740.35112 RP/7–3145

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

No. 455

Sir: I have the honor to report on the subject of the Argentine Government program for the nationalization of Axis firms. As was reported in despatch no. 17699 of April 4, 1945, Decree no. 7.032/45 of March 31, 1945 is the basic law providing for the nationalization of Axis firms in Argentina. Under the terms of this Decree the disposition of Axis banks and insurance companies is entrusted to the Ministry of Finance, whereas all other Axis firms are subject to the jurisdiction of an Administrative Board under the supervision of Colonel Manuel José Olano.

There is transmitted herewith as enclosure no. 135 a single copy of the official report by Colonel Olano’s administrative committee of the status of his administration as of July 7, 1945, which was recently given to the Embassy by the Argentine authorities. It will be observed that 128 Axis firms, according to this report, are subject to investigation or intervention. Of these firms, only 39 have been subjected to governmental possession or control. This possession has been manifested by decrees revoking the corporate charters of these firms or by such decree and the possession of such firm by a governmental body which manages the affairs of such company. A list of the firms that have been subjected to revocation of their corporate charters in the case of corporations, or revocation of licenses in the case of a limited liability company or partnership, or the control of administrative committees, is transmitted herewith as enclosure no. 2.35

Embassy officials have had many discussions with Colonel Olano and Dr. Carlos A. Adrogué, the attorney for the Administrative Board in charge of the control of Axis firms. Embassy officials have constantly pressed for the total liquidation or forced sale of the Axis firms. Both Colonel Olano and Dr. Adrogué state that the ultimate goal of the Government is to completely eliminate the Axis firms in Argentina by the liquidation of those firms not necessary to Argentina’s economy and by the forced sale of the remaining firms considered essential to Argentina’s economy. The Argentine Government officials entrusted with this program, however, state that at the present time it is necessary to undertake a complete inventory and appraisement of the assets of the firms subject to this control before either liquidating a firm or transferring it to native Argentines at public auction. Recently, upon direct inquiry as to the duration of time necessary for such preliminary investigation, Dr. Adrogué has advised the Embassy of a Resolution [Page 468] passed by the Administrative Board requiring the final disposition to be made of firms subject to Government control within a period of 60 days after the Government has passed decrees specifically subjecting certain firms to the possession and control of an Administrative Board. The Ambassador in his interview with Colonel Perón on June 1, 1945, and again at the interview with the Minister of Foreign Affairs on June 26, 1945, has pressed for the speedy and complete elimination of Axis firms. At both of these interviews the Ambassador was informed that the Argentine Government program would be accelerated. However, to date the situation is as follows.

The Ministry of Finance has liquidated both the German banks, the Banco Germánico de la América del Sud and the Banco Alemán Transatlántico. These banks were liquidated by decrees of June 28, 1945, which by their resolutions provided that the banks be liquidated within a period of 30 days. By July 28, 1945 the doors of both banks were closed. During the 30 days period provided for the liquidation of the German banks, approximately 19,000 accounts out of a total of 26,000 accounts were withdrawn from both banks. All business of the aforesaid German banks has now ceased, although the liquidating committees are still settling the remaining accounts, credits, and debits of the two banks referred to.

The seven German insurance companies listed on page 18 of the Argentine Government report transmitted herewith,36 with the exception of Hosmann y Cía., have also been ordered liquidated by decree. The day following the publication of the decree liquidating these companies, the Embassy received word that Hosmann y Cía. was also subjected to the liquidation decree. Thus, all German owned or controlled insurance companies in Argentina were thereby subjected to the liquidation decree. Embassy officials recently were received by the Minister of Finance, Dr. Ceferino Alonso Irigoyen who is directly in charge of the implementation of the decree liquidating the German insurance companies. In this interview they were advised that all firms will be liquidated and their corporate charters have been revoked, and that all reserves and reinsurance reserves in the country belonging to such firms have been subjected to blocking. Dr. Irigoyen further stated that with the exception of the life insurance portfolio of “La Germano Argentina”, the only Axis insurance firm selling life insurance, and the reinsurance company “El Fenix Sudamericano”, all insurance of the seven German insurance companies will be rescinded and cancelled. The life policies of “La Germano Argentina” will be sold to Argentine companies or a pool of Argentine companies, whereas the reinsurance business of “El Fenix Sudamericano” [Page 469] will be sold to an existing Argentine reinsurance company, probably “Aconcagua”. The Embassy and the British Embassy have been importuned by American, British and Argentine companies for licenses and acquiescence in their writing the Proclaimed List business formerly undertaken by the German insurance firms.

Both this Embassy and the British Embassy fear that if such acquiescence is denied the local Argentine insurance companies might violate the tenets of the Simon Plan. The Department will recall that in 1942 Mr. Simon37 of the British Embassy induced all local Argentine insurance companies to sign an agreement not to accept any Proclaimed List business. If an Argentine company should not be penalized for writing insurance on Proclaimed List firms formerly written by the German companies, both the British and American companies will demand a license to do likewise. The Embassy has not reached its decision on this point, and is submitting the question to the Department by telegram for its decision. Furthermore, if such acquiescence should not be forthcoming, there is a danger that the Argentine Government may form a governmental insurance agency for handling this business.

As is apparent from the attached enclosures, Colonel Olano’s Committee as yet has liquidated no firms, with the exception of Bruttomesso y Cía. and Ignacio Martínez y Cía., both of which are merely minor subsidiaries of Thyssen–Lametal. It has been reported by the Administrative Control Board that two more firms will be completely liquidated this week Carl Zeiss and Agfa, the latter being a subsidiary of I.G. Farbenindustrie. The liquidation of these two firms, according to Colonel Olano, will be accomplished by the sale in lots of their entire stock in trade. As yet Colonel Olano’s committee has taken no action regarding Axis trademarks and patents, although the matter has been discussed at length with Embassy officials. The present policy of the Committee regarding Axis trademarks and patents is to effectively take possession of the rights to the trademarks and patents, pending decision as to the ultimate disposition of these rights.

Since Colonel Olano has taken over the control and supervision of the Argentine Government program for the nationalization of Axis firms in Argentina, Mr. Luis Fiore has been relegated to the position of policy adviser and does not now exercise much authority, although several of his appointees are still on Colonel Olano’s Board. Colonel Olano, although technically under the jurisdiction of the Department of Industry and Commerce, appears to be under the direct orders of [Page 470] Colonel Perón and the Ministry of Foreign Affairs. Colonel Olano and members of his Board continue to be well disposed towards the Embassy officers with whom they deal in matters of consultation and exchange of information. Recently the Board submitted to the Embassy lists of employees of Gruen & Bilfinger S.R.L. and Thyssen-Lametal whom the Board considered Nazi and proposed discharging, and requested the Embassy to add to the list of those to be discharged any further employees the Embassy considered inimical. In the case of Thyssen–Lametal, eighty-three Nazi employees have been discharged after the Embassy added approximately thirty-five additional names of undesirable technicians.

The Embassy in its appraisal of the nationalization program finds that the Argentine Government has been dilatory and that the work accomplished to date amounts to little more than an elaborate type of interventorship. However, as the avowed purpose of the Argentine authorities and the Administrative Board is to completely liquidate or sell the German firms, the Embassy believes it should withhold its opinion as to the efficacy of the program until the expiration of the 60 day period allowed for investigation and ultimate determination as to whether the firms will be sold or liquidated. This period should end in early September, at which time the Embassy should be more fully able to gauge whether the Argentine Government really has the will to fully implement its commitments to liquidate or sell the Axis firms. As stated before, the steps outlined by Colonel Olano’s Committee are as follows:

Intervention, or investigation, or both;
Revocation of corporate charters or licenses of the firms;
Management of the business of Axis firms by a governmental delegated commission;
Vesting of legal title in the Argentine Government;
Sale or liquidation, and blocking of proceeds.

It has been explained to the Embassy officers by the attorney for the Administrative Control Board of Axis firms, that a decree should be issued within the next 10 days vesting legal title in the Argentine Government of all firms presently subject to Administrative Control that own realty. This attorney, Dr. Adrogué, further states that it will not be necessary in his opinion to vest legal title in the Government of those firms which merely own stocks of merchandise as these stocks may be ordered sold merely by Resolution and the firm liquidated by the same method.

[Page 471]

Considering the joint activities of Colonel Olano’s Administrative Board and the Ministry of Finance, the nationalization program in Argentina to date may be summarized as follows:

  • Firms liquidated: 4
    • Banco Alemán Transatlántic
    • Banco Germánico de la América del Sud
    • Ignacio Martínez y Cía.
    • Bruttomesso y Cía.
  • Firms already subjected to liquidation decree and in liquidation now: 7
    • Aachen y Munich
    • El Fenix Sudamericano
    • Hosmann y Cía.
    • La Germano Argentina
    • La International
    • La Mannheim S.A.
    • La Protectora
  • Firms that Government Board alleges will be liquidated within a week: 2
    • Carl Zeiss Argentina
    • Agfa Argentina
  • Firms subject to intervention or investigation: 128
  • Firms actually managed, controlled, or in possession of Argentine Government preliminary to forced sale and intervention: 39

Respectfully yours,

For the Ambassador:
Howard H. Tewksbury

Commercial Attaché
  1. Not printed.
  2. Not printed.
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  4. Walter Simon, Financial Adviser and First Secretary of the British Embassy, Buenos Aires.