Foreign Relations of the United States, 1950, The United Nations; The Western Hemisphere, Volume II

Buenos Aires Post File 510.1, 1950–52, Lot No. 58 F 10

Memorandum by the Ambassador in Argentina (Griffis) to the Assistant Secretary of State for Inter-American Affairs (Miller)

confidential

Buenos Aires, February 15, 1950.

Subject: Matters to be Discussed with President Perón¹

1. Rio Pact.² The Rio Pact was ratified by the Argentine Senate on July 22, 1948, but has never been ratified by the House, which meets in May 1950. I have twice discussed with Foreign Minister Paz my urgent suggestion that President Perón make a public announcement that he personally favors and will favor during the coming session of the Congress the ratification of the Rio Pact. I do not believe that Minister Paz has taken this up with the President.

2. Argentine Membership in FAO. When Mr. Dodd, the chairman of FAO, was in Buenos Aires for a few days recently, he stated that he had received great encouragement on all sides in the problem of Argentina joining FAO. I believe that a small push here might bring Argentina into the fold.

3. Membership WHO. I believe that the matter of Argentine membership in WHO should also be discussed.

4. Position of the Frigorificos. Since 1947 when the three great American packing companies operating here (Swift International Armour, and Wilson) began to suffer losses on account of Government packing regulations, the Embassy has closely followed their problems. During the past year and a half they have been operating under a confused decree which they understand to mean that the Government will pay their losses and probably a small profit. However, while the Government has until December been sending checks to cover these losses in accordance with frigorífico statements, the packers’ books have never been audited despite repeated promises directly and indirectly from the President, Remorino and Cereijo.³ In the most recent conference with Cereijo, he made me a firm commitment that this audit would be started, probably within the week of January 11, but certainly prior to your arrival. This commitment has not been fulfilled, nor have any of the other former commitments as to the beginning of the audit been made.
The packers are now presented with a new decree under which they claim it is impossible to work, and they are anxious to have the former decree kept in force at least to the extent of guaranteeing them against loss, the approval of their accounts by the Government, and the payment of a small profit. In a nutshell, they want us to continue our attempts to determine just exactly where they stand and what is the real intent of the Argentine Government toward them.

5. American Motion Pictures. Some slight progress has been made on the problem of the issuance of import permits for American motion pictures. The American companies are standing firm on their refusal to accept a quota, and I am in complete sympathy with their stand. My latest conversations with Cereijo involve the possibility of a gentlemen’s agreement (without a decree or quota) whereby the companies would only ask for and he would assure the issuance of a certain number of import permits for each company with the understanding that a certain percentage of their profits here could be piled up in pesos, but that the balance must be invested in Argentina for a certain length of time. The American companies are now considering this matter.

6. Petroleum. The whole question of petroleum supplies to American companies here through the purchase either of sterling or dollar crude has become so involved in the general difficulties arising between the United States and Great Britain that I doubt if useful purpose could now be served with a discussion on this matter with Perón insofar as it relates to supplies of crude oil to the two American companies, Jersey⁴ and Ultramar,⁵ during the present year. However, the general question as to the real intent of the Argentine Government towards these companies is of great import, i.e., whether they are to be permitted to live, and if so, for how long, or whether they will be expropriated on a fair basis or will be starved to death through attrition methods. The question of the wisdom of opening this discussion is left to your good judgment.

Jersey’s problem is entirely a problem of obtaining sterling crude, which they are willing to do. On the other hand, Ultramar’s problem is that they are equipped only to refine sweet or non-sulfurous oil, and their basic situation may be summed up in the following memorandum which I have received from them:

“On October 19, 1949 Ultramar was called by the President of YPF, Engineer Canessa, who proposed the purchase of the Ultramar Company in dollars.

“After consultations with their stockholders, Ultramar replied to Engineer Canessa on November 3, 1949 stating that in principle they would be agreeable to enter into negotiations on the basis proposed.

“In view of the fact that up until now YPF has made no definite offer and taking into account that our Refinery has shut down and we are now on the verge of going out of business, it is imperative that we receive some sort of a decision without further delay from the Argentine Government in regard to the proposed purchase.”⁶

7. General Solution of Dollar Problem. I do not know whether or not you wish to discusss with the President the question of funding Argentina’s debt to the United States together with a revolving credit from the Export-Import Bank. Possibly this subject might be touched upon at the dinner for the members of the Economic Council.⁷

8. Pan American and Panagra.⁸ Pan American and Panagra have substantial deposits of pesos amounting to, say, 20 million, which they claim should be made available to them in dollars as most of the peso avails accrued as the result of the expenditure of dollars. This is a very difficult problem for them in view of the fact that it composes a substantial part, probably around 50 percent, of Panagra’s net working capital. We have presented various notes on this subject, but have never been able to get action. I do not know whether you would wish to discuss this with the President or with the Economic Council.

9. Communism in South America. You should be warned that Perón’s apparent escape clause from all subjects regarding United States-Argentine relationships in which he does not wish to be involved will be a switch of the conversation from the topic under discussion to the question of Communism in the various South American countries regarding which he is very well informed. It is difficult, if not impossible, to switch him off this subject and return his mind to any economic or other problems.

10. Publication of Joint United States-Argentine Commission Recommendation.⁹ A good deal of suspicion and question has arisen on account of the fact that neither Government has to date published a summary of the Joint Commission’s recommendations. I do not know how far you wish to go into this matter with the President or the Ministers, but I recently asked Walstrom¹⁰ to discuss with Seré¹¹ and Brignoli¹² the status of the principal points of the report and to clarify the responsibility of implementation charged to each Government. I attach herewith a copy of Mr. Walstrom’s report.

S[tanton] G[riffis]

1. During Mr. Miller’s visit to Buenos Aires, February 19–24, 1950. There is no positive evidence that this memorandum was shown to Mr. Miller.
2. For text of the Inter-American Treaty of Reciprocal Assistance, see Department of State Treaties and Other International Acts (TIAS) No. 1838, or 62 Stat. (pt. 2) 1681.
3. Ramón A. Cereijo, Minister of the Treasury.
4. Reference is to the Argentine subsidiaries of the Standard Gil Company of New Jersey.
5. Ultramar S.A. was a jointly owned subsidiary of the Texas Company and the Socony Vacuum Oil Company.
6. The Argentine Government did not purchase Ultramar until 1952.
7. The evening of Thursday, February 23.
8. Pan American Grace Airways.
9. The Department’s telegram 783, December 21, 1949, to Buenos Aires, contains a summary of recommendations of the Joint Argentine-United States Committee on Commercial Studies. Text is printed in Foreign Relations, 1949, vol. ii, p. 517.
10. Joe D. Walstrom, Counselor of Embassy for Economic Affairs.
11. Julio M. Juncosa Seré, Director General of the Ministry of Economy.
12. José Julio Brignoli, Director of the Exchange Department of the Central Bank of the Argentine Republic.