835.50/136a: Telegram
The Secretary of State to the Ambassador in Argentina ( Armour )
39. This telegram constitutes an interim indication of discussions within the Department and with the British Ambassador52 regarding policy with respect to Argentina.
On the economic side the Department has considered three principal phases of economic action:
- (1)
- A complete cessation of economic intercourse between Argentina and the United States, the United Kingdom, Brazil, and as many other American republics as possible. In considering such a course the Department has discussed fully with representatives of the supply and shipping agencies the effect of cessation of imports from Argentina by the participating countries. It is clear that the most difficult problems would lie in connection with wheat and meat. There is plenty of wheat in the world, but much of it is immobilized in western Canada because of lack of internal railway facilities. The reorganization of international movements of wheat would also occasion great strains on United Nations shipping facilities, notably in the case of supplying Brazil. The loss of Argentine meat for any protracted period would necessitate violent shifts in British consumption from beef to pork even with drastic drains upon United States supplies, both of which as a practical matter seem out of the question. Fats and oils problems would be serious but less difficult, while cessation of procurement of other items such as hides and quebracho could be handled by consumer rationing.
- The Department and the supplying and shipping agencies have
concluded that in considering the possibility of foregoing
Argentina as a source of supply the basic factors are the
following: Argentine supplies could probably be foregone for a
period of from three to six months subject to the following
conditions and exceptions:
- (a)
- that a complete resumption of Argentine shipments could be counted on at the end of that period;
- (b)
- that we would not be faced during the period with the supply of any substantial part of areas to be liberated from the enemy; and
- (c)
- that in the light of probable military demands for shipping there is considerable doubt that shipping could be made available to supply wheat to Brazil. For a period of from six months to a year the practical difficulties of the drastic rationing in the United States required to provide supplies for other areas, especially the U. K., and of the changes necessary in the British meat ration could probably not be surmounted, even though on a purely statistical basis this would be theoretically possible subject to the same conditions and exceptions. The opening of liberated area demand would bring such pressure on wheat and fats and oils that the supplies could not be provided if Argentina were not available as a source.
- (2)
- A complete cessation of economic relations between the United States and Argentina involving a discontinuance of all our procurement, embargo on all exports to Argentina, and a general Treasury freeze not accompanied by a liberal license policy. To such a measure might be added collaboration of Venezuela and other oil producing countries in withholding supplies of petroleum. Possibly also War Shipping Administration could hold up coal imports from South Africa.
- (3)
- A general freeze of Argentine assets accompanied soon after by license arrangements which would permit commercial trade at least. To this might be added the oil and coal measures mentioned in (2) above.
On the political side, the Department has considered the moral and psychological effects of the various economic measures mentioned above and the advisability of a strong statement of our position coupled with parallel statements by the British and other nations; the expulsion of Argentina from membership on the Committee for Political Defense; and the expulsion of Argentina from other inter-American economic organizations such as the Inter-American Financial and Economic Advisory Committee.
I have discussed all of these matters at considerable length with the British Ambassador, the Department has furnished him with considerable detailed information, and he is awaiting a definitive reply from London.
I am thinking at the present time of the possibility of making a scathing denunciation of Argentina’s course with special reference [Page 290] to the Bolivian situation,53 and I have hoped that the British Government would make a somewhat similar declaration simultaneously.
I would appreciate your urgent comments a) on the possibilities of various types of action outlined in this message and b) on what might be included in the statement.