810.74/471
Memorandum of Conversation, by Mr. Louis J. Halle of the Division of the American Republics
| Participants: | The Secretary (later); Assistant Secretary Long; Mr. Hackworth, Legal Adviser (later); Mr. Bonsai, RA;62 Mr. Daniels, RA; Mr. Halle, RA; Mr. Reinstein, A–A;63 Mr. Tannenwald, FF;64 Mr. deWolf, IN.65 |
Mr. Long pointed out that after months of conversation the American interests in the Consortium Trust (Radio Corporation of America) had done nothing actually to bring about a closure of the circuits maintained with the Axis by the Consortium companies in Argentina and Chile. He said they had proved what degree of control they could exercise over these companies by what had been accomplished in the course of General Davis’ visit to Buenos Aires and Santiago, and that consequently he had no doubt but what they could order the companies to suspend the operation of the undesirable circuits. He said that the RCA representatives were coming to see him at 3 p.m. today, and that he had in mind telling them to do what was necessary in order to shut down the circuits by midnight tomorrow (September 10).
Mr. Bonsai suggested the advisability of informing the Argentine and Chilean Governments in advance of the contemplated action, pointing out that the political consequences of doing otherwise might have wide ramifications involving the basic policy governing our relations with the two republics. Specifically, he said, action taken by the companies in response to an initiative from this Government to close the circuits might raise the whole question of control by national governments over public utilities operating within their own [Page 141] jurisdiction. He felt that one of the consequences might be that nationalistic interests would point out that the public services in these countries were controlled by Washington, rather than by the national governments which should properly have jurisdiction.
Mr. Long expressed the view that, should the Governments be notified of the proposed action in advance, they would immediately call in the Axis representatives and that then we would have a fight on our hands. Mr. Bonsai felt that, in any case, we should be much better informed than we were of what the legal and political consequences of such action would be before we embarked on it.
The suggestion was advanced by Messrs. Daniels and Halle that it might be sufficient to have the RCA representatives be prepared to issue the necessary orders immediately when the Department gives them word to go ahead. This suggestion was based especially on the possibility that the Chilean Government might cut the circuits in the near future on its own initiative, and that since such initiative would lead the country nearer to a complete diplomatic break with the Axis, it would be preferable to company initiative.
The meeting thereupon adjourned to the Secretary’s Office, where Mr. Long placed the problem and various considerations that had been advanced before the Secretary. The Secretary, citing the vital economic assistance that we were extending to Argentina, especially in the way of iron and steel shipments, said that we had a right to expect a good deal more cooperation in return than we were getting. He said that, while he had not been in close touch with the situation in Argentina over the past few months, he felt the time had come when we should deal more severely with the Argentine Government. Consequently, he favored Mr. Long’s proposal to ask RCA to have the circuits abandoned by midnight tomorrow. Mr. Bonsai expressed his view that we should have more information on the provisions of the franchises under which the companies were operating before proceeding further. The Secretary said that he felt the question of what the franchises provided concerned the Consortium and the Consortium companies rather than this Government. It was agreed that, because of indications that the Chilean Government would not oppose company initiative in this matter, the Chilean authorities should be notified in advance. In the case of Argentina, the Secretary expressed no objection to our having the company take the action forthwith.