811.503135/6–749: Telegram

The Ambassador Argentina (Bruce) to the Secretary of State

confidential

509. US meat packing companies last night received checks covering losses since January 1 through April. No provision made for profits but decree which is to be published soon, recognizes right to profit. Packers unable as yet say whether settlements entirely satisfactory. However, they are pleased with developments and hope for completely satisfactory solution. Decree provides for monthly payments of losses until situation stabilized. Government wishes keep this [Page 506] confidential for few days probably pending signature British agreement.1 Will report more fully.2

Bruce
  1. See footnote 1 to the letter from Secretary of Commerce Sawyer, supra.
  2. Despatch No. 604, September 6, from Buenos Aires gave the following further report on the situation:

    “… In recent weeks … there has developed new cause for alarm relative [to] the long-term situation of foreign-owned frigorificos in Argentina. Although the government has been paying regularly the monthly deficits, it has made no effort so far to audit the books or to reach mutual agreement on the question of reasonable profit. Obviously the receipt by frigorificos of payments on this basis over an extended period of time may expose them ultimately to disastrous liabilities.…

    “… The managers of foreign-owned frigorificos are beginning to fear that in spite of professed favorable policy and superficially satisfactory explanations, the actual procedures of the government in paying deficits, in distributing United Kingdom export quotas, and in controlling direct export sales, may result ultimately in their withering on the vine’; that is, causing the gradual liquidation of their operations through decapitalization and loss of export position rather than through outright expropriation or nationalization such as one time was feared.

    “It is possible, of course, that recent discriminatory action may be attributed to laxity of administration and preemption of policy by subordinate officials, rather than to the long-range intent of the Argentine government. In an effort to clarify the situation, the chargé d’Affaires is planning to draw the attention of Minister of Economy Ares as soon as possible to the present alarm of the packers, and to request that he discuss directly with them these problems which recently have arisen.” (835.6582/9–649)