Foreign Relations of the United States, 1949, The United Nations; The Western Hemisphere, Volume II

811.503135/4–2849: Telegram

The Secretary of State to the Embassy in Argentina

confidential

Washington , April 29, 1949—7 p. m.

297. Transmit fol note Arg FonMin reurtel 375 Apr 28:¹

I have the honor to refer to the critical situation of the United States meat packing companies in Arg and to inform Your Excellency that I have advised my Govt that these firms cannot be expected to continue operations under existing circumstances. I have further advised my Govt that the Arg Govt has promised the packing houses, including the US, Brit and Arg companies that certain corrective steps would be taken and as a result of this promise the packers agreed not to interrupt operations at this time. I have been compelled to inform my Govt that these steps, listed below, have not yet been taken:

1. The Economic Council will authorize payment of the deficits suffered by the companies during the period from Jan 1 to Apr 30 of the current year and monthly thereafter.

2. The Economic Council will provide fortnightly or monthly the funds necessary to comply with the resolution dated March 31, 1949, by the National Director of Labor.²

3. The payments referred to in the above-mentioned points one and two shall not be a loan but such payments shall be made as definite advances against the deficit of each company but subject to final adjustment after competent authorities have made necessary verification. In the event interest is to be charged on any sum advanced in accordance with this plan, the respective amount shall be recognized as an expense item.

4. The Economic Council acknowledges that the companies are entitled to a reasonable profit on operation and agrees that in making final settlement all accounts of the companies will be assigned a reasonable margin of profit covering the period included in the plan. The basis of such margin shall be a percentage agreed upon and based on actual sums paid by each company for three species of livestock: beef, mutton and pork.

5. For final settlement of the account under this plan, basis for establishing the deficit shall be the difference between the total costs and charges including actual cost of each one of the three species of livestock mentioned and the actual amounts realized from corresponding products.

My Govt is gravely concerned by the situation in which the US packers find themselves and has instructed me so to inform Your Excellency’s Govt. My Govt has further instructed me to convey to Your Excellency’s Govt its earnest hope and wish that appropriate steps for the complete solution of this problem can be taken by the Arg Govt before irreparable harm results to the Arg internal economy and to Arg-US economic relations which both Govts have been so actively endeavoring to improve.³

Acheson

1. Not printed; it suggested the transmission of a note similar to that contained in Department telegram 297, emphasizing that in view of the Cabinet dissension and the “utterly confused situation” in Argentina it was necessary for the U.S. Government to take a strong position in order to protect the legitimate interests of American business and the dignity of the United States (811.503135/4–2849).
2. The resolution dealt with wage increases for the workers.
3. The note was transmitted to Mr. Bramuglia on April 30.