Agentina in World War II
At the outset of World War II, in September 1939, Argentina announced a position of "prudent neutrality" toward the belligerents. Its action was based on several factors: freedom of action in its relations with European nations was the keystone of Argentina’s foreign policy traditions; its neutrality during World War I had been domestically popular and made the Argentine economy prosper; it wanted to revitalize its economy after the disastrous impact of the Great Depression; and it saw itself as a counterweight in the south to the United States in the north.
Although Argentina agreed at the Havana Conference in 1940 that an attack on any American state would be considered an act of aggression against all American states, it insisted that any action undertaken in response to an attack was a matter for each state’s individual interpretation.
Nazi activities began in Argentina in the early 1930s and continued throughout the wartime period. When war broke out in Europe in 1939, there was a very large German population in Argentina. Some 60,000 of them belonged to the Nationalsozialistische Deutsche Arbeiterpartei, an organization of Germans living abroad. This organization controlled shipping lines, a special news service, and other entities in Argentina. Germans also had a great economic influence in Argentina, controlling a considerable part of the nation's industrial, chemical, pharmaceutical, and electrical goods production, and having a large part of the military and civilian construction.
German financial activities in Argentina centered around two large banks, Banco Aleman Transatlantico and Banco Germanico de la America del Sud. They were also involved in holding companies, organized in 1939 by Johann Wehrli & Company of Zurich, Switzerland. These companies maintained secret numbered accounts that were owned by Germans. The Germans also had insurance firms in Argentina, as well as being deeply involved in metallurgy, arms, and munitions.
Thus, it is not surprising that Argentina pursued a neutral policy after the United States entered the war in December 1941. It failed to induce Chile, Paraguay, and Peru, to form a neutral bloc. But it did continue to defy United States pressure to align itself with the Allies and ignored Allied recommendations and declarations to end all financial interaction, direct or indirect, with Nazi Germany. The Allies became particularly concerned about the operation within Argentina of subsidiaries of Germany's leading firms, including I.G. Farben, Staudt and Co., and Siemens Schucket. These firms maintained links with Germany throughout the war and supported major Nazi espionage operations in Latin America.
The Allied wartime blockade made it impossible for Argentina to provide substantial amounts of exports to Germany, which up until then had been one of its principal trading partners. But Buenos Aires, however, was one of the principal Latin American ports from which goods valuable even in small quantities, such as platinum, palladium, drugs, and other chemicals, were smuggled to the Axis.
Argentina, it should be noted, despite it economic and financial dealings with Nazi Germany, also had close economic ties to the Allies. Argentine exports to the United States and Great Britain (which depended on Argentine beef to help feed its population) rose dramatically during the war, essentially doubling their prewar volume.
Britain, which had substantial investments in Argentina and maintained much more important commercial relationships with that country than did the United States. Wartime Britain became even more dependent on imports from Argentina, especially meat. Britain ostensibly supported U.S. efforts to overcome Argentina’s neutrality and bring it into line with the general Western Hemisphere coordination against the Axis, but maintained reasonably cordial relations with Argentina and was unwilling to support a general embargo. Unlike the United States, Britain seemed content with Argentina’s neutrality, which offered protection for meat shipments against German U-boat attacks.
In 1944 US efforts to thwart German-Argentine commercial relations were given a new impetus by Argentine involvement in the December 1943 overthrow of the Bolivian Government by right-wing nationalist forces. Armed with evidence that the Argentine military regime had sponsored the overthrow and was plotting similar coups in other South American countries, the United States took several measures to escalate pressure on Argentina to break relations with the Axis, including sending ships from the South Atlantic fleet to the vicinity of Buenos Aires, moving to freeze Argentine assets, and threatening to publish evidence of the Argentine Government’s machinations against its neighbors and attempts to strike a secret arms deal with Germany.
By 1944 the United States and its Allies were growing increasingly concerned that Germany was seeking to move assets to the neutrals, including Argentina, in an effort to lay the basis for a resurgent Nazi state after Hitler’s inevitable military defeat. The Safehaven program aimed at identifying and thwarting these efforts by Germany. Strained US-Argentine relations hampered early investigations of German assets in Argentina.
A military coup d'etat in June 1943 and the uncovering of a Nazi espionage network, led Argentina to sever diplomatic relations with Germany and Japan on January 26, 1944. However, Colonel Juan Peron led a palace revolt and a new president, General Edelmiro Farrell, was installed. This regime gave open support to Axis-controlled firms and tolerated the dissemination of Axis propaganda. The change in power came less than a month after Ramirez’ January 26 announcement of the breaking of diplomatic relations with the Axis, leading the State Department to attribute Farrell’s accession to extremist, pro-Axis forces within Argentina.
Believing the new Argentine government was pro-Axis, the United States refused to recognize the Farrell government and recalled its ambassador in July 1944. The next month the United States began an economic pressure campaign through the blocking of Argentine gold deposits in the United States. The Argentine Government responded, in part, by granting German construction companies very lucrative contracts between June and September 1944.
Nevertheless, economic sanctions and diplomatic pressures resulted in the Argentine Government in October 1944 establishing an administrative council to control Axis firms. In November Axis bank and insurance companies were brought under Government supervision. In March 1945, the Argentine Government announced that intervened Axis construction and industrial establishments and banks would be liquidated and the proceeds blocked in the Argentine Central bank.
Eventually, the United States took a more conciliatory line towards Argentina and as a result of the Mexico City Conference (February-March 1945) and the steps it took regarding Axis assets. The Argentine Government issued a decree in March 1945 stipulating that Axis-controlled firms would be placed under goverment control and possession, but delayed taking action for so long that the managers of these firms had ample time to distribute or dissipate their assets.
Argentina formally declared war on the Axis powers on March 27, 1945 and the United States recognized the new Argentine government on April 9, 1945.
Following the end of the war, the State Department prepared a compendium of information on Argentina's support for the Axis cause, the Argentine "Blue Book," for use in consulting with the American Republics concerning the position that should be taken with regard to the military regime in Buenos Aires. The "Blue Book," published in February 1946, charged that where the German Government preferred to transfer from Europe, it found no serious obstacle in any Argentine exchange control regulations, and that the availability of these funds made possible the subversive activities in which German organizations were known to have engaged.
These activities included intervention in Argentine elections, press and propaganda subsidization, and purchase for shipment of strategic materials for the German war machine. The "Blue Book" also sought to demonstrate the continuing potential for Argentina to become a base for a resurgent Nazism.
By the end of 1946, however, American relations with Argentina began to improve and the onset of the Cold War renewed American desire for hemispheric alignment, contributing to the improvement in U.S.-Argentine relations.
The Act of Chapultepec of 1945 recognized the right of each of the Republics of the Western Hemisphere, including the United States, to dispose of Germany property within its own respective jurisdiction and retain the proceeds. Since the Farrell regime adopted the Chapultepec agreement when it finally declared war on the Axis at the end of March 1945, the Allies could not lawfully law claim to an estimated $200 million in German assets in Argentina.
Thus, the United States undertook no negotiations with the Argentine government regarding the identification and disposition of German external assets. The policy of the United States was to establish more friendly relations with Argentina following the criticisms contained in the State Department "Blue Book" on Argentina in early 1946. Argentina had resisted wartime Allied entreaties to freeze German assets and, by the end of 1947, American officials concluded that German assets were not identifiable by the Argentine government and no looted gold had reach Argentina.
After the war Argentina became a refuge for escaping Nazis, such as Adolf Eichmann, and those that had collaborated with them, such as Ante Pavelic. From 1946 onward a Nazi escape operation was based at the presidential palace in Buenos Aires, harboring such war criminals as Josef Mengele. An elaborate network relied on the complicity of the Vatican, the Argentine Catholic Church, and the Swiss authorities.
Operatives from Heinrich Himmler's secret service arrived in Madrid as early as 1944 to prepare an escape route; in 1946, this operation moved to Buenos Aires, establishing its headquarters in the presidential palace. Eventually, this operation's tentacles stretched from Scandinavia to Italy, aiding French and Belgian war criminals and bringing in gold that the Croatian state treasury had stolen from 600,000 Jewish and Serb victims of the Ustasha regime. Ingrained antisemitism, anticommunism, greed, and corruption all fortified these clandestine protection rackets.
It should be noted that Argentina also received some 25,000 to 45,000 Jewish refugees between 1933 and 1945. These number were higher than any other country in the Western Hemisphere, including the United States.
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