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

No. 2365

Sir: …

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In the Department’s telegram no. 322 of April 19, 11 a.m., 1947,74 I am informed that my despatch no. 2264 of April 11, 1947 had not yet been received in the Department. The telegram further states that the rejection by the Maritime Commission of the transfer of registry of the three C–V’s to the Dodero Company was motivated by the Commission’s policy that no vessels of this type be sold foreign and that requests for similar transfer of five vessels to Sweden had recently been rejected. The telegram further states that the present position of the Commission is that of the approximately 18 vessels of this category, none will be sold abroad since when reconverted they would be C–3’s which are in short supply for American operators.

I am pleased to note from this telegram that the Department of State formally has taken the position that it has no objection to the sale of these vessels. The telegram further states, however, that our statutes give full authority to the Maritime Commission to withhold the sale of vessels to foreigners if this may be in the interest of United States shipping. It is also stated that no evidence of discrimination as between foreign applicants exists and that should any of these vessels [Page 264] be made available for sale to foreigners, the Department will request that the application of the Dodero Company be reconsidered. The telegram further states that the Ship Sales Act provides that in considering preferences between non-citizens, the Commission should consider the extent to which the countries seeking vessels incurred losses during the war effort. The observation is made that the Argentine fleet is now far above the pre-war level and it has received proportionately a greater share of desirable types of tonnage than any other country. It is further observed that the representatives of several governments have informally called the attention of the Department to the fact that the Argentine has received favorable treatment.

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In the case of these particular vessels, it is my understanding that the Navy has indicated that it does not need them and that the three vessels in question in which the Dodero Company is interested were sold by the Navy to the Newport News Shipbuilding Company to be scrapped for, I believe, around $170,000.00 each. The Newport News Shipbuilding Company, the maintenance of the facilities of which is of importance to our Navy and defense, considered the possibility of reconverting these vessels for merchant marine purposes and offered them to American shipping firms. According to the information which I have, which seems to be correct, no American firm expressed an interest in these vessels and it was after this expression of lack of interest by American firms that the Newport News Shipbuilding Company sold them to the Dodero Company at a price of $1,750,000.00 each, which the Dodero Company is prepared to pay in cash. It would seem, therefore, if the foregoing facts are correct, that the vessels were offered to United States shipping companies which were not interested.

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From the standpoint of ocean-going traffic, therefore, the Argentine has some 39 vessels of over 1,500 tons, not including tankers, and it would not seem that such a merchant fleet is out of proportion with the legitimate aspirations of the Argentine economy. It is not believed that it would be the policy of our Government to endeavor to limit the Argentine merchant marine to its pre-war tonnage and even if there should be such a desire on our part, there would be no way in which we could control this, for orders can be placed freely by her in shipyards in the United States or abroad, and unfortunately most of the orders would be placed in foreign shipyards as the cost of construction in our own yards is relatively so high.

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It is a very real hope of this Embassy that the Department will be able to secure the reconsideration by the Maritime Commission of [Page 265] this refusal to sell three vessels to the Dodero firm, and it is very desirable that this be done in the very near future.

Respectfully yours,

George S. Messersmith
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