Office of the Historian

235. Memorandum of a Conversation, Department of State, Washington, April 18, 1957, 5 p.m.1

Washington, April 18, 1957, 5 p.m.

SUBJECT

  • Problems of American Investors in Argentina

PARTICIPANTS

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

Ambassador Vicchi referred to the problems of the meatpackers and A&FP. He noted that progress was being made with the meatpackers’ problem, but pointed out that settlement of past accounts was not as simple as it looked. Examination of accounts for the past ten years was no simple job. The Government would have to be careful in reaching an agreement for payments that are not based on a close audit of all records—itself time-consuming—because it could be accused of “deals”, corruption, and the like.

He noted also political difficulties involved in settling A&FP claims, particularly in appearing to by-pass the courts. He said that the Government now proposed that judicial litigation proceed, and that in the meantime a mixed commission be established to set valuations which would be adjusted later, if need be, once the judicial decision is known. The company, however, had rejected this plan. Mr. Bernbaum pointed out that the company was concerned because this plan could mean that the matter might not be decided for years if the judicial decision is to be the final word, and noted the large number of individual suits that would have to be initiated, a fact of which the Ambassador seemed unaware. The company [Page 470] could not operate in this climate of uncertainty for long. He pointed out also that the question of what basis to use for valuation of assets was a real problem, since the courts traditionally used historical cost. The Ambassador acknowledged this would be a problem.

The Ambassador then said that when he returns to Argentina he hopes to get into this matter and perhaps foster a solution. He wondered, for example, if some type of arbitration, clearly above reproach, could not be set up. Mr. Bernbaum said he thought the company would agree to arbitration, and then described how the matter of reaching a settlement had almost been resolved and then spiked apparently by Minister Alconada. The Ambassador merely nodded, but seemed unaware that agreement on a method had at one time been so close.

Mr. Bernbaum pointed out that these problems had become entwined with the matter of loans and credits, and recalled the negotiations a year ago pointing out that Mr. Brand had stuck his neck out in assuring officials of the US Government that outstanding problems would be resolved. It was, therefore, extremely embarrassing to find little or no progress in these matters. The Ambassador said he understood, but again made the argument that while the Government and many other people wanted to do the right things, many others adopted a nationalistic attitude and one opposing closer relations to the US. It was, therefore, important for the US to strengthen the elements friendly to it, to permit them to gain sufficient power to do the right things.2

  1. Source: Department of State, Central Files, 811.05135/4–1557. Confidential. Drafted by Vaky.↩

  2. On April 23, Vicchi spoke with Rubottom and Vaky about the meatpackers’ and A&FP problems. A memorandum of that conversation, drafted by Vaky, reads in part as follows:

    “The Ambassador stated that problems such as the A&FP indemnity claims and the meatpackers’ accounts would be solved, and noted progress in the latter case. He asked that we keep in mind the nature and friendliness of the present regime, its desire and attempt to move along the right path and its need for a helping hand financially, and that we reflect on the value of not being too inflexible in the criteria we set up for aid. He asked that at least we not take an irrevocable policy decision but be prepared to continue discussions and consideration on such matters, and we could see what might develop. Mr. Rubottom stated that he could say confidentially that Mr. Brand would be going to Argentina about May 1 for a few days.” (Ibid., 835.10/4–1057)

    Brand’s planned trip was subsequently postponed.

    ↩