Memorandum from the Under Secretary of State to President Harry S. Truman, with Attachment

monehall May 19,1947 MEMORANDUM FOR THE PRESIDENT Subjects British Sale of Jet Planes to Argentina Until recently the British Government has respected our request that they refrain from selling aras to Latin America. However, on May 6, the British Ambassador presented an aide- memoire which pointed out the need to keep British shipyards and factories employed and United Kingdom dependence on Argentine good will for food supplies and stated that they could not withhold export licenses to British firms from whom the Argentine government is seeking military aircraft and naval vessels. The Secretary told the British Ambassador that he would have to give further study to the general arms question, but as to Argentina, he hoped the situation there would clear up in about three weeks and that thereafter we would no longer be in the position of having to request the British Government not to do this or that for Argentina. On Friday, May 16, the British Embassy informed us of the completion of a contract between a British firm and the Argentine Government for 100 jet fighter planes, costing over b 4 million, deliveries to begin this month. This action is unfortunate because a. It will seriously damage the prospects of obtaining final Argentine compliance on her commitments to expel dangerous Nazis, thus paving the way for resumption of more normal relations; b. It will disrupt the military balance of power and create a psychological unbalance in Latin America which will have deep repercussions and might well start an armaments race; C. It will place the United States in the position of appearing to withhold opportunities to U.S. business because of failure to expel a few Nazis while British commercial interests have noved in to establish large military markets in Argentina. Although