840.51 Frozen Credits 35/116a: Telegram
The Acting Secretary of State to the Ambassador in Argentina (Armour)
1644. The telegram quoted hereafter has been sent to the Secretary.4
The Treasury is again proposing to include Argentina among the list of blocked countries thus blocking the bank accounts, securities and assets in the United States of Argentine citizens, residents or entities and permitting financial transactions and communications with Argentina only by license. Treasury would make General License 53 applicable to Argentina thus general licensing all commercial transactions and transactions incident to commerce.
Ambassador Armour has also recommended a blocking proposal but with a general license of a somewhat different character.
Both the proposals of Treasury and Ambassador Armour have a political objective, namely, the upsetting of the present Argentine Government rather than an economic warfare purpose.
After very careful thought we think the chances are that the proposal will have the opposite effect; will strengthen the Government and will postpone rather than hasten a change in Government.
Our reason is the supersensitivity of Argentines to any suggestion of outside pressure. We believe the Government would seize upon blocking to present it to the Argentine people as U. S. invasion of Argentine sovereignty. The Government would wave the flag and urge “all patriotic Argentines” to forget their internal differences and rally to the “defense of their country”.
Moreover, we do not believe the proposal would attain any important economic warfare objective. It is unlikely that Argentine banks, concerns and private individuals will seek to withdraw any important assets from the U. S. and our blocking here would have no substantia effect on Axis activities in Argentina.
In addition Argentine blocking
- (1)
- would chill the friendly feeling in the other countries because they would figure that if the United States used strong arm tactics against Argentina of this character it would do the same to them;
- (2)
- would probably not have British support without which action on our part would be unwise from both the immediate and long-term point of view; and
- (3)
- might produce retaliatory action which would
- (a)
- endanger United States procurement of such vitally needed materials as zinc, beryl, hides, edible oils and foodstuffs;
- (b)
- jeopardize the advantageous shipping arrangements under which the Argentine Merchant Marine carries to the U. S. a minimum of 40,000 tons a month of cargo selected by us.
Our recommendation, therefore, is that Argentina be left to stew in its own juice for the time being. The political pot is seething and may boil over of its own account.
This message repeated to Buenos Aires.
I am passing the foregoing on to you as I know of your interest in the subject. In as much as Treasury is pressing the matter vigorously, I am taking it up with the President at the earliest moment.
- Secretary of State Hull was in Moscow.↩