740.35112A/12–2447: Airgram
The Ambassador in Uruguay (Briggs) to the Secretary of State
A–537. Re Department’s secret A–231, October 27, 1947, requesting information concerning status of Uruguayan replacement bill. Draft of bill to provide for liquidation of Axis firms has long been before Uruguayan Congress. It has been referred to Committee on Social Legislation for study and report, but Embassy informed orally that [Page 1053] Committee has no intention of bringing out bill in foreseeable future. (It is well to recall in this connection that in Uruguay the Congress is traditionally—and at present—fully as powerful as the Executive; that is, this program is not one for decision by the Executive alone.)
The interest of our Government in this matter has been repeatedly expressed to Uruguayan officials, including the “Commission on the Intervention of Enemy Firms”, of which Dr. Pratt de María of Foreign Office is a member. While in general sympathetic with objectives of replacement program, those officials have consistently expressed orally opinion that passage of replacement program for Uruguay in form suggested by us is now impossible. Furthermore in confidential legal study by the Foreign Office the conclusion is reached that proposed replacement bill is unconstitutional.
Another factor is undoubtedly pressure brought by the intervened firms. Also, the strong opposition (Herrerista) party has from the outset attacked the bill, and the present administration is seeking a working agreement with the opposition. Hence the administration would be reluctant to press a matter tenaciously opposed and for which there is at present no discernible public demand.
A further factor is Argentina. After observing with interest the course of our negotiations with that country on the replacement program, the United States announcement last May was widely interpreted (or misinterpreted) here in the sense that since we were discontinuing our efforts in the much wider and more important Argentine field, we could not consistently continue to press for action by Uruguay, a country which had collaborated genuinely and effectively on many matters having to do with the war.
Finally the development recently reported by the press that an American firm had entered into a contractual arrangement with Staudt & Company in Buenos Aires has not escaped notice in Montevideo and has a definite bearing on this whole situation.
In short, the Uruguayan Government regards the replacement program as a dead issue. In the opinion of the Embassy further efforts to revive it would have scant prospects of success and would not now be well received.