Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

231. Memorandum of a Conversation, The White House, Washington, April 10, 1957¹

Washington, April 10, 1957

SUBJECT

• Call of Dr. Gainza Paz, Editor of La Prensa, Buenos Aires, Argentina, on President Eisenhower

PARTICIPANTS

• President Eisenhower
• Mr. James Hagerty, the President’s Press Secretary
• Dr. Alberto Gainza Paz, Editor of La Prensa, Buenos Aires, Argentina
• ARA—Mr. R. R. Rubottom, Jr.

The President and Dr. Gainza Paz exchanged greetings with the latter stating that he was delighted to see the President again after having met him at Columbia University when he had been awarded one of the Maria Moors Cabot prizes in journalism. The President recalled this meeting and mentioned that he had given very careful consideration back in 1953 as to whether his brother, Dr. Milton Eisenhower, should go to Buenos Aires at the time of his trip to South America, primarily because of his great concern over the strong feeling in the United States against the Peron dictatorship and particularly his closing down of La Prensa and the imposition of such strict censorship. He added that he had finally decided that the trip might be worthwhile and that he gave his brother instructions to tell Peron that the best way for him to improve relations with the United States was to lift censorship against the three American wire services and restore La Prensa to its real owner.

Dr. Gainza Paz came to his point quickly, handing the President a letter from President Aramburu.² The President read the brief communication and told Dr. Gainza Paz that he was happy to welcome him on behalf of President Aramburu.

Dr. Gainza Paz related that he had lunched with President Aramburu on March 25, the day before his departure from Buenos Aires for the United States, and that the only others present were Vice President Rojas, and the President’s Press Secretary, a former member of the La Prensa staff. He reminded the President that he had never participated actively in politics in his country, that he was primarily an editor, but that he had agreed to accept this mission because of its great importance to his country. He said that Argentina was at the most important moment of its history and that its people would soon take a decision which he hoped would permanently restore a democratic system in the country. He said that in a way it was unfortunate that the Argentine people had not had the searing experience of a devastating war, such as the people of France and Italy had gone through, because it might be easier for the Argentines to take some of the difficult but necessary steps to restore democracy in their country with both economic and political freedom. He pointed out that, following 12 years of Peron rule, the Argentine people really needed a “brainwashing” in order to restore their capacity for self-dependence and orderly thinking.

Dr. Gainza Paz said that Peron left the country in an economic shambles. He said that the country desperately needed economic help at this time. President Aramburu as well as Vice President Rojas, representing the two major armed forces of the nation, both genuinely want to relinquish their responsibilities to a constitutional government, even though there are some close advisers who would prefer that the upcoming elections be postponed. The constituent assembly election has been set for next July and the general elections will be held in February of 1958, with the Aramburu Government turning over its powers to the duly elected authorities on May 1, 1958. Dr. Gainza Paz stressed that even though there is a provisional government in his country, the democratic way of life is being restored. The press is free, the people are free to meet as they please and to say what they please; he alluded to a recent meeting of the Frondizi faction of the Radical Party when, due to rain, the public address system of the Frondizi group had broken down, the police stepped forward to offer their own public address system to help the politician carry out his planned public meeting.

Dr. Gainza Paz changed his pace at one point to intersperse the remark that the President and Vice President of his country both were prepared to enter into a military defense agreement with the United States if we desired it. The President noted this statement with interest and with a nod of his head but without specific comment.

The President, upon indication by Dr. Gainza Paz that he had finished his exposition, asked several questions, first, respecting the literacy rate in Argentina. Dr. Gainza Paz said that Argentina had the highest literacy rate in the Americas except for the United States and Canada. To the President’s question about the relationship of agricultural and industrial development, he said that Argentina had always relied on its agriculture as a prime producer of national income but that under the Peron regime there had been great emphasis on industrial development at the expense of agriculture. He said that this had turned out to be very expensive because of the need to import many of the raw materials for various industries, such as iron ore. To the President’s query as to Argentina’s most urgent requirements, Dr. Gainza Paz referred first to the great need to rebuild the country’s public transportation system and expressed appreciation for the loan of the Export-Import Bank of $100 million, of which about $56 million has already been obligated for the purchase of transportation equipment.³

The President thanked Dr. Gainza Paz for his detailed exposition of the problems facing Argentina today and assured him that the United States was tremendously interested in the effort of the Argentine people under President Aramburu to restore an orderly, democratic, constitutional form of government. He said that nothing had pleased him more than the removal from the American scene by the Argentine people of the Peron dictatorship.

The President said that he and the U.S. people felt strongly that the free enterprise system had been proven to be the best system on which to base a nation’s economy. He felt that private capital should be allowed to do the job and that private capital would do the job if given an opportunity and if the economic climate was sound. He said that there were many ways in which the United States could help Argentina, such as through Export-Import Bank loans, and by supporting World Bank loans—but the best way was through utilization of the vast private capital resources of the United States which were available for foreign investment under proper conditions. Dr. Gainza Paz said that he agreed entirely with the President and that, in the luncheon he had had with his own President and Vice President on March 25, he had stressed the need for Argentina to establish conditions which would permit private capital to come in and help rebuild the nation’s economy. He said that he had been very critical of some of the steps taken by the provisional government as well as its failure to do some things which he had thought it necessary to do. He said that his newspaper, La Prensa, had maintained a critical attitude toward the government’s inactivity in certain important fields of action. Nevertheless, he said, the political situation in Argentina was so important to the United States at this strategic moment of history in view of the friendly situation which exists there at this time that we should not fail to move in with substantial support to take advantage of this opportunity.

The President inquired as to what other urgent needs Argentina was facing at this moment and was told that the country also needed replacements for its industrial machinery. The President challenged this statement in the face of Dr. Gainza Paz’s earlier mention of the over-emphasis on industrial expansion and the need to import raw materials, but was told that these industries still needed to operate and that, with new machinery, they could operate more efficiently.

Mr. Rubottom asked Dr. Gainza Paz about the electric power industry which he said he had understood was in almost as critical condition as the transportation industry. Dr. Gainza Paz acknowledged that the electric power problem was a very serious one for his country and that his government had not moved with the alacrity that it should have to solve it, particularly insofar as taking advantage of the opportunity offered by the American and Foreign Power Company to help in the job of rebuilding the industry. Mr. Rubottom pointed out that the Argentine economic mission last summer had done a splendid job in presenting that country’s economic needs and had been received here most sympathetically. He went on to say that those officials of the United States in a position to be most helpful to the Argentines have been greatly disappointed in the failure of the Argentine Government to take some urgent but constructive decisions which would enable private investment to come in to help rebuild the country. On the President’s inquiry he was informed that American and Foreign Power had been in Argentina for many years, that many of its properties have been expropriated under the Peron regime, and that it had not yet been paid for the expropriated properties although it had offered to reinvest the indemnification, once it was paid, in Argentina and to bring in substantial new amounts of capital for the building of the new power plants. Dr. Gainza Paz stated that his government had indeed failed to do what it should have done in this field and that he was quite certain that they would settle the American and Foreign Power problem satisfactorily.

The President suggested to Dr. Gainza Paz that he take advantage of his visit to the United States to confer with the Secretary of State and other officials in the State Department and that he also discuss the problems which face his country with the officials at the Treasury Department, the Export-Import Bank, and possibly the World Bank. He assured Dr. Gainza Paz that the United States would carefully consider President Aramburu’s request for financial assistance. Dr. Gainza Paz pointed out that Argentina would probably use up all of its dollar and gold reserves by the end of this year, hence the need for treating its requests for financial assistance urgently.⁴

1. Source: Eisenhower Library, Whitman File, International File. Secret. Drafted by Rubottom. A somewhat different version of this conversation, which bears no indication of a drafting officer, is ibid., DDE Diaries.
2. In the letter, dated March 25, Aramburu stated that he considered the visit of Gainza Paz to be a “direct and personal contact” which “may render benefits to the Americas and for our two countries.” (Ibid., International File)
3. On February 15, the Export-Import Bank announced the signing that day of a $56.15 million loan agreement with Argentina to assist in the purchase in the United States of transportation equipment. The agreement was signed in Washington by Waugh and Vicchi. The loan was to be drawn under the $100 million line of credit earmarked for Argentina by the Bank in September 1956.
4. In telegram 1085 to Buenos Aires, April 16, the Department summarized Eisenhower’s conversation with Gainza Paz. (Department of State, Central Files, 835.00/4–1657)