840.51 Frozen Credits 35/118: Telegram
The Ambassador in Argentina (Armour) to the Secretary of State
[Received 9:40 p.m.]
2572. Reference Department’s 1661 of October 28, 6 p.m. The Minister of Foreign Affairs6 asked me to call on him at 5:30 p.m. today. Anticipating he wished to discuss the bank situation I had Bohan accompany me. The Minister of Finance7 was also present. The latter stated that he had received word that Nación and Provincia had been designated as special blocked nationals and assumed that the use of “special” indicated that there were special reasons for taking this action. He asked if I had any information regarding the reasons for this action which he considered very grave, and both he and the Minister of Foreign Affairs assured me that if the banks had done anything wrong it would not be repeated. I replied that the only information available to me at the moment was contained in a telegram received from the Department indicating that the Treasury had taken the action as a result of increasingly heavy transfers being made [Page 501] by both banks, so heavy on Thursday that the Treasury felt constrained to take precautionary measures. Neither Minister appeared to grasp the situation and both were extremely nervous and assured me that the Government was willing to do anything to correct any faults of which the banks might be guilty.
Curiously enough the Minister of Finance stated that if it were the Dresdener Bank matter, this could easily be corrected. He pointed out that the Banco de la Provincia was very proud of its credit record. How to interpret this remark is difficult since the Finance Minister’s apparent lack of understanding may indicate that he had only seen the reference to this case in the United Press despatch. The Embassy is investigating this point immediately since, if the remittance was made after official and written assurances from the Argentine Government to the contrary, there would be a perfectly sound basis for the Treasury’s action against the Banco de la Provincia. As the Embassy has pointed out on many occasions while there are ample grounds for a general blocking of Argentina, our case against the two banks may be weak.
I promised the Ministers that I would communicate with the Department at once and request further details.