Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

835.10/9–2953

Memorandum of Conversation, by Henry Dearborn of the Office of South American Affairs

confidential

[Washington,] September 29, 1953.

Subject:

• Meeting on Argentina between Ambassador Nufer and Officials of the Export–Import Bank

• Participants: Maj. General Glen E. Edgerton, Managing Director, Eximbank
• Mr. Hawthorne Arey, Assistant Director
• Mr. Lynn U. Stambaugh, Deputy Director
• Ambassador Albert F. Nufer
• Mr. Rollin S. Atwood, Director, Office of South American Affairs
• Mr. Henry Dearborn, Office of South American Affairs

Ambassador Nufer called on General Edgerton, Mr. Arey, Mr. Stambaugh and other officials of the Export–Import Bank this morning to discuss Argentina. It was soon evident from the conversation that the Bank officials principally desired to hear what Ambassador Nufer had to say with regard to the situation in Argentina and with regard to the State Department’s attitude toward loan applications received by the Bank for projects in Argentina. Ambassador Nufer’s principal purpose was to learn what the Bank’s attitude was toward applications for loans to finance projects in Argentina.

Ambassador Nufer outlined the political and economic situation in Argentina. He then referred to some of the conversations which he had had recently with American businessmen and to the interest of these businessmen in Argentine projects. He said that in his opinion if the Export–Import Bank or some other institution did not assist American exporters in holding their own in the Argentine market the Germans and other Europeans would increasingly crowd the Americans out of the picture. This was to some extent already taking place. The Ambassador made it clear that in his view, as a result of markedly improved US-Argentine relations since Dr. Milton Eisenhower’s visit to Buenos Aires last July, favorable consideration by the Bank of applications for loans to finance sound projects in Argentina was desirable. Mr. Atwood generally agreed with this view. He added, however, that the State Department did not believe that it should take the initiative in urging American businessmen to direct their attentions toward Argentina. On the other hand if American businessmen showed a definite interest in Argentina and themselves took the initiative in increasing their operations there, the Department woud certainly have no political objection to this trend of events and no objection to favorable action by the Export–Import Bank on loans to assist US private business operations in Argentina. However, Mr. Atwood stated that he thought the Department would not look with favor at this time and might well object to any loan to Argentina on a government-to-government basis.

The Bank’s position as expressed by General Edgerton and Mr. Arey was somewhat as follows: The Bank was prepared to consider relatively small loan applications from exporters. The Bank would probably not favor financing a loan for any such tremendous project as the $150,000,000 steel mill desired by the Argentines. General Edgerton pointed out that the Bank had a limited fund with which to work and that it followed a policy of diversification of its operations so that it would not have too much credit localized in any one place. This policy would probably prevent the Bank from becoming connected with any such large enterprise as the proposed Argentine steel mill. As examples of applications which might be considered favorably, Mr. Arey mentioned an application for $750,000 for road building equipment and a relatively small project in which Mathison Chemical Company was interested for the sale of fertilizer. Mr. Arey said he was rather doubtful about the Westinghouse International application for the improvement of the Buenos Aires electrical plant in view of the harsh treatment which the Argentine Federal and Provincial governments had given to American Foreign Power. Mr. Arey also mentioned that the Bank had been approached with regard to the proposed sale of 100 locomotives to Argentina by the Baldwin Locomotive Works. St. Joseph Lead Company was also interested in financial assistance. Finally, Mr. Arey said that only recently the Bank had been approached with regard to financial assistance for the development of coal fields in Argentina.

To supply the Bank with the necessary information for considering the increased number of applications which were coming in on Argentine projects, Mr. Arey said the Bank was conducting an over-all study¹ of the Argentine economic and financial picture. He said that as a result of this it might be determined that Argentina could not stand any further dollar indebtedness. On the other hand, the Bank might conclude that it would be desirable to go ahead on some relatively small projects up to a total of perhaps 30 to 50 million dollars. Any further action would have to await the conclusion of the over-all study. In any event, General Edgerton said that the Bank was glad to know the State Department would have no political objections to the favorable consideration of small loan applications if the Bank felt them to be economically desirable.²

1. Representatives of the Export–Import Bank visited Argentina several times during late 1953 and 1954; pertinent documents are in file 103 XMB for those years.
2. ln despatch 807, from Buenos Aires, dated Feb. 19, 1954, Ambassador Nufer stated that the Export–Import Bank should consider large-scale loans for projects in Argentina. The Ambassador further stated that the Embassy was not “unduly concerned over the possibility of any Argentine default,” but was “more concerned over the probability that our position and influence in this market will deteriorate seriously unless U.S. manufacturers receive assistance in competing for large-scale contracts.” (835.10/2–1954)