542. Memorandum of a Telephone Conversation Between A. Thomas Taylor of International Packers, Inc., and the Assistant Secretary of State for Inter-American Affairs (Holland), Washington, June 15, 19551
- Uruguay—Meatpackers Negotiations
Mr. Holland telephoned Mr. Taylor to inquire about the status of the meatpackers negotiations in Uruguay.2 Mr. Taylor said he had had a long conversation this morning with their manager down there and they have been having meetings with the President, the Minister [Page 1088] of Finance3 and the Minister of Livestock.4 They are working toward a deal. Mr. Taylor said they are making compromises in order to consummate something before it is too late. He said roughly 150,000 head of cattle is the figure set and the FMI would not participate—it would rule them out of participating in this export. Mr. Taylor said that Castro, a little local packer who has been working his way into a percentage of this deal, would have to be taken care of, and that Castro will get 14 of the 150,000.
Mr. Taylor said that one bad feature about the arrangement (and if they can get over that hurdle they would have acceptance of the arrangement) is regarding the payment of the subsidy currently as they produce and ship, because at the official rate of 1½ pesos to the dollar or equivalent in sterling they would only recover 50 of the value of the beef they ship and would be carrying the baby representing the subsidy on the export of beef. They would be exporting at a loss of 5,600,000 pesos. They want to be reimbursed as they go along since it would take $3 million to finance the deal from up here. He said this was the sticking point at the moment.
Mr. Taylor said that Mr. Hamm, their manager, is having another meeting with the President and the Minister of Livestock this afternoon and will cable Mr. Taylor tonight about what they have worked out.5 He said they have to have assurances that they will meet their losses currently. He said that the Council’s group agrees that it should be currently—they all agree to that—but they haven’t been able to come up with a solution as to where the money will come from. Mr. Taylor said that by noon tomorrow they should know how it came out.
Mr. Holland asked if Mr. Taylor felt this was a definitive meeting or whether there might be others. Mr. Taylor said that it was definitive; that if they don’t get something they can work out on a compromise basis they will probably have to close their doors. He said they would dislike to do this because if they remain closed for a year the Uruguayans may feel they can get along without them.
Mr. Taylor said if somebody up here could make a gesture along financial lines it would be helpful. Mr. Holland asked him pointblank if he meant a loan and Mr. Taylor said he did.[Page 1089]
Mr. Taylor said he would keep Mr. Holland advised of developments.6
- Source: Department of State, Holland Files: Lot 57 D 295, Miscellaneous. Limited Official Use.↩
- American meatpackers were operating under a system which included numerous government-imposed restrictions upon private packers, who were in competition with a government-sponsored slaughterhouse, Frigorífico Nacional. Meat processing was being held in abeyance while the private packers were seeking a more satisfactory exchange rate for foreign exchange earned from their export operations which had to be converted through the Bank of the Republic at fixed rates. They were also requesting written confirmation of the government’s obligation to pay debts owed the private packers. Additional documentation on the subject is in Department of State, Central Files 411.3341, 811.05133, and 832.311.↩
- Eduardo Acevedo Alvarez.↩
- Juan T. Quilici.↩
- A memorandum of June 16 from Holland to Edward J. Sparks indicated that Taylor called Holland the next morning and advised him that the packers were about to reach an agreement with the Government of Uruguay which would permit the companies to reopen their plants. (Department of State, Holland Files: Lot 57 D 295, Miscellaneous)↩
- Agreement was reached in early July 1955, and the packers reopened their plants.↩