835.10/9–2650
Memorandum of Telephone Conversation, by Mr. Clarence E. Birgfeld of the Office of East Coast Affairs
Subject: Argentine Central Bank Guarantee of Export-Import Bank Credit
| Participants: | Dr. Julio Brignoli, Argentine Embassy |
| Mr. Clarence E. Birgfeld, ARA/OSA |
Dr. Brignoli called to say that they had discussed with Mr. Sauer, of the Export-Import Bank, a proposal by Buenos Aires to redraft the article specifying the terms of the Central Bank guarantee so as not to state that the Central Bank guarantees the credit as “deudor principal”. Dr Brignoli said that Mr. Sauer was extremely agreeable and cooperative, which they appreciated very much, and that they had together drafted an alternative text which Brignoli personally thought would be agreeable to Buenos Aires.1 This alternative text is [Page 735] being forwarded to Buenos Aires today, and Brignoli hopes that early approval will be forthcoming.2
As background to the above, Brignoli had called on September 25 to inform the Department of the Buenos Aires objection to the phrase “deudor principal”, and also to state that his instructions were to inquire of Mr. Miller whether he should present their suggestion directly to the Export-Import Bank or should wait for any possible representation which Mr. Miller might make to the Bank ahead of time. This instruction to consult Mr. Miller probably was founded on the Department’s query to Buenos Aires on September 22 as to the reason for the delay in concluding the contract. Messrs. White and Birgfeld had agreed that Brignoli should continue dealing directly with the Export-Import Bank, and he was so informed, with the results reported above.
- One provision of the loan was that evidences of obligation were to be in the form of promissory notes issued to the Export-Import Bank by a consortium of Argentine commercial banks and guaranteed by the Central Bank of the Argentine Republic. The phrase “deudor principal” was omitted from any reference to the Central Bank in the final Spanish text of the loan agreement, which was signed in Washington on November 13, 1950. (Lot 55 D 539, Box 4, File No. 751)↩
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In a memorandum of conversation dated October 23, 1950, Mr. Birgfeld reported in part being informed by Sr. Brignoli that on October 20, 1950, the Argentine National Economic Council had approved the proposed agreement between the commercial banks and the Export-Import Bank and that on the same day a necessary preliminary agreement between the Central Bank and the commercial banks had been signed. (835.10/10–2350)
Mr. Miller, Mr. White, and other ARA officials met January 2, 1951, with the Discussion Group on Argentina, an offshoot of the Council on Foreign Relations. According to minutes of the discussion by Fritz Stern of the Council, Mr. Miller was “… asked what would have happened to Argentina if she had not received our loan. Mr. Miller felt that more repressive measures would have been taken and also that Argentina would have encountered more frictions with other nations. Mr. White added that there probably would have been very little economic change. Prices of Argentine goods have increased greatly since the beginning of the Korean war. The price of wool has doubled; the economic position would have improved in any case. Because of the loan we get credit for economic developments in Argentina which have very little to do with our loan.” (enclosure to letter from George S. Franklin, Jr., of the Council, to Mr. Miller, March 1, 1951, 611.35/3–151)
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