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

196. Memorandum of a Conversation, Department of State, Washington, June 30, 1959¹

Washington, June 30, 1959

SUBJECT

• 1. Eximbank Mission to Argentina²
• 2. Plans for Visit to Peru

PARTICIPANTS

• Mr. Vance Brand—Eximbank
• Mr. Roger Williams—Eximbank
• Mr. Charles Shohan
• ARA—Mr. Rubottom
• OSA—Mr. Vaky
• OSA—Mr. Silberstein
• E—Mr. Harold Bratt

1. Mr. Brand said he had finally been able to arrange an appointment with Ambassador Barros, whom he was seeing at four this afternoon.

He said that one of the things he wanted to mention to Ambassador Barros was the great delay in utilizing the loans which have been made to Argentina. Except for the railroads, he said, he does not believe that any equipment has left the US in connection with other projects. He referred specifically to the Celulosa loan and to some 3 to 5 million dollars loaned for highway equipment. Despite a considerable length of time the Argentine recipients had not been able to import the equipment. The delay was due to the excessive red tape and paper work being required by Argentine authorities in connection with the import permits.

He said he wanted to explain this situation to Barros, hoping that Barros would apprise his Government of this information before the mission arrives. The Bank personnel would not then have to start out their visit on this negative note. Brand also said that the Bank had completed action today on other small private loans, and he would so inform the Ambassador. Counting the John Deere project, the $15 million private sector portion of the 1956 $100-million line of credit has now been slightly exceeded. Brand said that the mission would also investigate during its visit projects for which loan applications have been submitted totaling some $31 million.

Roger Williams then described a visit he had received from Alejandro Orfila, Public Relations Director of the Pan American Union and nephew of the Argentine Secretary of Commerce. Orfila, who stated he was told to talk to the Bank by Frigerio, inquired about the nature of the mission and its purpose. He expressed some concern that if much publicity was given to it and nothing in the way of sizeable loans resulted there would be a bad reaction. He was relieved, apparently, at Williams’ explanation. Brand said that this reopened the whole question about timing as far as he could see, and that was why he wished to speak with Barros.

Mr. Rubottom said that Ambassador Beaulac had brought this point up with him when they talked in Sao Paulo. He speculated that Orfila’s reasoning may also have been behind Barros’ request that no public statement or announcement be made. After a general discussion it was agreed that some announcement should perhaps be made to explain the exploratory and study nature of the mission, so as to avoid speculation and the raising of hopes. Brand suggested that Barros might himself make some announcement, pointing out the desirability and necessity for the Bank to acquaint itself with the new Argentine financial officials, and that this was an exploratory and brief visit. The Ambassador, he said, could if he wishes announce the small loans concluded today, and mention that the Bank did wish to finalize $6 million for a Celulosa paper project during his visit. Mr. Brand said he readily recognized that these amounts would appear to the Argentines as peanuts. He was sure, too, that Frondizi would press for some aid in the public sector. In response to Mr. Rubottom’s question he said that he had no indication that the IBRD was contemplating anything in Argentina. As regards petroleum he noted that the Murcheson group had virtually concluded that no arrangement was going to be possible. Mr. Rubottom said that Henry Holland was optimistic. He noted that Frondizi seemed to have wanted to be able to announce some accomplishment as regards either oil or ANSEC. Sargent is planning to return to Argentina on July 17 after Brand departs.

Brand mentioned another item which was troublesome—the group of private steel companies who wished to form jointly a company to construct another steel mill. Brand said that he felt this was a great mistake; since the Argentines were having trouble building one, it was foolish to attempt to start a second. He said he may have to speak frankly to Frondizi if asked about this. He noted that Argentines seemed to have their head in the sand and to pretend they needed no help.

Mr. Rubottom said that he would call Barros and tell him of Brand’s visit this afternoon and that he would urge some sort of publicity to eliminate speculation. Brand said that he would speak frankly to Barros and that if no publicity was wanted the mission should not go.

[Here follows discussion of Peru.]

1. Source: Department of State, Central Files, 103. XMB/6–3059. Official Use Only. Drafted by Vaky.
2. On July 21, an Export-Import Bank Mission, headed by Vance Brand, arrived in Buenos Aires to discuss with the Argentine Government the progress of the Argentine economic program and credits. A complete record of the conversations was transmitted in despatch 151 from Buenos Aires, July 31. (ibid., 103.02–XMB/7–3159)