Foreign Policy

February 1, 1946

Foreign Policy Association, Incorporated
VOLUME XXI       NUMBER 23       $.25 a copy       $5.00 a year

Page 308

Axis Ties with Argentina


    Although the war ended with Argentina nominally an Allied power,(1) there is abundant evidence that Axis interests in that country are not only relatively unmolested but are closely leagued with Colonel Juan Domingo Perón and members of the military government in the rearmament drive and in a program to extend Argentine hegemony over the River Plate basin. Until Buenos Aires terminated diplomatic relations with Germany and Japan, on January 26, 1944, Axis penetration into South America had been channeled through the German Embassy in that capital.(2) Its activities, according to a report issued in 1943 by the Emergency Advisory Committee for Political Defense of the Continent, located in Montevideo, were responsible for the loss of millions of dollars' worth of United States ships and supplies, as well as of the lives of hundreds of passengers when their ships were torpedoed.(3)
    After the break, however, the great German enterprises in Argentina took over the organization of financing of the Nazi movement. The amount of German investments in Argentina is large, its character is extremely diversified and has not apparently been appreciably altered as a result of World War II.(4) German investments are located in the electric, metallurgical, steel and chemical industries, in the construction industry—both civilian and military—and in sugar, cattle and other rural enterprises, and have been estimated to total 2,500 million pesos (about $600 million). This figure does not include, however, recent clandestine accumulations of Nazi fugitive capital. When it became clear that Germany would lose the war, a "safe haven" program was devised for the secretion of German economic assets in neutral countries where control could be retained through various "dummy" arrangements. In this fashion, it is believed that German capital and loot from occupied countries, and even experts and technicians, under assumed Spanish or Argentine identity, have been transferred to Argentina.
    The Argentine government on April 3, 1945 announced that 150 German subsidiaries, with an aggregate value of $40 million, had been confiscated and that government inspectors had been placed in control of these firms pending transfer to Argentine hands. Assistant Secretary of State Clayton stated before a subcommittee of the Senate Military Affairs Committee on June 25, 1945, however, that not one of 108 major Axis enterprises suspected by the Allies of being the spearheads of German economic penetration and espionage had been eliminated.(5) It is the contention of the United States that nothing less then complete liquidation of those Axis interests which figure on the United States and British "black lists" is adequate, and that at the time of the Clayton testimony—three months after Argentina had entered the war—only four of these "spearheads" were in the process of being eliminated. On November 30, 1945 of the directorate of the Enemy Properties Board, whose secretary charged Foreign Minister Juan Cooke with unwarranted interference with the committee's work, resigned in mass.(6)
    In addition, charges of complicity with Nazi espionage in Argentina have been brought against the police, the Ministry of War and the Foreign Ministry by Argentines as private citizens and in the press. In an article entitled "Nazi Germans are Well Protected," the Socialist Weekly La Vanguardia linked the names of Ludwig Freude, owner of the General Construction Company, Fritz Mandl, who possesses an interest in the IMPA arms corporation, and Ricardo Staudt, with the Foreign Minister.(7) These individuals have not only been given protection from deportation in a variety of ways but have also been the recipients of government contracts. In turn, they are alleged to have contributed large sums to Perón's Presidential campaign.
    The United States has taken cognizance of the military government's diversion of critical materials to the Axis firms which received its contracts.(8) It has also called pointed attention to the fashion in which certain Argentine newspapers, formerly subsidized by the German Embassy and now publishing freely under new identities, are supporting the Perón candidacy.(9) The Farrell government has not convincingly refuted these charges by either word or deed.

1. Argentina declared war on Japan and on Germany, "in view of the character of the latter as an ally of Japan," on March 27, 1945.

2. Sax Bradford, The Battle for Buenos Aires (New York, Harcourt, Brace, 1943).

3. First Annual Report of the Emergency Advisory Committee for Political Defense (Washington, Pan American Union, 1943).

4. Luis Victor Sommi, Los Capitales Alemanes en Argentina (Buenos Aires, Claridad, 1943). For a digest of this study, see "German Capital in Argentina," The Economist (London), September 22, 1945, pp. 416-18.

5. New York Herald Tribune, June 26, 1945.

6. Ibid., December 5, 1945.

7. Ibid.

8. State Department memorandum of July 26, 1944, Department of State, Bulletin, July 30, 1944.

9. On January 17, 1946 the U.S. Embassy in Buenos Aires released some of the documents uncovered in Berlin proving Nazi connections with Argentine government officials and Nazi control over a part of the press.