198. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Holland) to the Under Secretary of State (Hoover)1

SUBJECT

  • For Conversation with Treasury regarding Argentina

Discussion:

The Minister of Economy of the Lonardi Government, Dr. Cesar Bunge, when he was in Washington last week, confirmed that his Government was eager for U.S. credits. He said their most pressing problems were (1) a backlog of short-term commercial obligations of about $400,000,000; (2) conversion of its highly-regulated economy based on barter agreements into a free economy attractive to foreign capital; and (3) the development of the energy resources and transportation facilities needed for overall economic development. He said that his Government’s program for meeting these problems would depend on the amount and kind of help the U.S. would be willing to give.

Since that time the Lonardi Government has been replaced by the Government of Major General Aramburu. The economic situation has not, of course, changed, and there are no indications that the new administration will not be as pro-U.S. and as eager as the former for United States cooperation.

These problems will undoubtedly be raised during the visit Sam Waugh2 and I will be making to Buenos Aires during November 30–December 2.3 What we say there could influence the new Government’s attitude toward the United States and the implementation of its economic policies. I believe that this is a unique opportunity for the establishment of United States-Argentine relationships on a [Page 385] cooperative and mutually-beneficial basis which we should not allow to go by default.

Recommendation:

I recommend that we be authorized to speak in such a manner as to demonstrate U.S. sympathy and willingness to discuss these problems promptly with a view to such financial help as fits our policies and the facts as we find them. Naturally, should any obstacles to U.S.-Argentine cooperation develop between now and then this authorization need not be utilized.

  1. Source: Department of State, Central Files, 835.10/11–1555. Confidential. Drafted by Bernbaum. Copies were sent to Murphy and Prochnow.
  2. President of the Export-Import Bank.
  3. The trip to Argentina was part of a larger visit to five South American nations, November 17–December 3.