Foreign Relations of the United States, 1958–1960, American Republics, Volume V

160. Despatch From the Embassy in Argentina to the Department of State ¹

No. 792

Buenos Aires , November 20, 1958 .

REF

• Embtels 662, Nov 10; 669, Nov 11; 672, Nov 11; 674, Nov 12; 678, Nov 12; 680, Nov 13; 681, Nov 13; 682, Nov 13; 683, Nov 13; 693, Nov 13; 706, Nov 14; 702, Nov 14; 715, Nov 17; 716, Nov 17; 725, Nov 18; 741, Nov 19; 747, Nov 20.²

SUBJECT

• Ten Days in Argentine History³

Frondizi was elected to preside over a country which was divided within itself. Politically, the country was divided between Peronists and anti-Peronists. The same division existed in the labor field. Frondizi received more than 1,000,000 Peronist votes. He received those votes as the result of an agreement reached by Rogelio Frigerio (presumably on Frondizi’s behalf) with Perón.

There were conditions attached to the reported agreement which included such things as reintegration of Peronist members of the Armed Forces and restoration of the legality of the Peronist Party, which few people thought Frondizi had any serious intention of carrying out. He has in fact made no effort to carry out those conditions.

It was in the cards, however, that he would give this large sector of the population that had voted for him an opportunity to have some representation or voice in his administration. Frigerio, who was the go-between with Perón, although not a Peronist himself, became a kind of super-economic minister. Considering the size of the Peronist vote, the representation given to Peronism in the regime is believed to date to have been a minimum one.

It was in the cards, also, that Frondizi would try to rally the Peronist masses behind his Government. This was the democratic thing to do and it was also a proper political objective. Frigerio had an important role in this effort, too. In fact, he headed the effort.

Frondizi tried to rally the Peronists principally through wooing the Peronist labor leaders. He thought that 1) those leaders could probably muster majority votes in most unions; 2) they would be grateful to him and subservient to his wishes (he and Frigerio envisaged a single labor confederation which the Government would “control”); and 3) they would bring the labor unions into political support of the administration.

While Frondizi was cultivating the Peronist (and ex-Peronist and neo-Peronist) labor union leaders (the “democratic” union leaders owe limited allegiance to other political groups), he was refraining from ‘openly antagonizing the Peronist political leaders although it should be noted at this point that the ban on the Peronista Party has never been lifted. He was also mild in his attitude toward the Communists.

Some persons alleged that Frondizi was appeasing the Peronists and a case can be made to substantiate this allegation. As a matter of fact, it can be stated fairly accurately that Frondizi during the first five months of his administration has appeased most of the important sectors of the population, especially sectors in a position to exert political pressure on his administration. One of the evident purposes of his appeasement policy has been to gain time to get his economic program (particularly petroleum and electric power) started.

The policy of appeasing the Peronists and of at least tolerating the Communists received a rude shock when the Peronist-dominated Mendoza branch of the National Union of Petroleum Workers went out on strike for the avowed purpose of forcing the Government to amend contracts it had negotiated with American petroleum companies.

The Mendoza strike was quickly followed by the threat of the National Union to declare a series of nation-wide strikes with the same objective.⁴ In addition, the sixty-two groups of Peronist unions decreed a 48-hour general strike to begin November 20 in support of the Mendoza strikers and of a 1500 peso monthly wage increase for all workers pending revision of the labor contracts. (All these strikes and threatened strikes have now been ended or averted, it should be noted.)

These events shocked Frondizi into action and for the first time forced him to take a public stand against the Peronists and Communists. In the public mind, as well as apparently in the President’s mind, this marked the failure of the Frigerio policy of attracting the Peronist labor leaders to the support of the President’s economic program and of the President as a political leader. Frigerio submitted his resignation and it was accepted. This did not, so far as is known, indicate any change in the Government’s economic policies or in the President’s friendly relations with Frigerio.

The President placed his Government in a better position to resist union political pressure by declaring a state of siege which the Congress promptly confirmed. It was at this juncture that the Gómez incident occurred.⁵

The total background of that incident has not yet been revealed but it seems evident that Vice President Gómez, an orthodox party politician, not only dissented from the President’s policies in both the economic and political fields but was trying to rally support for his own dissenting views, and that he was given reason to believe that the crisis with which the Frondizi regime was faced (including a severe attack of grippe from which Frondizi was suffering) furnished the opportunity to force Frondizi to bring representatives of opposition political groups into his Government, and through this device to effect a revision of the Frondizi regime’s policies.

While these events were transpiring a mission from the International Monetary Fund arrived in Buenos Aires and started to work. The Argentine Government is literally broke, and inflation is making the economic, political and social difficulties of the Government more serious every day. Argentina sorely needs short-term as well as long-term credits to tide the country over until the benefits of Frondizi’s long-term economic policies, especially in terms of reducing foreign exchange expenditures for petroleum imports, can be felt.

The credits, it has been made clear, will not be available unless the inflationary process is contained or at least greatly reduced. That, in turn, will involve balancing the Government’s budget, and reducing consumption within the country. This means belt-tightening, in other words, and Argentines have never been very good at belt-tightening.

Many persons are predicting that a real austerity program will not be accepted by the people, including organized labor. Under the best conditions the difficulties in the way of carrying out an austerity program are many and serious.

Nevertheless, there would seem to be no alternative to trying to place into effect an anti-inflationary program which will induce the Monetary Fund to make short-term credits available and also open the road to additional long-term credits, and it is anticipated that Frondizi will announce such a program in the near future.

Whether or not the Government is in a stronger or a weaker position to push through such a program than it was before the events of the last ten days, remains to be seen.

Willard L. Beaulac

1. Source: Department of State, Central Files, 735.00/11–2058. Confidential. Drafted by Beaulac.
2. None of the telegrams under reference is printed. (ibid., 735.00) They provide the background and details of the incidents described in despatch 792.
3. November 10–20.
4. On November 11, having appealed unsuccessfully to striking oil workers to return to work, Frondizi decreed a state of emergency for a 30-day period. After issuing the decree, the administration had about 250 Peronists and Communists arrested in different parts of the country. (Despatch 758 from Buenos Aires, November 11; Department of State, Central Files, 735.00 (W)/ll–1158)
5. On November 12, Vice President Gómez, presumably in the hope of bringing about a change in government, informed the Minister of the Interior that the armed forces were plotting to overthrow the Government and suggested the formation of a coalition government to deal with the situation. The armed forces later denied any plans of a coup. Gómez, accused of planning a palace coup, was subsequently forced to submit his resignation. (Despatches 758 from Buenos Aires, November 11; ibid., 783, November 18; ibid., 735.00 (W)/11–1658; and 816, November 25; ibid., 735.00 (W)/ll–2558)