Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

199. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Holland) to the Secretary of State¹

Washington, November 17, 1955.

SUBJECT

• Argentine problem and US policies regarding it

Discussion:

Whatever Argentine government survives will be faced with the problem of reconstructing the national economy. It will call upon the United States for economic and military assistance. Its requests will probably be excessive, poorly documented and hysterical.

We should respond to these requests generously and constructively; but our response should be consistent with our announced policies; and we should only aid programs that have maximum prospects for a successful reconstruction of the Argentine economy.

While it is too early to say exactly what approach the new government will take to its economic problems, it would not be illogical to expect it to succumb to the temptation to request grant aid and soft loans. We should scrutinize any such requests most carefully.

We must remember that a number of European states and, perhaps, Russia will be glad to extend aid to Argentina, hoping to build up their own prestige and attain an advantage in future trading.

When Sam Waugh and I are in Buenos Aires, the Argentines will raise questions of US assistance with us. We can explain clearly our policies and intentions.

It seems to me that we should make the following points:

1. The United States is prepared to extend generous financial and military assistance to Argentina.

2. The amount and nature of our assistance will be consistent with our policies as they have been announced on many occasions.

3. Our economic assistance will be given only to programs which we believe will contribute effectively to the reconstruction of the Argentine economy. We have no desire to impose our thinking on the Argentine Government, but we do want them to understand that we will extend aid only where we feel that it will succeed and will not be uselessly dissipated.

4. The overwhelming responsibility for achieving national reconstruction must rest on the shoulders of the Argentine Government and people; that we feel reconstruction will require a substantial period of time, and is not an end that can be achieved over night.

5. We feel the most rapid and constructive approach would be for those aspects of the Argentine economic program in which we are asked to help to be discussed between technicians representing our two Governments; that such discussions can begin immediately either in Buenos Aires or in Washington.

Recommendation:

1. That the appropriate Department heads or inter-Departmental agencies of our Government make at this time the policy decision that when the conditions for extending aid which are outlined above are satisfied our Government will:

a. Extend such economic aid as at that time seems appropriate.

b. Extend such military aid as at that time seems appropriate and not productive of a harmful effect on the economy.

I suggest that this policy decision be made now in order that, when and if the conditions outlined above are deemed to be satisfied, we will not find ourselves then hampered by the necessity of seeking the initial policy decisions indicated here.

2. That the group which is visiting Argentina be authorized to discuss fully with Argentine Government officials all aspects of their present difficulties, and that we be authorized in the course of those discussions to indicate the desire of the United States Government to help generously, but under the terms and conditions outlined in this memorandum.

1. Source: Department of State, Central Files, 835.00–TA/11–1755. Confidential. Also addressed to Hoover. A notation on the source text indicates that “Prochnow concurs on assumption that discussions under point 2 are solely exploratory and no commitments made.”