711.34/9–2848: Telegram

The Ambassador in Paraguay ( Warren ) to the Secretary of State

secret

423. President González called me to Palacio this morning told me following in secret.

[Page 706]

The international situation looks bad, seems to be growing worse. Another war may be imminent. In such case he offered us Paraguay’s full cooperation (I said situation appears bad but I hoped war would not eventuate). In any event he offered civil and economic cooperation extent Paraguay’s ability. She ready increase her production along lines we might indicate and grant us air bases. He thinks Argentina would be against USA in event war and said it behooves Paraguay help USA while she fighting the battle of all the American republics. He suggested we might help Paraguay complete road to Iguazu as defense measure view Paraguay’s strategic position in South America. Also mentioned Paraguay tannin (quebracho extract) saying we could help by taking all her production thirty to forty thousand tons instead of buying Argentina’s. Paraguay desirous and would be able help Great Britain by selling her more products if USA could exchange dollars for five to six million pounds sterling over period two years, to be spent in USA. He radioed Paraguayan Embassy Washington re increased Paraguayan sales under Marshall Plan.

I thanked President, said would inform Washington today. Added I feared too early Washington say anything. He said nothing might occur and hoped for sake Paraguay, USA and all others war would not eventuate but he wanted USA know his Paraguay’s position.

Reply my sounding he said does not believe Perón plot accusations and connected them with Argentina’s bad economic situation adding she shorter dollars than Paraguay. President left impression he will submit all this information to Ambassador Morales.

Comment: In offering foregoing President said he is always looking out for interests his country. I assured him that was what we expect of him and every other nation but USA is still hopeful war will not come.

Repeat to Army.

Warren