835.61311/12–947
Memorandum of Conversation, by the Assistant Secretary of State for American Republic Affairs (Armour)
| Participants: | Mr. J. C. van Essche—Belgian Food Commission |
| Mr. Pierre Jaspar—Belgian Economic Mission | |
| Mr. Armour—A–A | |
| Mr. Tewksbury—RPA |
Mr. van Essche has just returned from a visit to Buenos Aires and called at the suggestion of Dr. Fitzgerald of the IEFC. Mr. van Essche had numerous interviews with Mr. Miguel Miranda and discussed with him the possibility of obtaining wheat for shipment to Belgium. He stated that, during his conversations in Buenos Aires, Mr. Miranda would not reduce the price of wheat below sixty pesos a quintal (roughly $4.88 f.a.s. Buenos Aires).
Mr. van Essche said that Miranda is definitely upset at Argentina’s inability to continue to receive dollar payment for British purchases. He apparently recognizes, however, that this will not be possible unless through purchases under the European Recovery Program, He also realizes that he will probably be forced to accept a lower price for wheat—possibly approximately the Chicago price—if he is to receive dollar payments for shipments to Europe under the European Recovery Program. Mr. van Essche is of the opinion that Miranda has about reached the point where he will accept this condition.
According to Mr. van Essche, Miranda insists that he must have coal or petroleum in order to move crops to seaboard. He attempted to obtain guarantees for the shipment of these products from Belgium in return for cereals. In addition to coal and petroleum, Miranda says that he needs tinplate, agricultural equipment, railway equipment, etc. He recognizes, however, that it will not be possible to get railway equipment soon enough to assist in any early movement of [Page 314] crops. Miranda bitterly attacks the United States and blames it not only for Argentina’s inability to get materials and equipment which it needs, but also claims that the enormous increase of cereal production in the United States has been due to the withholding of equipment for Argentina, with a resultant decline of production in Argentina. He also complains that the United States has grossly overcharged Argentina for equipment which it has purchased. In fact, Miranda lays most of the blame for any Argentine difficulties on the United States.
I asked Mr. van Essche if he thought there was any possibility of Argentina coming into the IEFC, and Mr. van Essche replied that he doubted if Argentina would do so. I pointed out that there would certainly be difficulty in using Economic Recovery Program funds for the purchase of Argentine cereals if Argentina attempted to charge the present high prices. Mr. van Essche said that he was convinced that Miranda recognized this point and that this was undoubtedly one of the factors which was bringing him to realize that there must be a sharp reduction in price for the new crop which will soon be coming on to the market. He said that Mr. Miranda is thoroughly aware of the world cereal situation both as to needs and as to availabilities.
Mr. van Essche said that Mr. Miranda brought out one interesting point in his price discussions. He recognized that Argentine wheat prices were well above those in the United States, but claimed that corn prices were approximately the same, possibly slightly lower. He then quoted United States’ meat prices and explained that there was no justification for United States prices to be ten or fifteen times as high as Argentine prices. He said that the British should pay more for their meat.
Mr. van Essche was of the opinion that there should be centralized purchasing for each of those products needed in connection with the European Recovery Program. He felt that, if purchasing were undertaken by individual nations, buying might become competitive and prejudicial to the interests of all.
Mr. van Essche then took the opportunity to emphasize the seriousness of the proposal to reduce the bread ration to Belgium during the winter months. The proposal has been made, due to the difficulty in obtaining wheat shipments, that Belgium reduce the bread ration from 300 to 250 calories. He explained that the Communists were already issuing propaganda to the effect that the United States would default on grain shipments and that, as a result, bread rations would have to be decreased. He felt that any reduction in bread rations prior to the March elections would mean substantial gains by the Communists. Mr. van Essche is most anxious that the IEFC allocations [Page 315] covering shipments from the US and Canada be adequate to provide the ration of 250 calories and that Belgium be allocated sufficient amounts from Argentina or other sources to maintain a ration of 300 calories. If necessary, Belgium is prepared to pay the $5.00 price to Argentina for the difference between 250 and 300 calories. Mr. van Essche said that a Russian Mission is now in Belgium attempting to purchase machinery and equipment but that he is confident that his Government will not make any arrangements which do not provide for grain in return.