143. Memorandum of Conversation1

PARTICIPANTS

  • The Secretary
  • Dr. Alvaro Alsogaray, Ambassador-at-Large of Argentina
  • Mr. Carlos A. Quesada Zapiola, Argentine Chargé d’Affaires
  • Mr. Angel R. Caram, Argentine Financial Counselor
  • ARA—Assistant Secretary Gordon
  • LS—Mr. F. A. VanReigersberg

Mr. Alsogaray opened the meeting by repeating the reasons for the recent Argentine revolution which he had already given to Mr. Gordon in a previous meeting,2 stressing that the two immediate causes were the rapid deterioration of the Argentine economy and its move towards socialism as well as the imminent threat of a Peronista victory at the polls. He added that while no one had wanted the revolution, it had become inevitable since the Argentine people are as afraid of a Peronista return as the German people would be of a return of Hitler. He then explained the objectives of the revolution, which in the political field would be to re-establish the bases for representative democracy (although the date for a “return to democracy” could not yet be announced in order to avoid renewed plotting on the part of politicians) and the transformation of the present “semi-collective system” into a free enterprise system. The Argentine revolution is only beginning its work but its leaders are optimistic as to its future because Argentine labor and even the Peronistas have not come out against it yet. Nevertheless, the Ongania Administration expects to face some difficulties in the future as stern economic measures and anti-inflationary policies are adopted. He described the external debt situation as good and pointed to the internal budgetary deficit as one of the main economic problems which the new administration wants to tackle from the outset. The scandalous situation of the national railroads will be the first item of business which the Government will face since “100,000 men cannot be allowed to paralyze a country of 22 million.” In the field of petroleum, the Government will allow both domestic and foreign [Page 326]companies to explore the Argentine subsoil although no general law will be passed to cover all such companies and the activities of each foreign company will be regulated on a case by case basis. Furthermore, the new administration is prepared to go ahead with the last stages of the negotiations leading up to an investment guaranty agreement with the United States which should attract foreign investors.

The Secretary stated that he was well aware of the importance of Argentina in the world today and what happened in Argentina had a bearing on every other country in this hemisphere. He indicated that the U.S. Government regretted the steps that had to be taken in Argentina a few weeks ago since it had hoped that the Argentine military and civilian authorities would have been able to work out their differences without the necessity of a coup. Nevertheless, it was important to look towards the future and not allow this disappointment to color relations between the countries. He noted that one positive element resulting from the coup was the respect for General Ongania’s personal qualities in most of the Latin American countries and the United States, and he could only express the hope that the General would act on the basis of those qualities and that his colleagues would permit him to do so. He stated that Ambassador Martin would return to Buenos Aires in two weeks and that he would keep in close touch with the Argentine Government, trying to repair some of the damage that had been done and to work constructively with a view toward the future. With regard to the philosophy of private enterprise, the Secretary indicated that while the United States firmly believes in it, he hoped that Argentina would fully consider the changing role of private enterprise both in this country and in Western Europe. He deplored the fact that in a number of countries private enterprise had not caught up with the 20th Century, noting that in the United States, for instance, the “robber barons” of the 19th Century had been superceded by the socially aware businessmen of the 20th Century with a strong sense of public responsibility. He expressed the hope that Argentina would move in the direction of modern capitalism. The Secretary also noted that American businessmen are constantly being told that the U.S. Government expects them to uphold the same standards of public responsibility abroad as in this country.

Mr. Alsogaray stated that he was well aware of the need for a greater sense of public responsibility on the part of Argentine businessmen and indicated that the present Argentine administration wants to model the country’s economy on the basis of the European version of enlightened capitalism, which he described as a “socially aware market economy.”

The Secretary stated that recent events in Argentina have affected the lives of every country in this hemisphere. He stated that the United [Page 327]States therefore has a problem now which it did not have two months ago and that a number of Senators and U.S. organizations had attacked the U.S. Government because of its recognition of the Ongania administration. He expressed the hope that Argentina would keep in mind that other hemispheric countries have problems of their own and that it would follow a policy of moderation and restraint, especially in the OAS. He added that the next MFM had become a “problem” although the United States would have preferred that it had not become a problem and that now it was up to Argentina to show understanding for the position of its sister republics. The Secretary stated that Argentina could adopt one of two alternatives with regard to the next MFM. Firstly, it could decide that the site of the meeting was a nonnegotiable issue and therefore disregard the wishes of other countries, or else it could take the initiative and by so doing increase the prestige of its government all over the hemisphere by indicating that it is willing to accept a solution that would receive the backing of the majority of the hemispheric countries.

Ambassador Alsogaray stated that in his meeting with Mr. Gordon he had discussed this problem at length and that he was well aware of domestic problems both in the U.S. and in other hemispheric countries. He said that he would get in touch with his Foreign Minister and with General Ongania right away and that he would explain the situation to them and advise them to refrain from adopting a tough line on hemispheric matters. He insisted, however, that it would not be easy for the Government to explain any softening of its attitude to the Argentine people. Ambassador Alsogaray then referred to the matter of economic relations and stated that a number of organizations in Washington were awaiting instructions from the State Department to go ahead with their studies of assistance programs for Argentina which had been paralyzed for some time. He asked the Secretary to intercede on his country’s behalf so that even though decisions might not be taken, the examination and study of these problems might continue in order to avoid any delays or slow-downs.

The Secretary stated that Mr. Gordon would look into the matter. In response to a question from Mr. Gordon, Ambassador Alsogaray stated that Argentina was in favor of stepping up the process of Latin American economic integration although the present administration had not devised any new policies on the matter. He knew that General Ongania and Economics Minister Salimei supported integration, both on a hemispheric and on a bilateral basis, especially with Brazil and Chile, and that they were also interested in reducing tariffs.

The Secretary stated that there was one additional item he wanted to bring up to which increasing attention will have to be given in the next months and that was the matter of the worldwide food situation [Page 328]in the next 10 years. He stated that all food-producing countries will be facing growing markets over the next decade and that purchasing countries will face increasing difficulties both in increasing their domestic production and in paying for food imports. Therefore there is a great need for increasing efficiency on the part of the producing countries and for offering food to potential buyers under terms which they can meet. He added that Argentina, the United States, Canada and Western Europe may also have to find a way to set up food and fertilizer reserves in the case of future emergencies. He indicated that in spite of an increasing production of wheat in the United States, our present reserves were somewhat below what was considered a prudent level. Therefore the matter would have to be given increased international attention in the next months and years and there might be a need for looking at the situation both on a worldwide and on a hemispheric level.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL ARG–US. Confidential. Drafted by Van Reigersberg and approved in S on August 4. The time of the meeting is from the Secretary’s Appointment Book. (Johnson Library) A brief account of the meeting was forwarded to the Embassy on August 1 in telegram 19146. (National Archives and Records Administration, RG 59, Central Files 1964–66, POL ARG)
  2. Gordon met Alsogaray on July 28; a memorandum of the conversation is ibid., POL 23–9 ARG.