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

205. Memorandum of a Conversation, En Route From Mar del Plata to Bariloche, February 27, 1960¹

US/MC/4

February 27, 1960

PARTICIPANTS

• US
• The President
• Lt. Colonel Walters
• Argentina
• President Frondizi
• Dr. Alejandro Orfila, Minister-Counselor of the Argentine Embassy in Washington

SUBJECT

• Various

1. Argentine Economic Development—President Frondizi opened the conversation by saying how happy he was to have this opportunity to talk over various problems of mutual interest with President Eisenhower. Argentina had undertaken a great effort and was determined to push it through. They were moving rapidly toward self-sufficiency in petroleum and hoped before too many years to be in a position to exploit petroleum products. This had, in the past, been a serious drain on Argentine foreign currency reserves. Now that the petroleum problem had been solved, which used to cost them annually 300 million dollars, the two great remaining problems were steel and roads. The Argentine President said he was very anxious to obtain a steel mill as this would still further reduce their need to expend foreign currency for steel products. They had been spending between 100 and 150 million dollars a year for such purposes and roads were an urgent requirement for the development of the country. During 12 years, Peron had not built a single modern highway.

The President said he was delighted with the success the Argentines had had in the courageous stabilization program which they had undertaken and was equally delighted with the success they had had with petroleum. With regard to a steel plant, he asked whether the Argentines did not have one at the present time. President Frondizi replied that they did, that it was partly state owned and partly privately owned and was not producing at a very satisfactory rate. The President said that he had with him, Mr. Walter Donnelly, who was in the steel business, who had great knowledge of Latin American problems, who was a known man and above any business interest and he hoped the President would be able to talk with him during the visit as he felt he might be useful to him. President Frondizi laughed and said “send him to me and we will go into a room and shut the door until we work out this problem.” The President said he would make arrangements for Mr. Donnelly who was a member of the National Advisory Council in Inter-American Affairs to see the President as soon as possible.

2. The President’s Visit to Brazil²—President Frondizi then asked the President how his visit to Brazil had gone and the President replied that it had gone very well, that he had been very impressed by Brasilia and had had useful talks with President Kubitschek and that the latter had been outspoken in his admiration for President Frondizi.

3. Submarines in Golfo Nuevo³—The conversation then turned to the subject of the submarine contacts in Golfo Nuevo. The President asked whether there really had been submarines there. President Frondizi replied that there had. In fact, it was believed that there had been two and possibly a third. In reply to a question by the President, President Frondizi expressed the belief that they were checking the route around Cape Horn, which the Free World would be forced to use in case of a generalized conflict and breaking of the Panama Canal. Likewise, it gave the Soviet Union long-range experience for its crews with minimum danger owing to the obsolescent equipment which the Argentines had. Admiral Grunwalt, the Chief of Staff of the Argentine Navy, then joined the conversation and gave the President a somewhat detailed account of the contacts and attacks made against the submarines.

4. US Consultation With Other American Nations—At the conclusion of the conversation, the President told President Frondizi that he felt that the United States should maintain close contact and consultation with the other American nations in matters of common concern to all and he was looking forward to talks at Bariloche on hemisphere and world problems with the Argentine President.

1. Source: Department of State, Conference Files: Lot 64 D 559, CF 1956. Secret-Limit Distribution. No drafting information appears on the source text. The conversation took place aboard the Presidential aircraft, the Columbine.
2. Eisenhower visited Brazil February 23–25. See Document 281.
3. On February 7, it was officially reported in Buenos Aires that an unidentified submarine had been contacted in the Golfo Nuevo, an Atlantic inlet southwest of the capital. Despite a 3-week search by the Argentine Navy, no submarines were found. Documentation on the incident is in Department of State, Central File 735.5400.