835.24/2–1848: Airgram

The Secretary of State to the Embassy in the United Kingdom

secret

A–179. Reference your A–418 February 18.1

Our present information is that total shipments US military vehicles Antwerp to Argentina amounted to 583 tanks and 797 jeeps between March 5 and November 17, 1947 (Brussels tel. 2014 Dec. 192). So far unable confirm arrival all tanks Argentina but have found no evidence support newspaper reports diversion USSR (Brussels tel. 2014 Dec. 19; Buenos Aires tels. 62 Jan. 16 and 101 Jan. 283). Approximately 780 tanks remain Antwerp in good but weatherbeaten condition (Brussels tel. 71 Jan. 141). These tanks and ones already shipped to Argentina were sold by Victor F. Van Loo to Claude Locreille (Brussels despatch No. 21 Jan. 131). Department has assumed these are same tanks mentioned your A–2652 Dec. 314 purchased by Belgian Overseas Trading Corporation from British Ministry of Supply. Can you or Brussels confirm this?

Locreille has brought suit against Van Loo for breach of contract and tanks have been attached in Antwerp to prevent transfer to third party and to guarantee amount owed to Locreille in damages (Brussels despatch No. 21 Jan. 13). Locreille has made all purchases for Argentine Government on commission basis and latter now negotiating directly with Van Loo to eliminate Locreille commission (Buenos Aires tel. 132 Feb. 51).

These circumstances are directly contrary to US policy disposal lend-lease military equipment, and US–UK Military Holdings Agreement March 27, 1946,5 was intended to prevent such a situation. Agreement provides that lend-lease articles (which these “presumably” are according to your A–2652) may not be disposed of outside UK and dependencies without US approval, but that articles “rendered unfit [Page 312]for military use may be disposed of for scrap” without prior US authority. These tanks sold for scrap but still in good condition, and demilitarization has been trifling according to Brussels’ tel. 1496 Sept. 269 repeated London 105. Result is that large numbers US tanks suitable for military purposes have been and are still being disposed of without US approval.

Department feels British should do what they can to rectify this situation. If original sale to Overseas Trading Corporation was not in accordance with Military Holdings Agreement, then tanks may still be subject to recapture by US, but we do not propose this as solution. Specific result we want is assurance that no more lend-lease tanks will be exported from Belgium to any destination without US approval except that tanks “rendered unfit for military use may be disposed of for scrap” as provided by Holdings Agreement. We do not believe, however, that tanks can be made truly unfit for military use by any method short of scrapping, which Belgians are obviously not doing. If above results can be reached, Department will probably not care whether it is done by returning tanks to possession of British Ministry of Supply, or by securing appropriate commitment from Belgians, or by other means.

You are requested to present Department views to British and ask them to take action on lines indicated above. Please make it clear that, in taking this action, the Department is not prejudging the desirability of any further shipment to Argentina that may be proposed. Point is that in principle, and especially under present conditions, US war equipment should not be available for transfer from one country to another without US consent. Since tanks are subject of law suit, we cannot be sure what will become of them or where they will finally be sent. Under these circumstances, we expect British willing cooperate in correcting situation which they must agree should never have arisen.

Next question is whether British may have sold other US military equipment as scrap when in fact it was suitable for military use. Please explore this problem also, for we are anxious to know whether there are other cases in Belgium or elsewhere that should be similarly corrected.

Since tanks were first sold as scrap and then resold in operable condition, presumably at increased price, US may be entitled to some financial adjustment over and above ordinary accounting for sales of lend-lease equipment. You may say that Department will take up this question with British in connection with current talks with UK Treasury Delegation on final settlement of lend-lease claims and accounts.

Marshall
  1. Not printed.
  2. Foreign Relations, 1947, vol. viii, p. 236.
  3. Buenos Aires telegrams 62 and 101, not printed.
  4. Not printed.
  5. Not printed.
  6. Foreign Relations, 1947, vol. viii, p. 236.
  7. Not printed.
  8. Department of State, Treaties and Other International Acts Series No. 1509.
  9. Foreign Relations, 1947, vol. viii, p. 228.