840.51 Frozen Credits 35/135: Telegram
The Ambassador in Argentina (Armour) to the Secretary of State
[Received 5:56 p.m.]
2620. Text of aide-mémoire mentioned in my November 5, 1 p.m., number 2619,14 follows:
As requested by Their Excellencies, the Ministers of Foreign Affairs and Worship and of Finance, the Ambassador of the United States of America telegraphed his Government on October 29 for additional details regarding the designation by the United States Treasury Department of the Banco de la Nación Argentina and the Banco de la Provincia de Buenos Aires as special blocked nationals.
The Ambassador has now received a reply from his Government in which he is informed that the immediate reason for the action taken [Page 505] by the Treasury Department was the unusual movement of funds during the period October 25 to October 28 inclusive. During the first 3 days of that period, debits to the accounts of the two banks amounted to $4,184,000 as compared to $989,000 for the full week ending October 11. Of the 3-day total, almost $1,000,000 was transferred to countries other than the United States. On October 28 transfer orders amounted to almost $10,000,000, at which time the Treasury Department, as a precautionary measure, blocked further operations.
While the foregoing explains the immediate reason for the action of the Treasury Department, the Ambassador understands that the fundamental causes are more far-reaching and disturbing. For almost 2 years the United States Treasury Department has been calling attention to operations carried on by these two institutions which had the effect of benefiting the Axis or Axis-occupied countries or nationals of such countries resident therein. Likewise, the Treasury has pointed out on many occasions that the institutions in question have granted credits and overdrafts to persons and firms whose activities are deemed to be inimical to the security and defense of the hemisphere. The Embassy, in accordance with the provisions of resolution VIII of the Inter-American Conference on Systems of Economic and Financial Control held in Washington in 1942,15 brought those observations to the attention of the appropriate agencies of the Argentine Government.
During the course of the present year, informal conversations have been held, as the Ministry of Foreign Affairs is aware, between officers of the Embassy and those agencies. The latter have invariably taken the position that the remittances to Axis or Axis-occupied territory were made in accordance with the established policies of the Argentine Government. With respect to credits and overdrafts, the appropriate agencies, although courteously receiving the Embassy’s observations, stated, presumably following directives of the Argentine Government, that they were unable to take corrective measures or alter existing policies.
The United States Treasury Department has maintained that even though the operations carried on by the Banco de la Nación Argentina and the Banco de la Provincia de Buenos Aires were authorized or condoned by the Argentine authorities, this did not free those institutions from the responsibility of effecting such operations, since, in so far as the use of the financial facilities of the United States was concerned, the Treasury Department was obligated to apply its controls on the basis of the wartime financial regulations of the United States and the recommendations adopted at the Rio de Janeiro and Washington conferences. Accordingly, after more than one year of patient waiting, following the Inter-American Conference on Systems of Economic and Financial Control, the Treasury Department felt that the two banks in question had definitely elected to continue operations and transactions which had the effect of benefiting the Axis Powers and which were inimical to the security of the hemisphere. Therefore, it was decided that the institutions in question were not entitled to the free and unrestricted use of the financial facilities of the United States. Accordingly, the Treasury has taken [Page 506] action to require that specific licenses be obtained for further transactions by the two institutions, to the end that it may request and obtain information as to the nature of such operations in order to preclude the possibility of the financial facilities of the United States being used in contravention of the existing wartime financial controls and the recommendation of the above-mentioned conference.
. . . . . . . . . . . . . .
The Ambassador desires to make clear that the Treasury Department will, of course, be pleased to consider applications for specific licenses made on behalf of the above mentioned banks.
Buenos Aires, November 5, 1943.
- Not printed.↩
- See Foreign Relations, 1942, vol. v, pp. 58 ff.↩