149. Telegram From the Embassy in Paraguay to the Department of State 1

297. Pass Eximbank from Bernbaum. VP, Beaulac, Rubottom and Waugh had hour meeting with Frondizi at Los Olivos Saturday evening.2 Also present were Minister Delegate Carril, Commerce Secretary Oefila, San Martin, Frigerio, and Mazar Burnett. Latter apparently close to Frondizi and rumored to be named important post.

VP said inaugural speech was impressive, referred to useful talk on general principles held Wednesday;3 stated desire discuss concrete matters such as ANSEC case and government oil which had been raised at earlier press conference. Said had told press that ANSEC matter was between government and company and refrained from commenting. Respecting oil had publicly reiterated US Government policy not to loan where private capital available. Nevertheless realized gravity of problem for Argentine Government and noted President intention participate personally in YPF direction. Suggested examination of sectors where loans feasing [feasible?].

Waugh described what EXIM Bank had loaned Argentina, said was ready to loan more provided country had capacity repay which in turn determined by government policy toward power and oil problems.

President repeated line that decision by EXIM Bank on Rio Turbio needed urgently since French now ready finance that project. Waugh outlined main points of engineer’s recommendations and stated EXIM Bank ready to consider application if Argentine Government prepared reduce project to $13–15 million outlay.

Vice President recalled Waugh’s proposal to send EXIM Bank mission if agreeable to Argentines and suggested they consider sending mission to Washington later for purpose consulting US Government and financial community.

Frigerio who only Argentine to speak besides President spoke up that missions would be satisfactory but they needed to know US attitude toward loans to Argentina since need urgent. Stressed that government anxious to get out of uneconomical business and said prepared move ahead with Rio Turbio project on reduced scale as recommended by EXIM Bank mission. Waugh said Bank ready to do business.

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Frondizi declared that country would progress rapidly if US showed understanding. They want US goods and machinery which is better and cheaper. If Argentina does not get help from US it will have to turn to Italy, France, Japan and “other countries” which are making offers. Argentina has resources, it will go ahead, it can repay eventually, but it needs loans now.

Waugh suggested US could not provide everything needed and that Argentina should accept loans from other sources.

Vice President Nixon recalled significant statement made by Frondizi at Wednesday meeting that whereas loans must be repaid private investment stays on and works for country. Understood ANSEC and meat packing problems being discussed with Embassy but declared that their settlement would clear air for other potential investors. Mentioned that speech on May 1 had raised hopes including those of prospective investors and that prompt action now by government will carry great weight.

Frondizi replied he would try to move ahead. Said had been ready to settle ANSEC month ago and so informed Ambassador Beaulac, but provisional government had backed away.

Vice President asked whether we could expect a solution now. President replied “we will make the effort required to settle the problem. It will take longer now because of the need for Congressional approval”. Rubottom asked about World Bank and President replied they were disposed to use its facilities.

Waugh suggested the problems facing Argentina were of such magnitude that financing from all possible sources in addition to EXIM–IBRD from countries in Europe with which they trade.

Vice President referred to President’s excellent statement in speech “the aim of economic policy will be to better employ the productive resources as the only effective means to obtain the highest possible standard of living.” Then added that problem is to eliminate obstacles including those imposed by governments.

President replied that he had tried to synthesize main problem that way. He had observed understanding attitude on part of US businessmen and hoped for even greater understanding from US Government.

Vice President concluded by wishing President success in his task and observing that the Argentine people and government could not have been more generous and helpful during his visit.

Ploeser
  1. Source: Department of State, Central Files, 835.10/5–458. Confidential; Priority. Repeated to Buenos Aires.
  2. May 3.
  3. Apparent reference to the meeting between Vice President Nixon and President-elect Frondizi on April 30; see Document 146.