The Acting Secretary of State to the Chargé in Argentina ( Reed )
448. Department’s 379 of April 12 and Embassy’s 732 of April 13. With further reference to proposal to simplify Certificate of Necessity procedure it is decided to defer action for a brief period of perhaps 30 days. This will enable the Department and FEA to discuss the whole problem with Ambassador Braden59 before his departure for Argentina and will afford sufficient time to obtain McClintock’s views upon his return. In the meantime FEA is processing licenses which [Page 535] have appropriate Certificates of Necessity subject to supply availability.
Aside from the specific question of simplifying Certificate of Necessity procedure, Embassy’s 732 and 777 of April 20,60 raise other questions requiring comment:
1. Shipping—Backlog of cargo on April 16 as based on the applications for freight space submitted to War Shipping Administration, which does not necessarily mean that the cargo is actually ready for shipment, amounted to 78,278 tons, consisting of 44,014 tons of newsprint, 30,700 tons of coal, and 3,564 tons of all other cargo.
The figure shown for newsprint is high, since it does not represent newsprint which has been manufactured and awaiting shipment. The realistic backlog of unshipped newsprint is 23,200 tons which represents the unshipped balance of the quota for the first quarter and the quota for the second quarter. Department will transmit backlog information regularly by monthly airgram.
With respect to the furnishing of US shipping for the movement of supplies to Argentina, this is unnecessary in view of the above small amount of cargo awaiting shipment to Argentina. In addition, Flota representatives here for many months have been complaining of the scarcity of available south-bound cargo.
2. Proclaimed List—All shipments are checked against the Proclaimed List whether they go out under general or individual license. No change in this procedure is contemplated even though Certificate of Necessity system is simplified.
3. Export of non-essential products—The fear of Argentine officials that simplifying Certificate of Necessity System may result in flood of non-essential imports is not warranted in view of experience in other American Republics following simplified decentralized export control. Inform McClintock.
[For text of Agreement between the United States and Argentina regarding fuel and vegetable oil, effected by exchange of notes signed at Buenos Aires, May 9, 1945, see Department of State Executive Agreement Series No. 495, or 59 Stat. (pt. 2) 1799. The Agreement provided for a supply from Argentina of vegetable oil cake, cattle feed for the dairy herds of Belgium, the Netherlands, and Denmark, and for vegetable oils for the United Nations. In return, fuel oil was to be sent to Argentina from the Caribbean area on a “heat equivalent basis.”]