835.6363/12–547: Telegram

The Acting Secretary of State to the Embassy in Argentina

us urgent

1147. Dept concerned at implications contained urtel 1416 Dec 5 re demands on oil companies and agrees your approach. Despite Bramuglia’s assurances your 1417 Dec 5 we feel prompt interview shd be had with Perón in order to obtain his personal confirmation Bramulia’s statements. In past Bramuglia with complete sincerity has indicated that drastic action wd not be taken insurance legislation example and has been unable prevent final action sponsored by Miranda.

Drastic action proposed wd have far reaching repercussions in economic relations with Arg. For your conf info serious criticisms in foreign relations committees Cong re Arg grain policies. Action of character outlined wd merely aggravate situation and present new obstacles to obtaining Cong authorization for off shore purchases in dollars for ERP.

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You shd explain to Perón that while US cannot object to principle of nationalizing petroleum industry, if due compensation provided, the proposed precipitate action does not afford reasonable opportunity petroleum companies make adequate studies their problems and present plan to Govt for negotiation mutually agreeable settlement. Action this character wd completely offset Perón’s previous statements to you re encouragement foreign investments Arg.