835.50/139: Telegram
The Ambassador in Argentina (Armour) to the Secretary of State
[Received 7:25 p.m.]
105. Personal for the Secretary. I have carefully studied the various approaches to Argentine policy outlined in your telegram 39, January 8, 11 p.m. and I venture to suggest that in addition to the three courses of action mentioned therein, the following be considered:
- 1.
- A statement along the lines mentioned in my telegram 99, January 12, 9 p.m.54
- 2.
- An export embargo to be placed on shipments from Great Britain and the United States to Argentina except for consignments to industries directly engaged in war effort. Brazil to continue embargo on rubber and add pig iron; Chile to embargo sulphur, pig iron and copper; Venezuela, Peru and Ecuador to discontinue petroleum shipments (these shipments are mainly controlled by Shell and Standard interests). Sweden to discontinue shipment of steel products and other materials essential to Argentine industry.
- It is felt that this policy would effectively disrupt Argentine industry within a period from 3 to 6 months and have a profound effect on present Argentine prosperity. It is, of course, an extreme step and as I have stated before while I feel that Argentine Government would find it impossible to refuse to sell meat or export surpluses of fats and oils, linseed, wheat and quebracho in retaliation for any economic sanctions adopted by the United Nations an alternative policy exists. This would be to embargo shipments of all products essential to Argentine economy from Great Britain and the United States along with the other suggestions mentioned in the first paragraph of number 2 above.
- 3.
- American ships to call at Argentine ports only for outbound cargo; British ships to follow course resulting from decision made in connection with number 2 above; Flota Mercante55 to continue if desired to handle northbound movement of products.
- 4.
- Consignee control to be handled from Washington and certificate of necessity system in Argentina eliminated. This will be necessary under whatever policy is adopted since present system has no elasticity.
- 5.
- All procurement except meat, eggs, sunflower seed oil and peanuts (which are covered by government to government agreements) to be confined (as is actually the case at present) to private purchases and every effort made to restrict purchases in Argentina to products which are essential to the war effort.
- 6.
- Orders to be issued by both American and British Governments to the effect that all statements emanating from official sources and referring to Argentina should be cleared through Foreign Office and State Department to preclude further references by procurement officials to the importance of Argentina in supply picture. Cooperation of press associations should also be sought to prevent transmission of similar statements appearing in such internationally known publications as the London Financial News and the Wall Street Journal.
- 7.
- The American and British Ambassadors to be recalled and the staffs of both Missions reduced to absolute minimum consistent with need for observation and reporting.
- 8.
- Argentina to be subjected to strict neutral controls covering shipping, communications, and finance by both Great Britain and the United States.
Whatever policy is decided upon I believe that the economic functions of the Embassy should be transferred to Washington insofar as may be possible. The present situation wherein the Embassy is expected to request favors of this Government one day and take punitive action the next is untenable.