840.51 Frozen Credits/10527: Airgram
The Ambassador in Argentina (Armour) to the Secretary of State
[Received May 28—5 p.m.]
A–386. With reference to Department’s No. A–516 of December 31, 1942, 1:30 p.m., the Embassy has a program for ad hoc blocking in addition to the one outlined in the airgram under reference, which it submits for the approval of the Department.
For the confidential information of the Department and the Treasury, the Embassy for some time has been getting a list from three local banks of all checks passing through them by virtue of local clearing operations, which are drawn on or deposited in the four local Proclaimed List banks, namely; Banco Alemán Transatlántico, Banco Germánico para la América del Sud, Banco Francés e Italiano, and Banco di Napoli. The Embassy has discreetly called in certain of these depositors whom it felt that it could approach and has informed them that it has come to the Embassy’s attention that they are carrying accounts with Listed banks, and has asked those persons to cooperate with this Embassy and change the account. In the past, the financial controls section has been so understaffed that it could not completely take advantage of this information. However, it is hoped that the program can now be intensified. As the Department no doubt realizes, it is a delicate situation for this Embassy to ask Argentines to remove their accounts from banks which are authorized to operate [Page 477] in Argentina, and which are under Central Bank supervision. Furthermore, it is the thought of this Embassy that those persons who use the financial facilities offered by enemy banks are certainly not entitled to use the financial facilities of the United States. Accordingly, the Embassy proposes to recommend for ad hoc blocking all those persons who, from the above mentioned information, are determined to have accounts in the local Proclaimed List banks. Many of these people of course will never know that such action has been taken. On the other hand there are many people who are not on the Proclaimed List of Certain Blocked Nationals or the Confidential List of Unsatisfactory Consignees, who will be affected by this action and will immediately come into the Embassy to make inquiry. In such cases, the Embassy proposes to tell such persons that this action has been taken by the United States Treasury Department pointing out that the Treasury Department has certain sources of information which are not available to this Embassy. The Embassy will then inquire of these visitors as to why such action could possibly have been taken, asking where bank accounts are kept, etc. When it is thus disclosed that the party in question maintains an account with the enemy bank, he will be told that this, in all probability, is the reason for his being blocked. If the Embassy has no other adverse information on the party in question, and if he proposes to remove his account from the enemy bank, the Embassy will immediately recommend that he be deleted from the List of Special Blocked Nationals.
The above proposal is made for two reasons: 1) The fact that these cooperative banks (and the Embassy hopes to get this information from two or three others in the near future) give this information to the Embassy must be kept strictly confidential. If it should become known that these banks were giving this information, they would experience tremendous difficulty with the local banking authorities and conceivably legal action could be taken by the persons affected. 2) This facilitates the Embassy’s plan of having depositors withdraw their accounts from enemy banks. However, the Embassy will continue, in cases which it deems appropriate, to call the parties in and request that they move their accounts.
It is thought that if this plan is approved by the Department and the Treasury that it not only will be a tremendous pressure device, but the results of its operation in a period of 6 weeks or 2 months should leave the enemy banks in a very bad position indeed.
In addition to the above, it is the view of this Embassy that all officers and directors of Proclaimed List concerns should be designated as special blocked nationals. There will, of course, necessarily have to be some special cases for political reasons. However, it is thought that there is no excuse at this stage of the game for anyone remaining [Page 478] as a director in a Proclaimed List concern since he has had the alternative of resigning from the moment his particular firm was placed on the Proclaimed List. There may be some excuse for an innocent stockholder in one of those concerns who does not wish to sacrifice his holdings by getting out, but that reason of course is not applicable to directors. Accordingly, if this action is approved by the Department and Treasury, a study of all the Proclaimed List concerns will be started immediately and the officers and directors of those concerns will be recommended for ad hoc blocking. The Embassy realises that in these cases there will be many callers at the Embassy inquiring as to why this action was taken. The Embassy proposes to tell such callers that it is the policy of the United States Government to block the accounts of all officers and directors of Proclaimed List firms, and that this is a matter in which the Embassy has no discretion, since a man either is or is not an officer or a director of a Proclaimed List firm.
The Embassy has in mind using the blocking in the two above mentioned cases as a sort of “preventive blocking”. Its recommendation that the procedure herein outlined be put into effect is conditioned upon the Department’s and Treasury’s agreeing to immediately unblock any of the persons blocked according to such procedure upon the Embassy’s recommendation, unless either the Department or the Treasury has additional information which is unknown to this Embassy. Such unblocking upon an Embassy recommendation must be automatic.
For the Department’s and Treasury’s information, the Embassy is continuing to study those accounts held in the United States in the name of Argentines, as revealed by the TFR–300.83 However, it will be appreciated that this study involves considerable investigation. In the past the Embassy has been working on these accounts but due to the shortage of personnel has been unable to complete the investigations in a manner satisfactory to it. Such investigations are continuing.
In view of the tremendous amount of work involved in effecting the procedure herein above outlined, the Embassy is quite anxious to start on this project at the earliest possible date. However, the studies mentioned cannot be started until the Embassy is assured that its recommendations made herein will be carried out. Accordingly it is requested that the Department communicate its views on the recommendations herein made by telegraph at the earliest possible date.
- Treasury form used to indicate financial details as called for by Treasury Circular No. 4, 6 Federal Register 4196.↩