811.05135/8–2653
Memorandum of Conversation, by the Officer in Charge of River Plate Affairs ( Dearborn )
Subject:
- Problems of International Packers in Argentina and Uruguay
- Participants: Mr. Thomas Taylor, International Packers
- Mr. Guy Whitney, International Packers
- Assistant Secretary Cabot
- Mr. Cottrell (OSA)
- Mr. Dearborn (OSA)
Mr. Thomas Taylor and Mr. Guy Whitney of International Packers called on Mr. Cabot this afternoon to discuss the problems of their company in Argentina and Uruguay. Mr. Whitney said he had been on leave in the United States since last May and planned to be back in Buenos Aires August 31.
Mr. Taylor asked about US-Argentine relations since the visit of Dr. Milton Eisenhower to Buenos Aires. Mr. Cabot replied that they had improved and that certain concrete steps had been taken by the Peron Government which were favorable to us. He remarked however that he wished confidentially to say that while he hoped we could take advantage of Peron’s apparently friendly disposition to work toward basic improvements, in view of Peron’s past performance we could not be certain that we were permanently heading for such improvement. For the time being we wished to encourage Peron in his present attitude and we did not wish to take any steps that would induce him to revert to his anti-US position. Mr. Whitney said that this view seemed to him a very good one.
Mr. Cabot went on to say that since we were still unsure of our ground he questioned whether we should push Peron too hard. For this [Page 1565] reason he thought it might not be a propitious time for our Embassy to make representations on behalf of International Packers. He made it clear that the Department wished to do all it could to assist the packers but that timing would be most important. Mr. Taylor agreed with this point but said that the situation was now so serious that the packers did not feel they had much time left. He amplified his remark by describing something of their difficulties. He said that his firm had been through some difficult times in Argentina during the past six years but that it had always been able to reach some agreement with the Government through friendly negotiations. He said, however, that at no time had the situation been as serious as at present and that in fact the company could not continue much longer under present circumstances. Their losses had never reached the high figure of $60,000,000 pesos which was where they were now. The situation was particularly discouraging because the packers were now unable to see the necessary high level officials who were in a position to help them. Furthermore about two weeks ago all the accountants on the Meat Board had been dismissed on the charge that they had given information to the packers. The packers’ relations with the government and their general situation was at a dead center and it was most important to make progress toward a solution of their problems. Mr. Cabot replied that the Department would send a telegram to Ambassador Nufer advising him that Mr. Whitney would call on the Ambassador early next week and requesting the Ambassador to assist the packers in any way he thought would be helpful. He explained that Ambassador Nufer would be the best judge of what could be done at any given moment. Mr. Taylor and Mr. Whitney were obviously pleased by Mr. Cabot’s offer to send this telegram and said they would appreciate it.
Mr. Taylor then brought up his firm’s difficulties in Uruguay. He said he and Mr. Whitney had just had lunch with Ambassador Mora who had always been helpful. The Ambassador had assisted them considerably last April in obtaining action from the Uruguayan Government toward the payment of its debt to the packers. However, after Ambassador Mora left Uruguay to return to the US the company’s relations with the Government had deteriorated. They had operated in Uruguay for many years and their relations with local officials had always been good but during the past year these relations had deteriorated greatly. Mr. Whitney was highly critical of the present Uruguayan Government and said that under it the country was being ruined through mismanagement and a program of subsidies which the economy could not stand. Mr. Taylor stated that the US packers were particularly disturbed by a recent decree which failed to grant them their traditional export quota. This he said was apparently retaliation by the NEC against the plants for having closed down. Mr. Taylor felt [Page 1566] very strongly on this question of the quota and said that the US packers had a right to expect their traditional proportion of exports. In this connection he stated that the Castro interests had been assigned the amount taken from the US packers.
Mr. Taylor remarked confidentially that he was informed that the Eximbank had received an application for a loan to finance canning equipment for the Castro interests and that Uruguay had an application for a loan before the IBRD at the present time. He thought the treatment of the US packers should be considered in connection with the position taken by the US on these loans. He was particularly emphatic with regard to the canning equipment application because he said International Packers already had very large facilities of this type in Uruguay and that the country had no need for more than was already there.
Mr. Cabot said he was sorry to hear that things were going so badly in Uruguay generally and with the US packers in particular. He asked what our Embassy had been doing to help. Mr. Taylor replied that he has just received a telegram from his people in Montevideo to the effect that the Embassy was reluctant to take up the matter of the quota with the Government since the US packers had “voluntarily” closed down from January to May. Mr. Taylor took vigorous exception to the Embassy’s use of the word “voluntarily” and pointed out that that was hardly the word since the plants had closed because they could not afford to keep open. He said they had borrowed all the money they could borrow in Uruguay to operate as long as they had. With reference to the application for canning equipment before the Eximbank Mr. Cabot asked Mr. Dearborn to look into the matter and said that unless there were aspects to the case that had not yet appeared he thought we should prevent such a loan from being authorized since it would run counter to the very purpose of the Bank’s existence. He suggested that Mr. Dearborn also look into the applications that the Uruguayans might have before the IBRD to determine what our position should be with respect to them in the light of Uruguay’s treatment of the packers.
Mr. Cabot said he thought the Uruguayan Government should be directing its efforts toward growing more cattle and sheep rather than toward increased industrialization of the cattle industry. Messrs. Taylor and Whitney were in full agreement. Mr. Cabot also expressed the view during the conversation that in his opinion American business abroad had a duty to carry on a public relations program designed to explain to local populations how the latter were benefiting from US investments. He pointed out that many US firms abroad were suffering today because of their failure to pay more attention to public relations. He made clear that he was not criticising International Packers but was stressing the importance of the subject in general. Both Mr. Taylor and [Page 1567] Mr. Whitney concurred and said that they were endeavoring to work out a plan which would improve their relations with the Uruguayan Government and public. Mr. Cabot suggested that the problem was one of importance to all US business abroad and he thought something might be worked out through local American Chambers of Commerce.