740.35112 RP/8–345: Telegram

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

1753. Since passage of decree authorizing liquidation of Axis insurance companies, Minister of Finance has informed Embassy he proposes rescinding all their policies with the exception of life port folio of the only company writing life insurance and cancelling reinsurance contracts of one other company which contracts will be transferred to Argentine companies. Embassy and British mission have been asked whether we would acquiesce in or license Argentine, British, and American companies writing policies for Proclaimed List entities when their present insurance is cancelled. Argentine companies may be tempted to violate Simon plan, [under terms of?] which in 1942 they agreed not to write Proclaimed List insurance. Argentine Govt, may also try to revise govt, insurance plan to insure listed entities that will be without insurance protection. Nevertheless, I strongly believe that we should neither acquiesce in nor allow licenses to Argentine or American companies to write any Proclaimed List insurance as this would be dangerous precedent and would materially weaken prestige of PL (Plain [Proclaimed] List) and our economic objectives in Argentina. In supporting this policy our Govt, and British Govt, must be prepared to list any Argentine insurance company, governmental or otherwise, which writes a policy for a PL entity. We must have British backing in a strong policy and British and American reinsurance companies must agree not to deal with companies that write insurance for listed entities. The only exception to this policy I advocate is that spearhead Axis firms once subjected to absolute control of Argentine liquidating committee, which to date amounts to only 40, should be allowed to be insured by American, British, and Argentine companies, as any payment to them would be automatically blocked. This strong policy may furthermore induce Argentine Govt, to complete control and block more spearhead Axis firms and eventually liquidate them. We have explored all other possible solutions of problem but I believe stern policy is only means of achieving desired ends.

[Page 474]

Unless I am instructed to the contrary, I will proceed with this policy. This matter has been fully discussed with British Embassy, who are telegraphing London sense of the foregoing but without definite recommendation.