835.24/2580: Telegram
The Ambassador in Argentina (Armour) to the Secretary of State
[Received 11:06 p.m.]
590. Certificate of necessity system referred to in Department’s 355, February 28, 8 p.m.,93 is administered by Central Bank under decree of National Government and subject to joint directives issued by Ministries of Treasury and Agriculture. Hence official acceptance of certificates would constitute a form of recognition. However, it is not believed that unacknowledged receipt of certificates for next [Page 411] week or 10 days would cause embarrassment in this regard since all Embassy relations with Central Bank are at standstill. Therefore Embassy recommends that existing situation not be disturbed for the moment.
Embassy requests Department carefully consider dangers inherent in abandonment of certificate of necessity system. Unless substituted plan permits advantages already won by consignee control to continue, efficacy of economic warfare in Argentina will be seriously threatened and our postwar position further complicated if control is entirely concentrated in Washington. Consignee control has rechanneled imports and these are now in hands of responsible firms upon whom U. S. must depend in postwar for its major outlets in this country. Furthermore great majority of firms who are now receiving merchandise are exercising high degree of control over secondary distribution. All of these advantages can be easily lost if present cooperative joint FEA–Embassy controls are discontinued since complete transfer to Washington would eliminate day to day contact with trade and irreplaceable current information derived therefrom.
Therefore, the Embassy submits following recommendations: If Department decides on non-recognition, certificate of necessity system for Argentina be abolished. Exporters to make application direct to FEA. FEA to license only (a) materials unquestionably in free supply; (b) materials in short or critical supply consigned to industries engaged in war effort or if needed for public health and safety, FEA to confine its consignee control only to proclaimed and confidential lists.
FEA to forward daily by airmail to Embassy (since speedier action not necessary in case of Argentina) a list covering its proposed approvals. List to be dated and numbered numerically and each item to also be numbered numerically, starting daily with no. 1. A copy of each corresponding export license application to be attached to list.
Embassy would then cable only its disapprovals thus “List 9 disapproved: Items 2, 5, 35, 40”. Full reasons for rejection would then be sent by airmail but in meantime all other licenses could be issued.
This system would permit Embassy to keep trade in established channels and maintain its present consignee control which has proven itself as most efficient economic warfare weapon possessed by this mission.
Basis for classification of materials in short or critical supply must be agreed upon if plan is to be successful and if Embassy and FEA are to implement it harmoniously. This classification cannot be determined on a day to day basis since political situation requires a consistent rather than a fluctuating policy. It is suggested that present method used by Embassy be continued, namely that materials defined [Page 412] as critical by August 26 policy94 are following: Controlled materials, Class B products containing controlled materials, Groups 1 and 2 of WPB95 substitutions and supply list, and such other products as may be determined by FEA. Quotas for the foregoing critical materials could be set up in Washington and licenses permissible under August 26 policy charged against them but these quotas should not be made public in any form.
FEA representative concurs in foregoing.
- Not printed; in it the Department recommended the continuance of acceptance of certificates of necessity for certain commodities from the United States providing this did not constitute recognition (835.24/2580a). For details of the certificate of necessity system, see despatch 15003, June 9, from Buenos Aires, p. 416.↩
- For statement of this policy, see Foreign Relations, 1943, vol. v, p. 492.↩
- War Production Board.↩