Office of the Historian

835.6363/11–745

Memorandum by the Assistant Secretary of State (Braden)2

[Washington,] November 7, 1945.

Mr. Tewksbury3 informed me over the telephone this morning that 180,000 tons of fuel oil had been delivered by us to Argentina under our fuel oil-fats and oils agreement, but Argentine deliveries in return were 30 percent under their commitment. However, the authorities there assured the Embassy that they would get off before the end of the year 43,000 tons of linseed oil, 45,000 tons of flaxseed, 33,000 tons of cake.

On this basis, Argentina by the end of the year would be 50 percent behind in deliveries.

It is Tewksbury’s opinion that the fuel situation is more responsible than lack of tires.

In this latter connection Chester Davis4 has just concluded an arrangement whereby we will supply an additional 20,000 tons of fuel oil and the officials claim that this will enable Argentina to fulfill its agreements. If additional fuel oil is supplied, as has now been announced, it will improve the supply of linseed and other products. In this connection, the American oil companies have already made arrangements to bring in 160,000 tons of crude oil for refining in Argentina during the months of November and December. Moreover, the YPF5 has contracted with Mexico for 500,000 tons. Of course, tankers must be supplied for the transportation of this oil, but apparently this can be done.

A further impetus to the release of 20,000 tons of flaxseed and 125,000 tons of cake (55,000 sold direct to liberated areas and balance to USCC6) will result from removal of tax of 25 pesos on oil-seed cake.

In Tewksbury’s opinion were we to negotiate a lower price under our contract, it would simply stop shipments. These prices are regarded as fair by Chester Davis. In other words, a lower price would be harmful and a higher price would have no effect in increasing production.

Spruille Braden
  1. Addressed to Assistant Secretary of State (Clayton), and to Ellis A. Briggs and George H. Butler of the Office of American Republic Affairs.↩
  2. Howard Tewksbury, Counselor of Embassy for Economic Affairs, Buenos Aires.↩
  3. Chester E. Davis, Member of Advisory Board, Office of War Mobilization and Reconversion; formerly a Special Representative of the Foreign Economic Administration.↩
  4. Yacimientos Petroliferos Fiscales, Argentine state petroleum company.↩
  5. United States Commercial Company.↩