Holland files, lot 52 D 295, “1954–1956”

Memorandum of Conversation With President Perón, by the Assistant Secretary of State for Inter-American Affairs ( Holland )1


I made more or less the following statements to the President. I came to Argentina for two purposes.2 First, to report to him our analysis of the results of the Rio Conference, and second, to give him my interpretation of the general situation in the United States, particularly as it affects our relations with Argentina.

The greatest importance of the Rio Conference to the United States was that it forced us to review our economic policies in Latin America and to achieve substantial unanimity within our Government as to what those policies should be. We did that during the interim after the Caracas Conference and, to a greater degree than has been true in past years, today we have a rather clear economic policy for the Hemisphere, one that has general support throughout the Government and the Congress.

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The principal features of that policy are expansion of credit and economic development; expansion of Inter-American commerce with greater assurance that access to United States markets will not be impaired and, finally, greater emphasis on measures which will encourage private enterprise to be more active in the Hemisphere.

Another very important feature of the Rio Conference is that it represented something of a frontal collision between two schools of economic thought; first, those men who sincerely feel that the interests of our peoples would be best served by increasing socialism among governments, greater intervention of government in business and displacement of private enterprise. The opposing view is that of the United States and Argentina which views private enterprise as the principal factor in economic development.

For some years we have observed a gradual and increasing trend toward socialism among the governments of Latin America. The Communists strongly support all such movements because they lead to conditions favorable to the eventual control of governments by communism. We feel that at the Rio Conference there was a rather sharp collision between those two schools of thought, and that the Conference largely committed itself to the economic philosophies of Argentina and the United States.

Finally, I attributed great importance to the fact that the Conference gave Secretary Humphrey an opportunity to know much of Latin America at firsthand. He obviously left the Conference enthusiastically interested in the future development of Latin America and determined to see that the policies announced by the United States Delegation are positively implemented.

At this point the President interrupted me and said that when he came into power in Argentina the country had for years undergone a process of Marxist indoctrination. If he had from the outset supported the private enterprise system he would have been discredited and would never have achieved the support of the people. On the contrary, in the first years he had taken a strongly Marxist point of view to capture the support of masses who were predisposed in that direction. He had gradually shifted his position to the right bringing the people with him. He now feels that they will support him, is openly anti-Communist and pro free enterprise position.

I then told the President that I would like to give him my own analysis of the current situation in the United States.

Today our Latin American economic policies reflect the views of those men like Secretary Dulles, Dr. Milton Eisenhower, Senator Capehart 3 and Mr. Randall 4 who are well known to support [Page 483] strengthening our commercial ties and expanding our financial support for the economic development of the Hemisphere. These views have the full support of the President and also of Secretary Humphrey in which as regard to Argentina, there is no feature of our relations within the Hemisphere to which we today accord greater importance than our steadily increasing cooperation with Argentina. We feel this has great significance to the security of the Hemisphere, because, situated as we are, the two nations can by close cooperation go far toward assuring the security of the Americas.

I feel that our current cooperation can also have important economic significance. In this connection I cited the successful results of our efforts to avoid the establishment of a quota for tung oil and our own avoidance of negotiations on Brazilian wheat which could have prejudiced Argentina’s normal trading relations. I also mentioned our close cooperation at the Rio and Montevideo Conferences.

Our policy of strengthening relations with Argentina is criticized by certain sectors in the United States and, perhaps, by groups in Argentina. He agreed that this was true.

When I returned from my trip in September I was criticized for the obvious pleasure and satisfaction caused me by courtesies which he had so kindly extended me. When the Czechoslovakian steel mill was exported from the United States to Argentina these same groups were very active in their criticism of the United States administration for permitting such an export.

Our own policy with respect to these anti-Argentine groups will be to seek opportunities to demonstrate the importance which we attribute to closer cooperation between us and to seek opportunities to dispel misapprehensions and misunderstandings which can obstruct our policy of bringing the two nations closer to each other.

While I have been invited to stop off in several Latin American capitals in the course of my present trip I have declined to do so and, instead, have extended my trip to visit Buenos Aires, thus giving added evidence of the importance that we attribute to our relations.

The resumption of Export–Import Bank activity in Argentina will constitute another important demonstration of our current policy. The granting of the steel mill loan would be an excellent way for the bank to move back into this field. Announcement of that loan would undoubtedly provoke strong reaction from anti-Argentine sectors in the United States. As a leader of the Republican party Secretary [Page 484] Humphrey must, of course, take into consideration such criticism and, if possible, seek to avoid it. He felt and advised Minister Cafiero that if the announcement of a loan by the Export–Import Bank could be coordinated with some move on the part of the Argentine Government it would do much to weaken the position of anti-Argentine critics in the United States.

I stated that I did not feel that this was a condition to the granting of the steel mill credit; that I would support the granting of that credit regardless of Argentina’s taking any reciprocal move; that I was confident that the President would make all such moves that he could and as rapidly as possible. On the other hand, I repeated that if some step could be taken at this time by the Argentine Government it would be helpful to us.

The President said that he was ready to extend to old investments the benefits heretofore accorded only to new investments by the present law on remission of profits.5 He asked if this would serve the purpose that I had in mind. I said that I felt it would. He said that he would give instructions that this be done immediately.

Thereupon he called Secretary Gómez Morales,6 Minister Cafiero, Minister Remorino, Chief of Protocol Bernini,7 Captain Renner, as well as Ambassador Nufer and Mr. Atwood. He stated his decision described above. There followed a general discussion of the subject and agreement that necessary amendments to the existing law would be submitted to the President’s special session of congress.

The President stated that if I wanted to do so I could publicly announce his decision.8

  1. Drafted by Mr. Holland; this conversation took place at President Perón’s summer home in Olivos. Mr. Holland was in Argentina between Dec. 4 and 8, 1954.
  2. In a memorandum of conversation between the heads of the U.S. Delegation to the Rio Economic Conference, drafted by Mr. Cale and dated Dec. 2, 1954, Mr. Holland is recorded as having stated that he would be happy to go to Argentina if there was agreement on specific objectives he should seek, and Under Secretary Hoover is recorded as having replied “that he was inclined to the view that Mr. Holland should make the trip even though it may not be possible for him to get any definite action taken by the Argentine Government while he is there.” (OAS files, lot 60 D 665, “Memoranda of Conversation”)
  3. Homer E. Capehart (R.–Ind.), Chairman, Senate Banking and Currency Committee.
  4. Clarence B. Randall, Chairman, President’s Commission on Foreign Economic Policy, 1953–1954, and subsequently Special Consultant to the President for Foreign Economic Affairs.
  5. From mid-1947, American-owned business firms in Argentina were not permitted to make profit remittances, with the exception of about a 7-month period during 1950–1951.
  6. Alfredo Gómez Morales, Argentine Secretary for Economic Affairs.
  7. Federico A. Bernini.
  8. In a memorandum of conversation with President Perón, dated Dec. 8, 1954, Mr. Holland stated that he had indicated to President Perón that it would appear presumptuous for a foreigner to make statements about Argentine internal matters, and that both President Perón and Secretary Gómez Morales, who was present during the conversation, assured him that they would make the appropriate announcement “before the first of next week.” (Holland files, lot 52 D 295, “1954–1956”)

    On Dec. 14, Secretary Gómez Morales announced in a press conference in Buenos Aires that the government was considering the matter of profit remittances. In despatch 647, from Buenos Aires, dated Jan. 21, 1955, the Embassy informed the Department of State that on Jan. 19 the Argentine Government had issued Decree 637, which permitted foreign-owned mining and industrial enterprises to remit profits, if earned after Aug. 23, 1953, up to 8 percent a year on their invested capital (800.05135/1–2155).