Foreign Relations of the United States: Diplomatic Papers, 1945, The American Republics, Volume IX

740.35112 RP/8–1445: Telegram

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

Buenos Aires, August 14, 1945—9 p.m.
[Received August 15—5:44 a.m.]

1860. ReDeptels [753], June 23, 6 p.m. and 1051, August 8, 8 p.m. I recommend that German external assets in Argentina be vested immediately by ACC (Allied Control Commission). Arguments in favor ACC vesting are:

1. It will supplement and render more effective Argentine replacement program which has been dilatory and largely ineffectual despite my persistent prodding. In fact, only real advance made has been that two German banks and all Axis insurance companies are now in process of liquidation and sale of merchandise owned by several German firms within next 2 weeks has been announced in local newspapers.

2. If Argentine replacement program is fully completed blocked assets should aggregate at least 600 million pesos, which sum would be greatly in excess of all Argentine claims and should not be left in their exclusive control, therefore ACC should vest now in order to acquire title before these assets are disposed of by Argentine authorities. A majority of firms now intervened will clearly come within definition of German external assets.

3. Colonel Olano advises that decree is now being prepared which will vest in Argentine Govt, title to realty of German firms. I think it desirable that legal title to German external assets in Argentina be vested in name of ACC before Argentina herself vests title.

4. ReEmbtel 1763, Aug. 4, 9 p.m.⁴³ On August 4 when I complained to Foreign Minister regarding procrastination in replacement program and was informed that program would be accelerated, I took advantage of occasion to intimate that ACC vesting was imminent. Argentines therefore are aware that this action is contemplated.

5. ACC vesting would assist in preventing reacquisition of firms by former German owners.

6. ACC vesting should minimize suits for redress in Argentine courts.

7. By ACC vesting action Argentine Govt, will be confronted with three-power approach, rather than unilateral action by U.S.

Arguments against ACC vesting are:

1. It is questionable whether ACC vesting of external German assets would touch German internal assets in Argentina or the assets of Argentines and other persons whose activities have been inimical to our war effort.

2. Argentines are hypersensitive to alleged encroachment on their sovereignty.

3. Argentina may claim discrimination inasmuch as technically she is co-belligerent, and such action against Argentina exclusively in Western Hemisphere might be considered discriminatory.

4. Argentina has enacted decrees for nationalization or Argentinization of Axis firms and has evolved control techniques which she may argue comply in form with requirements of Mexico Resolutions.

5. Argentina may allege that ACC vesting contradicts terms of international commitments embodied in paragraph 3, Resolution XVIII, Mexico Conference.⁴⁴

6. One risk to be incurred if Argentina should be antagonized by ACC vesting is possibility of failure to cooperate in Safehaven⁴⁵ undertaking.

Arguments in favor of ACC vesting outweigh negative arguments, inasmuch as I am not satisfied that Argentine replacement program will fulfill its avowed objective under present administration whose good faith is indeed questionable. Furthermore, ACC vesting at this time may forestall or offset vesting by Argentina. It should bring to a head issues involved, strengthen ACC legal position regarding ownership of Axis assets, and serve to reemphasize by action of Three Powers concerned dissatisfaction with ineffective tactics of present Argentine Govt.

I therefore recommend following action be taken with utmost expedition:

1. ACC vest in itself all external German assets in Argentina.

2. ACC appoint commission composed of Ambassadors of U.S., Great Britain, and France, or their representatives to act for it in respect all such vested assets.

3. That notes to Argentine FonOff declare aforementioned commission will collaborate with Argentine control always bearing in mind commitment to achieve Argentinization. It is considered necessary that this collaboration be specifically promised in order to avoid breakdown of such cooperation as is being received from Argentine Govt. Argentina should also be advised that sales of property will be made only to acceptable Argentine nationals. Argentina should be further requested to continue liquidation of inimical internal assets.

4. ACC local commission be authorized to employ such experts as might be necessary to cooperate with local authorities in respect to each vested firm or enterprise for protection of ACC interests therein.

5. Expenses incurred in this program to be first charged against assets of vested German concerns.

6. Argentina be assured she will be accorded position preferred creditor in respect such claims as she may have against Germany and for control expenses.

Dept. may wish to consider desirability of having vesting decree refer to all German external assets in other American Republics instead of applying it exclusively to Argentina. If this can be done without causing delay my position would be strengthened in dealing with Argentine Govt, as their possible contention of discrimination could be thus minimized.

In this whole business I would appreciate receiving Dept.’s views on what further steps are available to us in event Argentina should prove recalcitrant and decline to recognize vesting decree of ACC.

Will Dept. please repeat above telegram to Embassies at Paris, London, and to Moscow for Pauley.

Braden

43. Not printed.
44. Under terms of paragraph 3, the American Republics agreed that their rights in vested, affected, seized, or intervened property would remain in status quo awaiting final decisions of the individual American Governments. For text of paragraph, see Pan American Union, Final Act of the Inter-American Conference on Problems of War and Peace, Mexico City, February–March, 1945 (Washington, 1945), p. 56.
45. For documentation on the Safehaven policy of the United States, see Foreign Relations, 1944, vol. ii, pp. 213 ff. and ibid., 1945, vol. ii, pp. 852 ff.