740.35112 RP/11–446
The Ambassador in Argentina (Messersmith) to the Secretary of State
No. 1140
[Received November 13.]
Sir: … I have to refer specifically to Section 1 of the Department’s top secret Instruction No. 252 of September 25, 1946. Supplementing the information already transmitted in the above mentioned despatches, the following information is submitted as a preliminary reply to Section 1 entitled “Business Enterprises” of the Department’s Instruction No. 252.
. . . . . . . . . . . . . .
For the purpose of clarity and for the convenience of the Department, the questions in Section 1 of the Department’s Instruction No. 252 of September 25, 1946 are hereunder repeated with the appropriate information following.
“1. a) What progress has been made toward the liquidation or sale of these firms since June 21, 1946?”
[Here follows a list of firms liquidated or in the process of liquidation, 22 in condition for immediate liquidation, 16 in condition for transfer to the State or to private interests, and 21 yet to be transferred in this manner. The great majority were or would be referred to the Central Bank.]
“b) The Argentine Government has since July 30, 1946 had under study twenty-six additional concerns, including eight Staudt subsidiaries. It is not known whether a decision has been taken by the Argentine Government in respect of this group. In this connection, [Page 330] the Department will be pleased to receive the list of enterprises which was prepared by the Argentine Government and from which the twenty-six names in this group were selected by the Embassy.”
[Here follows a list of 26 firms indicated as intervened or under investigation.]
“c) There are the following eleven firms which are connected with, or subsidiaries of, the enterprises listed in paragraphs a) and b) above and which are not listed in either of these groups. Is it correct to assume that these eleven firms are included in the two preceding groups?”
Such an assumption is not correct as will be seen from the following report of status of these firms:
[Here follows a list of 11 firms with status indicated.]
“d) There are the following eighteen additional firms reported to be owned from Germany or Japan which the Argentine Government apparently does not have under consideration”.
The status of the following eighteen firms is as indicated.
[Here follows list of 18 firms with status indicated.]
In respect of all of the above enterprises where it is indicated that intervention or investigation is to be lifted, as well as those on which definite action is not clear, discussions between the Embassy and the Ministry of Foreign Affairs are proceeding actively and in detail. The Embassy, of course, is urging action of a positive character in all cases where it is possible to submit evidence establishing enemy ownership or control.
“2. It will be appreciated if the Embassy will indicate which, if any, of the enterprises referred to in paragraph 1, sections c), d), and e) it no longer regards as spearhead together with a brief summary of the facts on which the Embassy’s conclusion is based.”
While it is recognized that some of the above firms have been considered as spearhead in the view of the Department and the Embassy on the basis of information heretofore available, no reorganization thereof into new categories has been made by the Embassy. However, various important considerations make it impractical to press complete liquidation of all of these firms; in fact, in the case of some of them there is not adequate information available to press for any action, and although the Argentine government has made independent investigations on its own, supporting evidence has not been found.
“3. Does the Argentine Government intend to proceed on a basis of liquidation or selling of the entire enterprise or only the interests of the undesirable owners thereof?”
From data supplied the Embassy by the Ministry of Foreign Affairs, it would appear that in firms where the enemy interest represents [Page 331] less than fifty percent of the capital, controls will be lifted upon payment into a block account in the Central Bank of the sum representing the enemy interest. In most instances where the enemy interest exceeds fifty percent of the capital, the Embassy is of the opinion that the firm will be liquidated, sold, or nationalized in accordance with its importance to the national economy.
“If the latter:
(a) Will all owners resident in Germany be regarded as undesirable?”
On the basis of a resolution passed by the Junta in the case of Curt Berger y Cía. in which the interests of Argentine nationals were not frozen, it is presumed that mere residence in Germany does not, in itself, denominate a person as undesirable, particularly if that person is an Argentine national. It is believed that this attitude is necessary under existing Argentine law.
“b) Is the Argentine Government disposed to consider certain Argentine nationals (including naturalized Argentines Freude, Martens, and Staudt and native-born Delfino) as undesirable?”
There are indications that certain Argentine nationals may be considered as not in all respects desirable by the local authorities, but in the absence of legal basis for revocation of citizenship or conviction for offenses against the state, the government is helpless with respect to seizure of their property or their elimination from local enterprises. This situation in the Argentine does not differ in any way from the situation in the United States and in others of the American countries, and in fact, in all countries.
With respect to Ludwig Freude, an Argentine citizen of German origin, a despatch is going forward to the Department covering the Freude situation, and therefore no complete reference thereto will be made here except to state that the Argentine government cannot take any action in the case of Freude or his enterprises on the basis of the information which has been given it by the British and ourselves or which it has been able itself to secure. The Argentine government after a full investigation has issued a decree to the effect that Freude has not committed any acts against the Argentine state or the United Nations. The denaturalization proceedings which had been started against him at the instance of this Embassy by the Argentine government are about to come to a close, and I understand that within a relatively short time, and perhaps by the time this despatch reaches the Department, the court will confirm the naturalization of Mr. Freude. So far as the commercial interests of Mr. Freude are concerned, they are his and of persons against whom there is no information, and there is, therefore, no basis on which the Argentine government could [Page 332] take any action with regard to his business concerns, and the Embassy is therefore not in a position to press any action.
With respect to Staudt and the Staudt interests, I would refer to my despatch No. 990 of October 14, 194638 which presents the considered views of this Embassy. In view of the fact that Staudt is personally distasteful and is a man of highhanded methods, the Argentine government made every effort in order to find evidence on which action could be taken with respect to Staudt and his firms. It was, however, as indicated in the above mentioned despatch, impossible to find any evidence on which Staudt could be denaturalized or action taken against his firms beyond the taking possession by the Argentine government of the 570 shares of the over-all Staudt company which are owned by the three sisters in Germany and therefore an established German interest.
With respect to Martens, he is an Argentine citizen born in Germany who is supposed to have taken over some espionage work, but it is the considered opinion of the Embassy that we have not furnished adequate information to the Argentine government on which denaturalization proceedings could take place and my last information from the Argentine authorities is that they have not found adequate information on which denaturalization procedures could be prosecuted.
So far as Mr. Delfino is concerned, he is a native born Argentine citizen, and as such, the question of denaturalization does not arise. If action were to be taken against him and his property, it would be necessary to prove acts by Mr. Delfino against the Argentine state and the United Nations, and the evidence which our government and the British government have presented is not sufficient as a basis for such proceedings, and the evidence which the Argentine government on the basis of very careful investigations has, is not sufficient. It may be taken, I think, for granted, therefore, that the Argentine government can take no action against Mr. Delfino and could not be expected to do so.
Respectfully yours,
- Not printed, but see letter of October 30 from Buenos Aires, supra.↩