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

232. Memorandum of a Conversation, Department of State, Washington, April 10, 1957, 6 p.m.¹

Washington, April 10, 1957, 6 p.m.

SUBJECT

• Argentine Need for Economic Assistance

PARTICIPANTS

• Argentine Ambassador, Dr. Adolfo A. Vicchi
• ARA—Mr. Rubottom
• OSA—Mr. Vaky

The Ambassador asked Mr. Rubottom what his impressions were of Gainza Paz’s talk with President Eisenhower. Mr. Rubottom described the conversation very briefly, stating that Dr. Gainza Paz had explained the need for economic assistance, the problems facing the present Argentine Government, and had presented these matters very well. The President had told him that sympathetic consideration will be given to the situation and had suggested that he (Gainza Paz) talk to the Secretary or Acting Secretary, Mr. Black of the IBRD, and other officials in Washington.² Mr. Rubottom had stressed the fact that during the past year or so there had been virtually no progress on key problems, and that while the US was sympathetic to Argentina’s situation it was handicapped in what it could do as long as Argentina did not do the things it had to do and which no one else could do for it. Gainza Paz had recognized this and had said he himself had criticized the Government on the same score.

The Ambassador then said that he wanted to comment generally on this subject but first with respect to electric power, which was a critical field, there were two distinct aspects. One, he said, was the question of new concessions. Policy in this regard was a delicate internal and even political matter, and the present regime, which was after all a de facto Government, felt that it could not take a basic decision on a point as controversial as this. The problem should be submitted to public debate so that the wishes of the people could be expressed through an elected Government. It was not probable, therefore, that this regime would be able to do much in that regard. The second problem dealt with ANSEC and compensation claims. This problem required no debate, the solution was a clear responsibility of the present Provisional Government, and that regime would solve it. He said the Las Varillas intervention was an error and the Argentine Government would have to do something about it.³

Turning to the general picture, the Ambassador said that Argentina needed assistance. It turns to the US. He said he was making a plea that, in considering what it can do, the US not apply too rigid a criteria or look at the problem solely as a banker. The US, he stressed, had a political interest in seeing the present Argentine developments continue. The present Government wanted to move closer to the US. There was an increasing trend in Argentina in that regard. But the Government could not do all it wanted to do at present, because the political and internal situation was still one of transition. He seconded Dr. Gainza Paz’s description of the people as having been virtually brainwashed by the Perón regime.

The US had a great opportunity, he said, to help consolidate in Argentina these elements which were advocating democracy, free enterprise, and international cooperation. The present Government had to show progress in meeting urgent problems or people would turn to other alternatives and extremist solutions. If the US did not lend a helping hand to its friends who now needed it, it would be undercutting the very elements most friendly to it.

The Argentine Government could not be expected to do the politically impossible even if it was economically desirable. It would take time to consolidate, educate and move step by step. The Ambassador likened Argentina’s situation to that of Mexico in 1917 when turmoil and extremist solutions were offered. Mexico, however, in some 20 years had moved gradually to stability and away from collective, statist economies. And Argentina, he pointed out, was beginning from a much less extreme position.

It was not, the Ambassador went on, as if Argentina had done nothing. He noted that this Government had reversed Perón’s isolationism, had ratified the OAS charter, adhered to the Caracas resolution and generally taken a more active part in international organizations. It had increased military cooperation with the US, and was considering a military pact. If it was up to Aramburu, he said, Argentina would have had one by now. In economics, it had done away with many of the artificialities of the previous regime. Many favorable economic steps had been taken. He recalled the great problem of Kaiser and how this had finally been resolved. As far as he knew Kaiser was very happy about its present situation. Argentine would, he said, continue to move in the right direction as rapidly as it felt it could. But it would be a mistake to try and push it too far too fast.

Mr. Rubottom said that all these factors were appreciated. He said, however, that he had to repeat again and again that the US could judge what aid it might give only in terms of how much progress Argentina was making in solving its problems. He noted that since the Coll Beneges mission there had been virtually no progress on important problems, and with respect to problems of American investors, such as ANSEC, even retrogressions, such as the Las Varillas case, seemed to occur. He said he felt that relations between the two governments and the peoples of the two countries were closer than they had been in many years, and this must be nurtured. He said, however, that while the US would move ahead and do what it could it must look to Argentina to move with it. It would be fallacious and tragic, for example, for Argentines to shift responsibility for failure to solve their problems to the US, because it was only in Argentina that these matters could be worked out. The Ambassador said that he agreed with that. Mr. Rubottom emphasized that the US could only help Argentina help itself, but had to look to Argentina to take its own steps.

Dr. Vicchi said that he could understand this and would certainly not expect the US to condone arbitrary actions nor to finance monopolies or things contrary to its general policy. He was in effect asking that the US not tie too many and too rigid strings to aid, not expect Argentina to move in exact tandem with the US because the Argentine Government had serious political problems and had to adjust the economically desirable to the politically possible. The US should recognize, however, that the present government was a friendly one trying to do the right things; that in time the trend would carry the day.

Turning to a specific item he mentioned that both General Electric and Westinghouse wanted to bid on the superusina and San Nicolas plant, but would need Eximbank financing to do so. His Government, however, understood that the Eximbank would not loan another cent to Argentina until the ANSEC compensation problems were solved. This, his Government felt, was too severe, and he wondered if this in fact was the position of the US Government. Mr. Vaky pointed out that while he could not speak for the Eximbank, the policy had in the past been not to finance projects for which private capital was available. An offer by GE or Westinghouse to build an electric plant for the Government was not the same thing as private capital offering to invest in such facilities. The Ambassador said he appreciated this distinction. He said, however, that he must inform his Government what the attitude of the US would be toward assisting Argentina, whether austere, unbending, requiring strict quid pro quo action (coacción). He hoped, he said, it would be reasonably generous and aid adjusted generally and comprehendingly to what Argentina was doing and progress being made. To adopt an attitude, however, such as not doing anything else until ANSEC problems were solved was bound to be resented. He asked that we take time to consider these points as he would like to discuss the matter further.

1. Source: Department of State, Central Files, 835.10/4–1057. Confidential. Drafted by Vaky.
2. On April 19, Gainza Paz met with Dulles and Rubottom and offered an analysis of Argentina’s financial difficulties similar to that which he presented to Eisenhower on April 10. (Memorandum of conversation by Rubottom, April 23; ibid., 835.10/4–1957)
3. Earlier that month, the Argentine Government issued an intervention decree regarding an ANSEC-owned power plant in Las Varillas. Beaulac transmitted a memorandum of conversation concerning this matter to the Department in despatch 1250 from Buenos Aires, April 15. (Ibid., 835.2614/4–1557)