735.00/12–550
The Officer in Charge of River Plate Affairs ( Birgfeld ) to the Director of the Office of South American Affairs ( Warren )
personal
Dear Mr. Ambassador: As you can imagine, both Buenos Aires and Montevideo have seen to it that I have been thoroughly occupied, and this accounts for the delay in writing you a second letter. Everything is going along wonderfully and on schedule so far. This letter will go in the pouch here on December 6 and, with luck, should reach you before I arrive back in Washington on December 13.
I feel that my visit to BA was very profitable. It has served to confirm some of the ideas we already had, and in a few cases to slightly correct or revise others, I have been particularly impressed with the obvious well-being and apparent contentment of the great mass of the BA population. There now remains practically no doubt in my mind but that Perón has made a substantial contribution to the economic status of the 60% or more of the population from which he draws his support. It seems quite clear that if elections were held today he would be re-elected with a proportion of the vote which in the United States would be called a “land-slide”, and there would be no necessity to engage in any coercion. There does not appear to be any reason why the laboring class should bite the hand which is feeding them so well. The consensus appears to be that during the Perón administration the cost of living has gone up by about four times but wages of labor have gone up five times! I gathered these ideas from a wide variety of people including the British Minister-Commercial, Joint, the director of Shell-Mex Argentina, a lower middle-class Argentine of Italian descent, an Argentine of Salteño extraction who is raising a family as a commercial sign painter at 1500 pesos per month, and a young man of the white-collar class who is an auctioneer in one of the famous “remate” houses of BA.
Many representatives of American enterprises took advantage of my visit to discuss their problems. Among these were MacKenzie of American & Foreign Power, Ham Metzger of Standard Oil, Born of Panagra, George Smith of Panam-Panagra, and a few others. Noteworthy by their absence were any representatives of American shipping interests. Most of the remainder of this letter will consist of the re-typing of notes which I managed to get down in rough draft early one evening at the Residence.
No progress was made, unfortunately, on the petroleum company problem during my stay. Cereijo was absent from the office, reportedly sick, during the first four days of my visit, and when I did see him it [Page 740] was to pay an official farewell call. There was no difficulty in seeing him, and he let me choose my own hour for paying the call. Joe Walstrom accompanied me, and the Minister informed us at the outset that he was expecting a summons from the President. Possibly because of that he was preoccupied throughout the visit, which may have lasted fifteen minutes. This was in marked contrast to the exceptionally high spirits he was in eight days earlier on the occasion of Les Mallory’s dinner at the Residence. In response to my statement of our continued interest in the long-term agreement, and the desirability from the Argentine point of view of assuring itself of oil supplies. Cereijo merely stated that there was no problem connected with the continued operations of the petroleum companies, either with or without an agreement. This seemed to settle the matter as far as he was concerned except that he said that they are still working toward a long-term agreement. Naturally I had discussed this matter earlier with Ham Metzger, who suggested that no mention be made to Cereijo of their higher operating costs in pesos (as a result of devaluation), the problem of retentions, and related problems. Metzger and I agreed that any official representations, even on an informal basis, should be limited to the long-term agreement, so as not to spread our “shot”, and that the matter of retentions, etc., would work itself out in the course of time as a result of representations by the companies themselves.
The American and Foreign Power problem was also discussed with Cereijo during my farewell visit. I observed that we were pleased that negotiations were continuing and that some progress apparently was being made. Cereijo agreed that negotiations were continuing, but said that American and Foreign Power was “muy duro.” Mac-Kenzie of AFP was pleased when I told him of my conversation with the Minister, and recognized clearly that we could do little more at this stage of the negotiations. Earlier I had talked at length with MacKenzie. It is an understatement to say that he appeared to be a changed man. He seems to have been considerably “softened up” by the Argentines. While not able to speak for Robertson, Mackenzie told me in the strictest confidence that he is now prepared to sell for any reasonable figure. While still maintaining that they should receive $117,000,000, he is obviously willing to sell for less. We agreed that the present time is a good time to sell, and that it might be dangerous to risk waiting for a better time. MacKenzie said that he wanted to get out of Argentina before some others might be wanting to get out (it seemed evident he was thinking of the meat packers, but they were not mentioned), and that furthermore they needed the money and could take a little less in order to have it to use in other countries such as Brazil. MacKenzie said that if they could arrive at some figure to submit to Perón, he would be willing to let Perón slice a little more off it since “he had been working with these countries [Page 741] long enough to know that the top man had to get a little credit too.” He is a remarkably chastened man. Naturally he continued to criticize the Embassy, and I am sure by innuendo the Department, for not wholeheartedly supporting the $117,000,000 figure. I let this observation pass without comment, since I have never been satisfied with the figure myself and could think of little to say which had not been said before. On the negotiations themselves, Mackenzie reported even further progress from that reported to Tewk and me in Washington by Robertson a month earlier. He has hopes, not without some doubts, of course, that the question of price might be settled before Christmas. He has impressed upon Lopez, the Secretary of the National Economic Council, the desirability of doing this, since weeks of delay would result otherwise, by reason of the holidays if nothing else. He reports that Lopez is in agreement with the idea, in principle, and that meetings are scheduled on a serious basis to begin about December 6. He phoned me at the Residence late in the evening of November 30, to report the above and also to say that Robertson was flying down to Buenos Aires on December 2 to participate in the meetings. If Robertson should feel the same as MacKenzie about selling out now, maybe they will be able to reach some satisfactory compromise with the Argentines.
In addition to talks with Embassy officers, I had the opportunity to discuss the Anglo-Argentine Trade Agreement with the British Ambassador1 and with their commercial counselor Joint, the former over a before-lunch drink at the Jockey Club and the latter during a lunch which Jack Poole arranged a few days later at the American Club. The drink with the British Ambassador was arranged by Angie Biddle Duke.2 The Ambassador was most optimistic regarding an early settlement of the deadlock, although he crossed his fingers when he said that he had hopes of reaching an agreement within a matter of days. Joint did not reflect his Ambassador’s views in the least, and was his usual intransigent self, at least outwardly. Lyon, the head of Shell-Mex, Argentina, took me to lunch one day, and severely criticized the failure of the two countries to get together. He said it was like letting the principal go to the dogs while haggling over the interest. In other words, that trade was stagnant while the two countries argued over a difference in meat prices which, at the figures at which each party would be willing actually to negotiate, represents little more than the interest on the trade. I also discussed this subject briefly with Spangenberg, the Under-Secretary for Foreign Affairs, during the official visit I made on him. He contributed little to the subject, but did express himself strongly on the insulting remarks which the British found it necessary to make during the course of [Page 742] commercial negotiations. Spangenberg also expressed his appreciation of our aid, which he said had strengthened their position vis-à-vis the British during this period. Although I certainly do not believe that anything we did even remotely had this as an objective, I did not disabuse him of his belief that it was intentional on our part. Going back to Joint, he said that the UP man in London is an Argentine who gets his orders on how to slant his stories from the Argentine Ambassador there. This was his explanation of why the recent UP London datelines have criticized the UK failure to reach a compromise.
During the course of my official call on Spangenberg, I asked him if he would comment, as between friends and off the record, on the status of the Argentine canned and frozen meat offer to the United Nations for Korea. You and I had agreed before I left Washington that we would leave the initiative to the Argentines, but in view of the worsening situation in the Far East and in view of my reasonably close friendship with Spangenberg I felt impelled, and in a position, to ask him about the meat offer. Since I had deviated from our agreed-upon tactic, you can imagine how pleased I was to return to a staff meeting in the Embassy and find them discussing the Department’s telegram3 of inquiry on this subject which had just come in. Spangenberg very rightly called Les Mallory to his office the following morning and repeated the conversation he and I had the previous day, thus making it official and resulting in the Embassy’s telegram of, I think, November 29.3 I should say that in bringing the matter up with Spangenberg in the first instance I made it more than plain that we were not pressing for Argentine fulfillment of its offer, that I was inquiring because of personal interest, that there might be recent developments which made it impossible at this time for Argentina to ship the meat, etc., etc. Rightly or wrongly, this seemed to me to be the best approach at the moment, even though I myself did not believe what I was saying. However, Spangenberg replied that the Argentine offer was serious, that there never had been, and was not now, any question whatsoever about fulfilling the offer, etc., and then gave the explanations which were forwarded in the Embassy’s telegram.
I believe Les Mallory will have sent you a telegram saying that Brignoli expects to arrive in New York on December 13, and to proceed to Washington to work on the Export-Import Bank credit. It took prodding on several different occasions to get anything out of him, but he finally made the above prognostication the evening of November 30, at the reception which Les gave at the Residence for Secretary Brannan.4 In view of our extreme interest in getting payments on the way, and of the delay which has already taken place, I felt warranted in [Page 743] “needling” him on every possible occasion. Anyhow, he is a good friend and did not mind.
Joe Walstrom and I discussed the Supplementary FCED Treaty with Juncosa Seré. He gave the distinct impression that he is working on it and following closely the details of the draft’s circulation through the various ministries. He has received formal clearances from all of the ministries except Finance, and Industry and Commerce. He expects no trouble from Finance since financial experts were present in Washington. There are still several matters to be worked out with Industry and Commerce, and Juncosa Seré expects that the review of the draft treaty will be fully completed by the end of December. At that time, they will be prepared for the next round of negotiations. I tried to draw out of Juncosa their impressions of the treaty, its desirability, etc., but drew a blank. With his active mind and facile manner of expressing himself, Juncosa is able to give an impression of complete cooperation without actually committing himself very much.5
[Here follows a description of social arrangements made for Mr. Birgfeld’s visit.]
Sincerely yours,