110.15-Mi/3–150

The Ambassador in Argentina (Griffis) to the Department of State

confidential

No. 355

Subject: Visit of the Honorable Edward G. Miller, Jr., Assistant Secretary of State for Inter-American Affairs Surpasses Expectations.

Mr. Miller arrived at Morón Airport in Buenos Aires as scheduled on Sunday, February 19. He was met by officials of the Argentine government, including the Chief of Ceremonial, the two Sub-Secretaries of Foreign Relations and other Argentine officials, and members of the Embassy staff. Thereafter followed a strenuous four-day program. The schedule initially arranged for Mr. Miller was kept, and a number of additions were made as each day passed. His activities are shown in Enclosure No. 1.1 Mr. Miller found time, in addition to all of his engagements, to confer with officers of the Embassy, to prepare material, and to receive a number of American businessmen especially interested in seeing him.

Telegrams and despatches referred to above2 and memoranda of conversations enclosed include detail on subjects treated during Mr. Miller’s visit, and the manner in which they were treated. This despatch mentions principal subjects in summary form.

Ratification of the Rio Treaty by Argentina was discussed with President Perón (Enclosure No. 2),3 who on February 21 stated that he felt it unwise to force it through the Chamber of Deputies.4 Subsequently in a private conversation with Mr. Miller the President said that he thought it quite possible to arrange ratification of the Rio Treaty during the session of Congress beginning in May and that he would use his efforts to that end (Embtel 177 February 27).1

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Communism in Argentina was reviewed and discussed at length by President Perón and a number of his advisers on the afternoon of February 20. The President voiced the opinion that military pacts should be entered into to provide for the security of the South American continent and agreement should be reached on measures to be taken by the several countries in combatting Communism. Mr. Miller explained the United States attitude largely in terms of a policy which was one of working for peace and towards the prevention of war, and pointed out that with respect to under-developed countries our policy is to assist in the raising of living standards rather than to combat Communist influences as such. The whole exchange of views was interesting, provided an opportunity for expression and, although inconclusive, furnished President Perón with our thinking (Enclosure No. 2 and Embtel 177 February 27).

Treaty of Friendship, Navigation and Economic Development. At the end of a long discussion with President Perón and members of the Economic Council on Tuesday, February 21, the Argentine Minister of the Treasury voiced the thought that the conclusion of such a treaty would be desirable in furnishing assurance to private investors. All of those present, including President Perón, agreed on the desirability of such a treaty. Mr. Miller said that we would be glad to enter into negotiations and he was prepared to have a qualified technician come to Argentina for such purpose as soon as might be desirable (Enclosure No. 3).5

Problems of American business were treated at some length. During a long discussion with the Economic Council and President Perón on February 21 (Enclosure No. 3) the feeling of uncertainty which provides a psychological barrier to American investment was cited as growing out of the difficulties of the Argentine subsidiaries of American and Foreign Power,6 of the Frigoríficos and of the Petroleum [Page 698] Companies.7 This was the cause of an animated discussion. It was agreed that these problems involving many details were not proper for discussion with Mr. Miller but should be taken up between the Embassy and members of the Economic Council. Subsequently, a conference was arranged for February 23 at which problems of the above-mentioned companies, as well as those of the airlines, Panagra and Pan American, were discussed (see Embassy Despatch No. 356 of February 288). Final resolution was not reached concerning any of these problems but considerable advances were made and it is the Embassy’s hope that within the near future suitable modus vivendi will result. It was subsequently learned that President Perón had given instructions to members of his cabinet that solutions be reached on all such problems as promptly as possible.

The cases of Swift International and Braniff Airlines were mentioned to the President by Mr. Miller.

Financial assistance to the Argentine from the United States was not brought up directly by any of the officials, except that Dr. Juncosa Seré and Treasury Minister Cereijo alluded to the desirability of converting certain soft currencies held by Argentina for dollars (Enclosure No. 3). The subject was not pursued when Mr. Miller stated that such conversion involved a number of difficult problems. Ambassador Remorino, at the end of the same conference, and speaking [Page 699] before the President, brought forth an idea of export credits to avoid cash payment, particularly on machinery and heavy equipment items. This subject likewise was not pursued. It may be significant to mention that subsequently President Perón in a speech again stated that he did not wish any loans, but said that credits were something else again and would be welcome. As far as Argentina is concerned money may well be welcome providing the President can give it a political appellation suitable to his internal situation. It is understood that Mr. Miller spoke privately with Ambassador Remorino and Drs. Juncosa Seré and Brignoli, pointing out that the Export Import Bank desired statistical information in making a study which it was making to appraise the Argentine Republic’s capacity for repayment.9

Treasury Minister Cereijo was urged by Mr. Miller to visit the United States and at the time of his leave taking with President Perón on Friday, February 24, Mr. Miller pointed out to the President that Dr. Cereijo would make a valuable Chief of Delegation to the IA–ECOSOC meeting in Washington on March 20; that the meeting could, in a sense, be a pretext, but that it would be well worthwhile for Cereijo to go. The President agreed that it was an advisable possibility and that he might also send one or two other members of the Economic Council on such a trip.

Permanent Joint Committee for Economic Studies. As a further result of discussions with President Perón, Dr. Arean, Commercial Director of the Ministry of Foreign Relations, on Monday, February 27, advised the Embassy of the desire of the Argentine government to place the Committee on a permanent basis in Argentina and requested permission to issue a press announcement to that effect. Such permission was readily granted by Ambassador Griffis (Embtel 175 February 2710).

Freedom of the press was a subject dealt with by Mr. Miller on a personal basis. He had the opportunity to speak to President and Mrs. Perón at a dinner on February 21. It is understood that Mr. Miller raised question as to the policy of the newspapers Democracia arid Epoca. It was an interesting point to raise inasmuch as a member of the Board of Directors of Democracia, Alberto Dodero, was present, and Mrs. Perón, who is said to be the virtual owner of Democracia. Mr. Miller had pointed out to President Perón on other occasions the difficulty in establishing a full understanding when the [Page 700] presses of each country publish news unfavorable to the one or other. He had also pointed out the depth of feeling throughout the United States concerning any restriction on the freedom of the press. It is not known at this point whether the distinction between freedom of the press and an unfavorable press was appreciated. As an interesting sidelight it may be mentioned that an issue of Democracia very favorable to Mr. Miller was pointed out to him by Mrs. Perón the day following their conversation.

Press reaction to Mr. Miller’s visit was exceedingly favorable. Prior to his arrival the pro-government press, especially Democracia and Epoca carried a series of articles and editorials to be described partly as defensive breast beating and partly to establish a position which would be a good foundation for attack should the visit not go as well as hoped. The opposition press, in addition to a good deal of factual reporting was, by and large, friendly and favorable. Each day of the visit saw a change in tone ending with practically a paean of praise. This was partly the result of Mr. Miller’s activities, of his winning personality, the fact that he spoke Spanish and that he does have the indefinable quality of knowing how to get along with Latin Americans. A principal cause, successive to the above, was a flip-flop by the government press following what are understood to have been orders from on high. On Wednesday afternoon, February 22, it was learned that the Subsecretariat of Information had been given the word which it passed on. Mr. Miller’s long conferences with President Perón and his advisers and his more intimate discussions with the President and with Mrs. Perón were responsible for this favorable treatment, both because of his personality and as one who had smoothly but frankly demonstrated the reasonableness of United States policy and action. The reaction of the press, favorable in itself, resulted in generally good comment from the public. A feeling of optimism regarding Argentine-United States relations grew and was especially reflected in American business circles.

For detailed account of press activity see Despatch No. 359 of February 27.11

The value of Mr. Miller’s visit was very great. It came at a time when some outside influence could serve to stimulate understanding. Basic economic factors have been highly unfavorable; the shortage of dollars; the shortage of pounds sterling; difficulties with the British over their trade agreement and sales of meat; a prolonged drought in Argentina and a general feeling of pessimism has undoubtedly caused great preoccupation among the leading members of the government. During the past few years there has been no substantial deviation from a general line which sought to make the imperialist

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United States a whipping boy both for its international policies and to a considerable degree for its domestic policy propaganda. Whether or not President Perón and his chief advisers have been prepared to adopt a different line is not known. Logically, it would appear that this must be so; politically, they could not, without a suitable medium. The visit of the Assistant Secretary of State for Inter-American Affairs provided such a logical medium. Quite apart from these speculative bases, principal credit must go to Mr. Miller himself. The visit of the Assistant Secretary, the highest ranking official to come to this country in the past ten years, a man thoroughly versed in the problems of the hemisphere, one who speaks their own idiom, his pleasant, forceful personality and his quality of winning respect and affection provided the greatest possible aid towards understanding of the United States and to the achievement of our policy.

There is still discernible, however, a somewhat tongue-in-cheek attitude which will permit the Argentine to reverse its friendly feeling some time and blame us for its many ills providing that concrete accomplishments in the way of increased trade, credits or other matters are not forthcoming within a reasonable time. Even should this happen, Mr. Miller’s visit can continue to be looked upon as a positive good for there must inevitably remain a residual of remembrance and esteem which will redound to his and, indirectly, to our benefit. Although it is true that the burden of action lies primarily on Argentina, the United States should forego no opportunity of so implementing its policies as to further strengthen the favorable change which has so far occurred.12

For the Ambassador:
L. D. Mallory

Counselor of Embassy
  1. Not printed.
  2. References to other documents in heading of this despatch are omitted.
  3. Not printed, but see footnote 4, below.
  4. Enclosure No. 2 contained an unsigned memorandum of a conference held February 20 between President Perón, Mr. Miller, and other officials of government. It reads in part: “[The President said that] in the Chamber of Deputies about 30 percent of the members are of the opposition party, and they criticize the Treaty. The President of the Chamber had canvassed the Congress for its opinion and found that the Peronist bloc was not entirely in favor of ratification because the opposition was against it and also partly because some of the Peronist bloc was also against it, which he attributed to the thought in many Deputies’ minds that in some way the Rio Treaty was connected with former Ambassador Braden. The President pointed out that many of the Deputies were of humble origin; had fought against Braden and John Griffiths and could not remove the latter from their minds. The President said that he did not wish to force ratification of the Rio Treaty, but that undoubtedly it would work itself out in good time.” Spruille Braden had been Ambassador from May to September of 1945.
  5. Not printed.
  6. Not printed, but see footnote 7 below.
  7. According to a memorandum of conversation dated November 18, 1949, by Albert B. Franklin, Second Secretary of the Embassy in Argentina, Mr. William A, Reece of the American and Foreign Power Company had stated that the company had on May 6, 1949, offered to sell all its Argentine subsidiaries to the Argentine Government for $116.8 million, in accordance with what it supposed to be that Government’s desire. On November 10, 1949, an agency of the Government had replied that Argentina wished to purchase only those AFP properties not already expropriated or “intervened” by municipal or provincial governments. (Intervention was a proceeding whereby provincial and local governments substituted Argentine officials for a company’s officials but still ran the property for the account of its private owners.) Mr. Reece had stated that more of AFP’s Argentine subsidiaries had been intervened than had been expropriated, and, since intervened properties were invariably run at a loss, intervention’s result was a process of attrition intended to render AFP willing to quit Argentina without compensation. (Enclosure No. 1 to despatch No. 808 from Buenos Aires, November 22, 1949, 811.503135/11–2249)
  8. The unsigned memorandum of this conversation (Enclosure No. 3) reads in part:

    “On the request of Assistant Secretary Miller, the Ambassador outlined the basic problems which he felt, on a psychological basis, were inhibiting the confidence of all American business and, until resolved, would continue to constantly frighten American investment in Argentina. These three problems all resulted from the fears of nationalization and treatment by the government and referred to

    (1)
    The subsidiary of the American Foreign Power Company;
    (2)
    The Frigoríficos; and
    (3)
    The Petroleum Companies.

    Knowing that Ministers Cereijo and Gomez Morales [Minister of Finance] were prize fight fans he stated that these three operations were groggy and should either be knocked out or the government should call off the fight.

    Mr. Miller said he agreed with the Ambassador and that neither the Department nor the Embassy wished to intervene on behalf of any particular company. We are not interested primarily in whether an individual company makes money or not but, rather, we are interested in the whole and the overall problem which has primarily a psychological basis founded on treatment accorded and facilities given to capital as a whole. He mentioned that he had very recently been in Puerto Rico where he found the Governor had undertaken an active program to attract American capital. Each year there are some 16 billion dollars of investment capital available in the United States, which is a very large amount. The Governor of Puerto Rico told him that if he could induce one-half or one percent to come to Puerto Rico he felt that he would be doing well and that Puerto Rico had gone into the matter realizing that it must compete for capital. Mr. Miller pointed out that investors in the United States are a relatively closely-knit group; that they exchange views and check with one another, and that matters affecting particular companies or industries in a country are a matter of general knowledge and preoccupation.”

  9. Not printed.
  10. In telegram 49, February 25, 1950, from Montevideo, Mr. Miller said in part: “At dinner Thursday night at Embassy residence with economic council and Juncosa, Brignoli, and Remorino, I informed Remorino and others for the first time of Export-Import Bank’s desire for additional statistical information necessary to evaluate Argentina’s capacity for repayment, prior to any further consideration of Argentina’s financial problem and I indicated to Remorino that he should take initiative in approaching Export-Import Bank.” (811.05135/2–2550)
  11. Not printed.
  12. Not printed.
  13. In conclusion to telegram 49 from Montevideo (see footnote 9), Mr. Miller said:

    “I am inclined towards optimism as result visit to Argentina and believe if Argentine Government proceeds to put into effect its expressed intention with respect to specific American business problems, we should reciprocate by giving serious consideration to funding of backlog or exporter credits. I have indicated to Cereijo that settlement of situation of American businesses referred to was indispensable to even preliminary consideration of financial problem and that once these situations were adjusted, we would then feel that our task would be greatly facilitated by signature of economic treaty. This seemed entirely agreeable and understandable to him and he and other Economic Ministers also expressed their desire to achieve specific accomplishments which would facilitate closer cooperation between two governments.”