740.35112 RP/6–2345: Telegram

The Acting Secretary of State to the Ambassador in Argentina (Braden)

753. Might not Argentines be spurred to positive and speedy action under Replacement Program if they realized that Allied Group Control Council may shortly exert jurisdiction over German external [Page 463] assets in Argentina if title to them has not in accordance with Argentina’s long standing commitments been effectively and permanently transferred to unobjectionable parties? Ambassador Pauley, Head of US Reparations Commission Delegation, has telegraphed from Moscow that German assets in Argentina have been discussed with heads of Brit and Soviet reparations delegations. Both of these indicated that Argentina might well be treated similarly to the European neutrals in this regard. In view of Argentina’s failure to eliminate inimical interests in accordance with her commitments it would be difficult to distinguish her from the neutrals.

Do you consider that at this stage permanent and total extirpation of German spearheads in Argentina would be better accomplished by warning Argentines of foregoing possibility for purpose of activating Replacement Program or through bypassing local controls in favor of ACC?22 One factor against latter is it would reach only concerns owned or controlled from Germany or by German nationals. This would not include all spearheads in Argentina, Staudt for example. Your comments desired.

Reptd to Moscow for Pauley and to Bogotá, Montevideo, Asunción, La Paz, and Caracas for thought as to the effect discreet use of ACC possibility might have on lagging Replacement Programs those countries.

  1. Allied Control Council.