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

735.00/3–150

The Ambassador in Argentina (Griffis) to the President

confidential

Buenos Aires, March 1, 1950.

My Dear Mr. President: It hardly seems possible for me to realize that it is almost six months since you nominated me for this post, for the time has passed so rapidly and the complex problems of American business in Argentina have so completely filled my time. I have long intended to write you a brief note on the general situation, but, as you know, hell is paved with good intentions.

I have been witnessing one of the most dramatic and interesting social experiments in the history of the world—“Perónismo”—an effort to create changes in the economy of a country in four short years that should, under even a less ill-adroit government, take at least 20 years; a strange mixture of nationalism, dictatorship and paternalism which may produce a great social result—if the whole laboratory does not blow up.

Here is a dictatorship which does not dictate, for Perón’s mind does not accurately function on economic matters, and after taking over the vast enterprises of railroads, merchant marine, public utilities, air transportation and public health, he has turned the operation over to unskilled and ill-trained ministers who seem to spend about half of their time in their operational jobs and the other half jockeying for position among their fellow ministers and against ambitious members of the party. I can readily believe the reports that the nationalized properties are running at a loss of some millions of pesos a day and that very little progress in efficient management is being made. When a government gives jobs for votes, efficiency flies out of the window.

From the point of view of external financial health, it is obvious that the situation is becoming daily worse, for Argentina is in substantially the same jam with England debtwise and sterlingwise as it is with the United States in dollars. However, while we have little to offer Argentina in the way of encouraging imports to us on account of the competition of their agricultural products with ours, the hoof-and-mouth disease embargo, et cetera, England is in a position of desperately requiring Argentine meat while Argentina is absolutely dependent on imports of petroleum of which sterling petroleum is of course easiest to obtain by barter. We are of course rapidly losing this market for our own exports on account of their dollar shortage, and most of the efforts of the Embassy are being devoted to the solution of this problem. It is being complicated now for the future, however, by one of the worst droughts in the history of the nation which has already resulted in substantially a complete loss of the corn crop and which, if it continues, will seriously cut down the exportable surplus of meat.

Here, too, is a country of two Presidents: one the duly elected President, General Perón, and the other his “esposa”, Señora de Perón, whose voice, influence and finger are apparently in everything affecting labor and social welfare. So far this two-cylindered machine has functioned smoothly, but it would be an unconscionable situation if these two began to fail to function in harmony.

I am constantly asked by American travelers and others my opinion of the political situation in Argentina. As I see it, there is no political situation here. The Peróns are firmly in control. A free vote tomorrow would, I think, give them a large majority of the votes of the nation. They will continue in firm control of the nation just so long as the price of bread and meat and the elemental necessities of life can be held down to a price which makes them available to the working man within his true income. They are held down at the moment by every conceivable form of direct and indirect subsidy, but unless the productivity of the country can be greatly improved, this cannot last forever, and the spiral of increasing circulation, rising labor costs, and lowered productivity can already be clearly charted.

The press is in general thoroughly anti-American, and the ghosts of Braden, Wall Street and “Yanqui imperialism” rove through the newsprint. There is no freedom anywhere in press, radio or public speech, and in general the principles of civil liberties have disappeared in Argentina. The intensity of nationalism, the inability to convert pesos into dollars, and the practical shutting off of American products into this market has substantially discouraged large and small American companies here.

This is a pretty black picture, but it can and, I think, will be improved. The visit here last week of Assistant Secretary Eddy Miller was a tremendous success. Miller has a great grasp of South American problems, has the Latin touch and a complete fluency in the Spanish language. He created a tremendous impression of good will with the President, the Señora and the Ministers. All of the efforts which we have been making for months were galvanized into action, and constant meetings are being held to try to solve the problems of American companies here and to obtain for them reasonably fair treatment. We are working urgently on the one hand to solve their dollar difficulties and on the other hand to break down the psychological barriers which, unless destroyed, will continue to inhibit Argentine-American business. We have reactivated the Joint Argentine-U.S. Trade Commission and we have started work on the discussion of a treaty along the lines of the recently signed United States-Uruguayan pact.¹ I do not want to go into too many details for you to read in your crowded life, so I can say in summary that the situation vis-à-vis the United States is dark but I do not think hopeless.

I am leaving in three days for Rio de Janeiro to attend the South American ambassadors conference there. Of course this letter indicates no answer, and I merely wanted to give you a brief travelogue of the Argentine picture as I see it.

With warm personal regards to you and Mrs. Truman,

Sincerely yours,

Stanton Griffis

1. Text of the Treaty of Friendship, Commerce, and Economic Development signed at Montevideo November 23, 1949, is printed in the Department of State Bulletin, September 25, 1950, p. 502. For additional information regarding this Treaty, which was not ratified by Uruguay, see editorial note of November 23, 1949, in Foreign Relations, 1949, vol. ii, p. 794.