting of certain firms and the cessation of contractual relations between the government and intervened firms (840.51 Frozen Credits 35/336).↩