153. Memorandum of a Conversation, Plaza Hotel, Buenos Aires, August 23, 19571



  • United States
  • Deputy Under Secretary Dillon
  • Assistant Secretary Rubottom
  • Stanley D. Metzger
  • Latin American Countries
  • José Maria Alkmin, Finance Minister of Brazil and associates
  • Antonio Carillo Flores, Secretary of Treasury, Mexico


  • General Economic Agreement

The discussion dealt with the basic problem facing the Conference whether there should be a treaty or a declaration on general economic principles.

[Page 533]

Brazil stressed the importance of a treaty, but emphasized that it could not accept the provision with respect to just compensation in the event of expropriation of private property unless it was made clear that the Brazilian constitution was supreme in the matter of determining what constituted just compensation. Mexico was, if anything, even stronger on this point. Both countries recognized that this created grave problems for the United States but Brazil particularly nevertheless hoped that a treaty could be formulated which would omit controversial items such as this one.

The United States Delegation doubted that any agreement omitting an important element in the economic relations among the American States could properly be called a general economic agreement, and foresaw serious problems of ratification of such an instrument by the United States Senate, or indeed, by the legislatures of some other countries represented in the Conference, and would require deep study by Washington. Mexico stated it believed a treaty was impracticable because of the nature of the differences of view on such matters as this one.

The United States inquired just what was the reason for the belief on the part of some that it was necessary to have a treaty rather than a declaration. The Brazilian Minister stated, without much force or conviction, that there was a feeling that if a treaty did not emerge the Conference might be deemed to have failed—a declaration was a “down-grading” of a treaty.

At this point the United States recounted the history of attempts to negotiate a treaty since 1948, including the failure of IA–ECOSOC to negotiate, the reference of the matter to the Secretariat, the willingness of the United States to participate in the necessary preliminary work which should have preceded this Conference. It was pointed out that there was no use in our kidding ourselves. It was extremely difficult if not impossible to negotiate a meaningful treaty in this field. Mexico and Brazil agreed that the IA–ECOSOC had not negotiated, and that they also had been prepared to participate in a preliminary conference; Brazil stated they thought the reason it was not held was because Argentina feared that if it were held, the Conference itself would not have taken place, because the preliminary discussions would have disclosed that the wide differences of view could not be sufficiently narrowed.

The United States Delegation distributed copies of U.S. Draft Alternative B, explaining that it represented our effort on the treaty side, and that it could quite easily be made into a declaration. The United States Delegation pointed out that such matters as the just compensation point could be handled, it was believed, satisfactorily to all concerned if it were a declaration rather than a treaty. It was also pointed out that, although the United States Alternative B draft [Page 534] contained no provision dealing with the problem of commodity price fluctuations, we were prepared to consider adding such a provision, which might be a modified form of Articles 11 and 15 of the latest Brazilian draft. (Minister Carillo Flores knew from earlier discussions that we were thinking of a mild provision.)

There appeared to be general agreement that the practicable solution to the problem was a unanimous declaration of principles, with Brazil stressing the necessity of coming out of the Conference with at least that much. There was also discussion concerning the best way of handling the failure to arrive at a treaty from the public relations point of view. It was stressed by Mexico and Brazil that public statements from now on should avoid high hopes or expressions of disappointment at the fact that a treaty might not emerge. Rather, it was believed that a failure of a treaty to emerge could be laid to pre-existing impersonal factors such as the constitutions of the various countries making it impossible for them to accept in treaty form certain kinds of commitments, rather than any new difficulties being created by the Conference itself. All acknowledged that the difficulties with which we were faced were of long standing.

The desirability of close cooperation among the three delegations in Committee I and outside of that Committee, both in the consideration of the treaty draft and in the formulation of a declaration, was stressed by all. Mexico, Brazil and the United States Delegations would consider controversial matters separately for use in a declaration.

  1. Source: Department of State, OAS Files: Lot 60 D 665, USDel/MC/1–23. Confidential. Prepared in the Delegation Secretariat. The conversation took place in the office of the Brazilian Delegation.