Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

611.35/12–3053

Memorandum of Conversation, by the Ambassador in Argentina (Nufer)¹

[Extract]

confidential

Buenos Aires, December 30, 1953.

. . . . . . .

I then said I woud like to refer to a less agreeable subject, i.e., the Czechoslovakian steel mill.² I gave the President and Remorino³ each a copy of a memorandum⁴ which the Embassy had prepared explaining the exact status of the matter and suggested that they might like to read it at their leisure (see enclosed memorandum). I said there appeared to be no alternative to the sale of the mill at public auction to the highest bidder.

Perón said that Sosa Molina,⁵ the Minister of Defense, who was constantly importuning him about the mill, had told him that he was trying to arrange for Westinghouse International to bid on the mill with a view to reselling it to the Argentine Government if its bid proved successful. Sosa Molina seemed to think that Westinghouse International might be willing to cooperate along these lines. He added that Colonel Sosthenes Behns of IT&T had mentioned the mill to him when he was in Buenos Aires a few weeks ago and that he intended to instruct Ambassador Paz to get in touch with the Colonel in order to find out if there was any way in which IT&T could be of assistance.

Perón inquired if there was any way in which Argentina itself could submit a bid without the immediate outlay of dollars should its bid prove successful. He asked specifically whether it would be possible to pay in installments or whether the necessary dollars could be advanced by the Export–Import bank. I replied that I was certain neither of these procedures would be possible. The Treasury, I felt, would probably insist on cash and the Export–Import bank could not, for political reasons, loan money to any country to pay for the mill because any unsuccessful U.S. bidders could then allege that a U.S. public lending institution had made it possible for a foreign country to outbid them. Perón seemed to understand this and told Remorino to keep in close touch with Ambassador Paz so that every possibility might be explored. I got the impression that Perón was obviously very much interested in securing the mill for Argentina but appreciated the situation in which we found ourselves and that he did not, at this stage at least, harbor any resentment against the United States over the turn of events.

I then said there was another problem which I wanted to mention, i.e., the recent establishment of a U.S. import quota on oats. Perón apparently had no previous knowledge of this but Remorino said this was a disturbing development and one on which he had been in close touch with Sr. Cafiero,⁶ the Minister of Foreign Trade. I read to Perón and Remorino, and left with them copies of, a memorandum⁷ on the subject which I told them was unofficial and perhaps not completely accurate as much of the information it contained was received yesterday over long distance telephone. The President seemed to understand our position. Remorino was apparently more disturbed and remarked that when he was Ambassador in Washington the State Department constantly complained about high IAPI prices and now he said we were complaining because its prices were too low. I said that even if Argentine oats were offered at the equivalent of the U.S. market price their unlimited importation would still constitute a serious problem in view of our large surplus and the difficulties which such importations would create for our price support program. Remorino inquired whether there was any assurance that the entire 2.5 million bushels set aside for countries other than Canada could be supplied by Argentina. I told him that it would not be possible to give any such assurance and that as I understood it, it was a matter of “first come, first served”. I understood, however, that Argentina was the only potential supplier of important quantities of oats to the United States outside of Canada Remorino said he had instructed Cafiero to expedite shipments as much as possible with a view to insuring that Argentina would get the lion’s share of the quota. He said that the sole purpose of these exports was to obtain dollar exchange for the purchase of essential U.S. products.

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1. Transmitted to the Department of State under cover of despatch 636, from Buenos Aires, dated Dec. 30, 1953, not printed (611.35/12–3053). The conversation reported in this memorandum took place on Dec. 29.
2. Reference is to a rolling mill for the production of steel purchased in the United States by a Czechoslovakian firm in 1947 for approximately $17 million. In 1948, the U.S. Government denied application for a license to export the mill to Czechoslovakia, and in January 1952, the Treasury Department issued an order blocking the unlicensed transfer of the mill, pending settlement of U.S. claims against Czechoslovakia. The Argentine Government signed an agreement with the Czech Government in November 1953 to purchase the mill for the equivalent of $12.5 million in Czech currency, payable half in commodities and half in cancellation of an existing commercial debt. The United States disapproved this arrangement and refused to release the blocking order. A memorandum by Mr. Woodward to Secretary Dulles, dated Mar. 22, 1954, summarized developments to its date (835.33/3–2254). Additional pertinent documents are in file 835.33 for 1953 and 1954.
3. Foreign Minister Remorino was also present during the discussion.
4. Not printed (835.331/12–1153).
5. José Humberto Sosa Molina.
6. Antonio Francisco Cafiero.
7. A copy of the referenced memorandum, in Spanish, dated Dec. 29, 1953, attached to the source text, is not printed.