123. Memorandum of Conversation1

SecDel/MC/44

SECRETARY’S DELEGATION TO THE NINETEENTH SESSION OF THE UNITED NATIONS GENERAL ASSEMBLY

New York, December 1964

SUBJECT

  • Effect of Hickenlooper Amendment on Argentine Silo Loan Application

PARTICIPANTS

  • U.S.
    • The Secretary
    • Mr. Irwin (Reporter)
    • Mr. Von Reigersburg (Interpreter)
  • Foreign
    • Foreign Minister Zavala Ortiz
    • Ambassador Ruda

Foreign Minister Zavala launched into a long and detailed presentation of the effect of the Hickenlooper Amendment on recent [Page 291]Argentine applications for a $25 million loan for wheat storage silos. He said that the Argentine Minister of Economy had met Assistant Secretary Mann at the recent ECOSOC meetings in Lima.2 The Minister stated that Mr. Mann had told the Minister of Economy that the Hickenlooper Amendment would prevent favorable action by the U.S. on the silo loan applications, and that subsequent meetings with Assistant Secretary of Agriculture Murphy confirmed Mr. Mann’s statement.

Mr. Zavala said that the GOA was taken completely by surprise by this information because Ambassador Martin had been urging the GOA to complete the loan applications as quickly as possible. He said that the GOA did not understand why military aid was not similarly affected. He also referred to conversations with the Secretary and Mr. Mann at the 9th Meeting of the OAS Consultative Group [where] the silo loan had been discussed but no mention was made then of the possible applicability of the Hickenlooper Amendment. He said that the GOA understood that since the problem between the GOA and the oil companies was under study in the courts and since some companies had made out of court settlements the oil issue would not affect the silo loan. He expressed the hope that the oil cases would be settled soon.

Mr. Zavala said that had the U.S. oil companies been Argentine in nationality, they, too, would have been concerned with the wasteful exploration methods used. He said his country had lost a great fortune in gas revenues because of the companies’ actions.

The Foreign Minister said he deeply regretted this situation, and emphasized what he called the unfair, heavy press campaign against Argentina in both Europe and the U.S. and cited The Washington Post. He deplored the possibility that the companies might be able to exert undue influence on the U.S. Government saying that the U.S. should not permit its excellent relations with Argentina to be jeopardized by the opinions of private companies. He pointed out that the lack of silos would force the price of Argentine wheat to drop because the perishable product could not be held back from the market.

The Secretary thanked Foreign Minister Zavala for his observations. He said that he regretted that he was not fully informed on the details of the problem of the silos, because recently he had been so heavily preoccupied with United Nations and NATO matters. The Secretary said that it is not the desire nor the intent of the U.S. to apply any U.S. law in an arbitrary or discriminatory manner. The Secretary agreed that private firms should not have undue influence on the foreign relations of nations. He assured the Foreign Minister that [Page 292]Argentina had a large reservoir of friendship in the U.S., and said there is no campaign here against the Argentine Government.

The Secretary said he wished personally to study the silo issue, and offered to send an appropriate official to New York to discuss it with the Foreign Minister.

Foreign Minister Zavala regretted that he was returning to Buenos Aires December 20 directly from New York.

The Secretary replied that he wished to be able to speak constructively on the matter, and said that he would send the Foreign Minister a personal letter explaining the situation after he had made a careful review.3 He inquired whether the Foreign Minister had had an opportunity to talk with Mr. Mann concerning the matter during the OAS meetings.

Foreign Minister Zavala replied that he had been so busy with OAS matters that he had not, although he said he had referred to the subject briefly with Mr. Hoyt at the airport in Washington December 19.4 He expressed his personal pleasure that the Secretary had not participated in the decision and said that he had told President Illia that he has great faith in the Secretary as a friend of Latin America and Argentina. The Foreign Minister said he had just concluded visits to the Central American nations where he had declared Argentina’s faith in the U.S., and told their officials that Argentina supported the U.S. in a common cause. He said he plans to make a similar visit to Africa later this year in this common interest. He said that the silo incident is embarrassing both at home and abroad, especially when the press points out that the U.S. is making large loans to Brazil and Chile. The Minister said that, as everyone knows, Argentina inherited a heavy budgetary deficit, but that this year it has been able to meet salaries, has made payments on some debts, has met its international organization dues, has not made new loans and has not sought to refinance old ones.

Foreign Minister Zavala then referred briefly to trade relations and suggested that it might be time to study bilateral trade relations between the two countries. He suggested a joint committee be established without publicity.

The Secretary expressed the hope that forthcoming GATT negotiations will help ease matters. He said that we believe our efforts to [Page 293]lower trade barriers across the board on a most favored nation basis would be particularly advantageous to Latin America, especially to Argentina. The Secretary said he would also comment on this trade issue in his letter to the Foreign Minister. He suggested that Argentina take another look at trade opportunities in the U.S. because it might uncover some hitherto overlooked markets.

Foreign Minister Zavala concluded with the plea that the silo issue is more than a matter of dollars or law, but rather a “spiritual” issue between two friends, a matter of trust. The relations of the two countries could be seriously damaged, he said, by attitudes or actions reflecting distrust. The moral effect would be more damaging than the economic effect of not getting the silos.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, AID(US) ARG. Confidential. Drafted by Irwin on December 21 and approved in S on December 24. The meeting was held at the Waldorf Towers. The memorandum is part II of III.
  2. Mann met Minister of Economy Pugliese in Lima on December 8; a report on the conversation was transmitted in telegram 685 from Lima, December 8. (Ibid., AID(US)9 ARG)
  3. Rather than send a personal letter, the Secretary asked Martin to deliver an oral message to Zavala, indicating that the matter had been “pursued and studied” as promised. Rusk also accepted Martin’s suggestion that “basic discussions of overall economic policies be left for Minister Economics and possibly President,” i.e., not the Foreign Minister. (Telegram 659 to Buenos Aires, January 8; ibid., PET 15 ARG)
  4. A memorandum of the conversation between Zavala and Hoyt is ibid., POL ARG–US.