Bruce Plan Intervención Norteamericano Peronismo

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'Bruce Plan' and Marshall Plan: The United States's Disguised Intervention against Peronism in Argentina, 1947-1950 Author(s): Glenn J. Dorn Source: The International History Review, Vol. 21, No. 2 (Jun., 1999), pp. 331-351Published by: Taylor & Francis, Ltd.Stable URL: http://www.jstor.org/stable/40109006Accessed: 28-10-2015 13:58 UTC

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'Bruce Plan' and Marshall Plan:

The United States's Disguised Intervention against Peronism in Argentina, 1947-1950

GLENN J. DORN

United States' s charge d'affaires at Buenos Aires, John Moors Cabot, remarked in 1946 of the Argentine presidential candidate Colonel Juan Domingo Peron: 'Whenever we look around for a

really good stick with which to beat a certain gent, we never seem to be able to find one handy.'1 The statement illustrates how Good Neighbor pledges of non-intervention in the internal affairs of the Latin American states handcuffed the administration of Harry S. Truman as it sought to combat the Peronist movement in the late 1940s. Although Carlos Escude and C. A. MacDonald show how the United States and Britain used economic boycott and political manipulation to lever Peronist Argentina away from a statist economic programme,2 the Truman administration, which wished to draw all of the Latin American states in its train, saw that an open attack on or condemnation of Peron would backfire and tried to hide its leverage behind the facade of non-intervention.

Peron won the Argentine election of February 1946 by advocating 'social

justice' for working people and national development through 'populist' statism.3 At the heart of his economic programme was the Instituto

I thank Michael Hogan, Peter Hahn, G. Micheal Riley, Carlos Escude", and Edward Ingram for helpful criticism. 1 Cabot to Lockwood, 4 Jan. 1946 [Truman Library, John Moors] Cabot Papers, Argentina [microfilm]. 2 C. Escude: Gran Bretana, Estados Unidosy la declinaciSn argentina, 1942-9 (Buenos Aires, 1984); La Argentina: Paria international? (Buenos Aires, 1984); 'La historia, la cultura politica, los errores y las lecciones en las relaciones argentino-norteamericanos', in Argentina y Estados Unidos: Fundamentos de una nueva alianza, ed. F. A. M. Baize and E. A. Roca (Buenos Aires, 1997), pp. 181-206; 'La traicion a los derechos humanos, 1950-5', in La politica exterior argentina y sus protagonistas, 1880-

1995, ed. S. R. Jalabe (Buenos Aires, 1996), pp. 71-87; and C. A. MacDonald: 'The US, Britain, and

Argentina in the Post- War Period', in The Political Economy of Argentina, 1880-1946, ed. G. Di Telia and D. C. M. Platt (New York, 1986), pp. 183-99 and 'The US, the Cold War, and Per6n\ in Economic

Imperialism and the State: The Political Economy of the External Connection from Independence to the Present, ed. C. Abel and C. Lewis (London, 1985), pp. 405-14. 3 J. M. Malloy, 'Authoritarianism and Corporatism in Latin America: The Modal Pattern', in Authori- tarianism and Corporatism in Latin America, ed. J. M. Malloy (Pittsburgh, 1977), pp. 3-19; G. O.

The International History Review, xxi. 2: June 1999, pp. 285-568. cn issn 0707-5332 © The International History Review. All International Rights Reserved.



332 Glenn 7. Dorn

Argentino para la Promotion del Intercambio (IAPI), a state import-export monopoly headed by a former tin magnate, Miguel Miranda. IAPI purchased the bulk of Argentina's harvest from an agrarian elite which had

traditionally 'raised fat cows and thin peons', to sell it abroad at a consider- able profit, and reinvest it in state-sponsored industry and 'national development'.1 In theory, IAPFs state-trading practices and bilateral barter tech- niques would enable technocratic Peronists to guide the national economy, facilitate modernization, redistribute wealth, and, most important, secure Argentina's 'economic independence'.2 Peron claimed that this approach to economic development was tantamount to a 'Third Position' between capitalism and Communism suited to most developing nations.

Peronists correctly assumed that the 'enormous transformation' effected

by Peron had captured the 'attention of the world at this time, and espe- cially that of the Americas'.3 Hoping to encourage the spread of the sentiment 'what we need here is a Peron,'4 Peronist emissaries became, in the words of US labour leaders, an 'indefatigable task force' railing against 'Yanqui Imperialism, racial discrimination, and [the] exploitation of Latin American workers by American corporations'.5 Peron himself cultivated

relationships with prominent nationalists and revolutionaries throughout Latin America: he sheltered the future three-time president of Bolivia, Victor Paz Estenssoro, throughout the late 1940s,6 maintained ties with General Carlos Ibanez del Campo, twice president of Chile,7 and gave financial help to young radicals such as the Cuban Fidel Castro Ruz. General Manuel Odria, president of Peru from 1948 to 1956, was a long-

O'Donnell, 'Corporatism and the Question of the State', ibid., pp. 47-81. 1 Mann to Brown, 20 Dec. 1945 [Washington, United States National Archives and Records Admin- istration, Record Group 59], S[tate] Department] Djecimal] F[ile] 835.00, and Primera Plana, 19 July 1966, pp. 40-1. 2 A. Cafiero, Cinco anos despues (Buenos Aires, 1961), pp. 222-7; Ministerio de Economia de la Nacion, Institute) Argentino de Promoci6n del Intercambio: Memoria Anual, Ejercicio 1949 (Buenos Aires, !95o), PP- 9-12, appendix; P. Lewis, The Crisis of Argentine Capitalism (Chapel Hill, 1990), pp. 159- 61, 178-81; F. Luna, Peron y su tiempo (Buenos Aires, 1984), ii. 145-7, 175"7- 3 Embajada Lima, 'Memoria anual', 1947 [Buenos Aires], Afrchivo del] M[inisterio de] R[elaciones] E[xteriores y] C[ulto, Departamento Politica], Peru 1947, caja 12, expediente 5. 4 Oderigo to Bramulgia, 21 March 1947, ibid., expediente 1. 5 Kyne and Schwarz Report on Trip to Latin America, 27 Oct. 1949 [Detroit, Walter Reuther Archives, James] Carey Papers, box 84. 6 R. Alexander, The Bolivaran Presidents: Conversations and Correspondence with Presidents of Bolivia, Peru, Ecuador, Columbia, and Venezuela (London, 1994), pp. 15-17; Codazzi to Sosa Molina, 21 Oct. 1948, AMREC, Bolivia 1948, caja 1, expediente 1; D. O. E. Esparue, 'Memorandum Secreto', n.d., AMREC, Bolivia 1948, caja 1, expediente 1. 7 L. Machinandiarena de Devoto and C. Escude, 'Las relaciones argentino-chilenas, 1946-53, y las ilusiones expansionistas del peronismo', in Argentina-Chile: Desarrollos paralelos, ed. T. di Telia (Buenos Aires, 1997), pp. 190-200; and M. de Devoto, 'La influencia del justicialismo en Chile, 1946- 52' (Ph.D. diss., Buenos Aires, 1995), esp. ch. 3.



The United States in Argentina 333

time admirer,1 and even Communists such as the Brazilian Luis Prestes, were quick to praise Peron as a fellow 'crusader against capitalism'.2 Although Peron tried to placate US officials by asserting that his denun- ciation of capitalism was only 'for internal consumption' within Argentina, and declared in 1946 that he would stand with the United States in the event of a third World War,3 he undeniably sought the prestige of being seen as an anti-imperialist voice for Latin America's working class and a 'competitor for the leadership of Latin America'.4

Just as serious as Peron's rhetorical efforts to expound on the merits of his system, however, was Miranda's work Ho economically re-create the Viceroyalty of La Plata', 'free ourselves from foreign tutelage', 'reorient the commerce of Latin America' away from US and European domination, and pose as the new financier of South American industrial development.5 Beginning in late 1946, Miranda negotiated a series of commercial treaties with other South American countries designed to facilitate Argentine industrialization, encourage ecoliomic ties with its neighbours, and block 'Yankee imperialism which has to be combatted in South America'.6 Deter- mined to reverse Peru's 'gravitation towards the United States'7 and to

strengthen ties with the complementary economy of Chile, in late 1946 Miranda offered both states loans and trade pacts. He made similar offers to Bolivia in the hope that Argentine economic 'penetration' might lead to a change in its 'social attitude' and traditional pro-US diplomatic orienta- tion.8 Underlying the offers was the assumption that North American and

European corporations, with the complicity of local vendepatria elites, had retarded Latin American industrialization, which only state planning could

rectify. The Argentine ambassador to Chile, Julio Lopez Mufiiz, told a

1 Oderigo to Paz, 12 Jan. 1950, encl. B, AMREC, Peru 1949, caja 28, expediente 11; same to same, 11 Aug. 1949, AMREC, Peru 1949, caja 28, expediente 8; Embassy Lima to Paz, 8 Sept. 1949, AMREC, Peru 1949, caja 28, expediente 9; Bowers to sec. state, 7 Dec. 1948, SDDF 825.00. 2 Davis to Flack, 15 March 1946 [USNA, RG 59], [Office of] A[merican] Republics] A[ffairs], memoranda on Argentina, vols. 5, 6; M. Rapoport, Politico, y diplomacia en la Argentina: Las relaciones con EEUUy la URSS (Buenos Aires, 1986), pp. 24-5. 3 A. C. Paz and G. Ferrari, Politica exterior argentina, 1930-62 (Buenos Aires, 1966), pp. 140-1; see also, Ray to sec. state, 8 Aug. 1947 [USNA, RG 59, Records of the] P[olicy] P[lanning] S[taff, 1947- 53], lot file 64 D 563, box 8. 4 Escude, La Argentina: Paria international?, p. 34; H. Gambini, La primera presidencia de Peron (Buenos Aires, 1983), p. 62. 5 Miranda interview in Zig-Zag, 23 Jan. 1947, AMREC, Chile 1946, caja 10, convenio, legajo 2, expediente 4; Review of the River Plate, 10 Jan. 1947, p. 19; A. Cafiero, La politica exterior Peronista, 1946-55: sobre lafalacia del 'ntito aislacionista' (Buenos Aires, 1996), pp. 54-5. 6 Flack to sec. state, 27 Dec. 1947, SDDF 724.35; see also, Movimiento Revolutionano de Bolivia , 21 July 1946, AMREC, Bolivia 1946, caja 1, expediente 1, anexo 2, parte 1. 7 Oderigo to Bramulgia, 21 March 1947, AMREC, Peru 1947, caja 12, expediente 1; see also, Embajada Lima, 'Memoria anual', 1947, AMREC, Peru 1947, caja 12, expediente 5. 8 B. Carrillo, memo, 28 Nov. 1947, AMREC, Bolivia 1947, cajai, expediente 10, especial.



334 Glenn J. Dorn

Chilean audience in April 1948: 'We cannot talk of an important building up of commercial intercourse on an exclusively private initiative basis, because the problems which we are facing are of such magnitude that they escape the scope of private solutions.'1

For the Truman administration, however, Peron's statist approach appeared to be the resurrection of the nationalist tactics used by European Fascists in the 1930s. In the eyes of the United States, excessive statism had

spawned 'unnatural' or 'artificial' industries, constricted global trade, and led to depression and war. Although Peronism had little in common with

European Fascism,2 US policy-makers believed that the two movements shared a commitment to a nationally 'organized community' and government-driven economic development. In this regard, Peron appeared to be

'keeping the old pirate flag afloat93 and endangering their efforts to create a liberal capitalist world order based on multilateral trade, freely convertible currencies, and private enterprise.

Although the Truman administration conceded that 'Argentine co-operation is something less than a prerequisite for a successful system of international commercial liberalism,' it claimed nonetheless that the spread of Peron's brand of economic nationalism might 'mean the breakdown of any efforts toward economic peace'.4 Even if the emergence of Peronism in

Argentina did not constitute a direct threat to vital US interests, the state

department feared that Peron's victory would encourage revolutionaries

throughout the hemisphere to imitate him. Although the United States

hoped to convince Latin Americans that they would prosper only by ad-

hering to the rules of American-style liberal capitalism, its appeal seemed hollow when compared to populism such as Peron's that offered immedi- ate, undeniable benefits to the working class and eventual 'economic independence'.5

Despite fearing that the 'Peron myth might easily spread all over Latin America',6 and being 'constantly embittered by being kicked in the rear

1 Bowers to sec. state, 23 April 1948, SDDF 625.3531; M. Plotkin, Mariana es San Peron: Propaganda, rituales politicos, y education en el regimen peronista, 1946-55 (Buenos Aires, 1994), pp. 53-4. 2 C. Buchrucker, Nacionalismo y Peronismo: La Argentina en la crisis ideologica mundial, 1927-55 (Buenos Aires, 1987), esp. pp. 318-35,392-403 and 'Interpretations of Peronism: Old Frameworks and New Perspectives', in Peronism and Argentina , ed. J. P. Brennan (Wilmington, 1998), pp. 4-9. 3 Bowers to Braden, 13 March 1946 [Indiana University, Lilly Library, Claude] Bowers Papers, ii. box 6. 4 State dept. memo., 'Argentina's Post-War Economic Policies', 21 March 1946, SDDF 835.50. 5 M. Grow, The Good Neighbor Policy and Authoritarianism in Paraguay: United States Economic Expansion and Great-Power Rivalry in Latin America during World War II (Lawrence, 1981 ), pp. 113- 18; D. Green, The Containment of Latin America: Myths and Realities of the Good Neighbor Policy (Chicago, 1971). 6 Romualdi, draft of speech at Rutgers University, 9 June 1947 [Cornell University, M. C. Catherwood Library, Serafino], Romualdi Papers 5459/1/6.




when they weren't looking'1 by Argentine propaganda, by 1947 Truman's lieutenants, like their Peronist adversaries, recognized that open US attacks on Peron were 'erroneous and counterproductive' and to the 'direct detriment of the prestige' of the United States.2 When the ambassador at Buenos Aires and, after 2 August 1945, assistant secretary of state, Spruille Braden, meddled openly in Argentine politics in 1945 and 1946 to prevent Peron's election, he only helped Peron to rally Argentine nationalists to his cause and transformed the presidential campaign into a referendum on US interventionism.3 Similarly, when Serafino Romualdi, an official of the American Federation of Labor, visited Buenos Aires in early 1947 and urged Argentine unionists to renounce Peronism, Peron, who learned of these 'imperialist plans' to 'separate General Peron from the workers', used them as a pretext to establish greater control over the Argentine labour movement.4 Conflicts with the United States not only strengthened Peron's position at home and broadened his appeal as a defender of Argen- tine sovereignty, but 'unilateral blasts' such as Braden's also 'alienated people throughout the hemisphere, including many who have hitherto

opposed Peron'.5 'The worst of it', Cabot concluded, 'is that even Peron's

opponents in Argentina will resent further attacks on Peron, and the other American Republics are apparently getting rather tired of our attitude.'6

Cabot, like other state department officials, recognized as early as 1946 that Braden's dogmatic, belligerent approach was tearing the Good Neigh- bor policy 'into ribbons'7 and, in the process, undercutting efforts to erect a global liberal capitalist order. The principle of non-intervention laid down by Franklin D. Roosevelt in the 1930s as a component of his Good

Neighbor policy implied that 'Wall Street Imperialism' and heavy-handed interference in Latin America had jeopardized US interests by provoking nationalist resentment. New Dealers argued that by repudiating the 'big stick' and building good will, US corporations would expand in Latin

1 Griffis to Miller, 1 Aug. 1950 [USNA, RG 59], R[ecords of the] Assistant] Secretary of] S[tate for Latin American Affairs], lot file 53 D 26 [subject file, Argentina]. 2 Luti to Cooke, 30 Jan. 1946, AMREC, EEUU 1946, caja 2, expediente 2. 3 G. Frank, Juan Peron vs Spruille Braden (Lanham, 1983); C. A. MacDonald, 'The Braden Campaign and Anglo-American Relations in Argentina, 1945-6', in Argentina between the Great Powers, ed. G. Di Telia and D. C. Watt (London, 1989), pp. 137-57; M. Rapoport, Gran Bretana, Estados Unidos,ylas closes dirigentes argentinas: 1940-5 (Buenos Aires, 1981), pp. 271-8; A. P. Vannucci, 'The Influence of Latin American Governments on the Shaping of United States Foreign Policy: The Case of US- Argen- tine Relations, 1943-8', Journal of Latin American Studies, xviii (1986), 355-82. 4 Periodico Seminal de la CGT, 16 March 1947, 1 (microfilm) [Buenos Aires], F[undaci6n] S[im6n] R[odnguez, Archivo de Historia del Movimiento Obrero]; see also, Luna, Perdn, pp. 111-20. 5 Cabot to Pepper, 3 June 1946, Cabot Papers, Argentina. 6 Cabot to Pepper, 1 April 1946, Cabot Papers, Argentina. 7 Cabot to Cochran, 14 Dec. 1945, Cabot Papers, Argentina; see also, Sumner Welles, Where Are We Heading? (New York, 1947), pp. 215-18.



336 Glenn J. Dorn

America promoting 'sound' economic growth. Even if non-intervention

always was, in Irwin Gellman's words, 'only an illusion',1 Braden's un-

popular campaign and the Truman administration's apparent indifference to Latin American economic development raised valid fears across the

hemisphere that Truman had exchanged the Good Neighbor policy for the 'classic imperialist program of Yanqui capitalism'.2 At a time when Latin Americans were demanding reform and economic development, the United States could not afford to be seen as an impediment; it would be all too easy, Cabot warned, to destroy Latin America's 'confidence in our intentions' and do damage that 'may take decades for us to repair'.3

Aware that the very word 'intervention' 'raised hackles on the back of

every politician as far south as Cape Horn', summoned up 'visions of war-

ships and marines', and gave credence to rhetoric like Peron's, state

department officials recognized by 1947 that they would have to wield 'a

rapier, not a meat axe' if they hoped to derail statist experiments.4 More- over, clashes with Peron only polarized the hemisphere, opening wedges that Communists or British firms might exploit and endangering US efforts to negotiate a regional military alliance.5 Therefore, in April 1946, the Tru- man administration began lifting most of the formal economic sanctions

against Argentina, forced Braden to resign as assistant secretary of state in

June 1947, and decided not to engage in fruitless propaganda battles with Peron. Furthermore, the state department refrained from publicly criti-

cizing Argentina's offers of trade pacts to its neighbours for fear of tarnish-

ing Latin American opponents of the treaties with 'the demagogic charge of Yankee pressure'.6 The administration was committed nonetheless to

ending Argentina's statist experiment, and to doing it without turning Peron into a martyr.

In July 1947, Truman appointed James Bruce, an executive with the National Dairy Products Corporation and a relative novice at diplomacy, ambassador to Argentina and told him to carry out the new policy. From the start, Bruce and his experienced assistant, Guy Ray, understood the

1 1. F. Gellman, Good Neighbor Diplomacy: United States Policies in Latin America, 1933-45 (Baltimore, 1979), p. 38; see also B. Wood, The Dismantling of the Good Neighbor Policy (Austin, 1985), ix-xiv. 2 Periodical Seminal de la CGT, 16 Jan., 1 March 1946, 1, FSR, 1 Jan. 1947, 1-3; E. A. Cobbs, The Rich

Neighbor Policy: Rockefeller and Kaiser in Brazil (New Haven, 1992), pp. 236-43; Green, Containment of Latin America, pp. 170-83. 3 Cabot to Cochran, 14 Dec. 1945, Cabot Papers, Argentina. 4 Cochran to Cabot, 4 Jan. 1946, Cabot Papers, Argentina; Bohan to Bowen, 1 Feb. 1973 [Independ- ence, Mo., Truman Presidential Library], Merwin Bohan Papers, Correspondence File, Argentina. 5 E. R. May, 4The "Bureaucratic Politics" Approach: US-Argentine Relations, 1942-7', in Latin America and the United States: The Changing Political Realities, ed. J. Coder and R. R. Fagen (Stan- ford, 1974), pp. 143-8; R. R. Trask, 'The Impact of the Cold War on United States-Latin American Relations, 1945-9', Diplomatic History, i (1977), 274-8. 6 Bowers to Byrnes and Braden, 31 Dec. 1946, SDDF 625.3531.




risk from overt intervention: 'It would be a mistake', Bruce argued, to 'per- mit the impression that we are deliberately bringing pressure on Argentina to bring the Administration to its knees,' if only because 'such action would alienate all sectors of local opinion.'1 Therefore, he disguised his 'moral disapproval' of Peron and his disdain for Argentines, whom he believed 'harbor a desire to dominate the hemisphere'.2 Rather than give Peronists a 'cold shoulder', Bruce and Ray opted to be 'completely friendly with Peron, obtaining what advantages and concessions we can from him, and using our influence to prevent him from extreme actions prejudicial to our interest and solidarity in the hemisphere'.3 He should be turned from a potential rival into a client.

As MacDonald shows, Bruce and Ray, like the British, understood almost immediately that the key to turning Peron away from state corporatism was to separate him from IAPI and Miranda.4 This would be difficult only as long as Miranda's programme appeared to succeed. As Miranda had been given almost complete control over and responsibility for Argen- tina's economic development, the failure of the economy would discredit him with Peron,5 and discredit Peron's alternative to liberal capitalism with the 'neighboring countries who may be tempted to follow Argentina's example'.6 A destitute Argentina would no longer be able to offer enticing loans to its neighbours, or trumpet its 'economic independence' from

foreign domination.7

By the time Bruce arrived at Buenos Aires in July 1947, it was already clear to US officials that the Argentine economy was headed for collapse.8 Only a year after the launch of Peron's ambitious 'Five-Year Plan' and drive for modernization, it was draining his treasury rapidly, and IAPI was not replenishing it as well as expected. The post-war international monet-

ary crisis, which left Argentina fearing the devaluation of the huge sterling balances it had earned during the war, forced IAPI to squander valuable

foreign exchange on unnecessary, if popular, projects such as the nationalization of British-owned railroads and the repatriation of Argentina's foreign debt. In September, however, Britain struck the most serious blow

1 Bruce to sec. state, 2 July 1948, SDDF 835.50. 2 J. Bruce, Those Perplexing Argentines (New York, 1953), pp. 316-17. 3 Dearborn to Tewksbury, Ohmans, Martin, Woodward, and Wright, 'General Situation: Argentina', 22 Sept. 1947, ARA, Memoranda] R[elating to] Individual] C[ountries], Argentina. 4 MacDonald, 'The US, Britain, and Argentina', pp. 183-99; Ray to sec- state> 22 July 1948, SDDF 7U-35- 5 Bruce to sec. state, 6 Oct. 1947, bDDb 835.50; MacDonald, ' 1 he US, Britain, and Argentina7, p. 194. 6 Embassy Buenos Aires to Tewksbury, 29 April 1948, SDDF 611.3531. 7 Bowers to Leche, 2 Oct. 1947, Bowers Papers, 11. box 6; Bowers to Armour and Daniels, 18 Nov. 1947, SDDF 625.3531- 8 Ohmans to Tewksbury et al., 8 July, and Dearborn to Atwood et al., 'Recent Activities of Am- bassador Bruce', 18 Sept. 1947, ARA, MRIC, Argentina.



338 Glenn J. Dorn

to Peron by declaring sterling inconvertible, thus ending a long-standing and, for Argentina, lucrative triangular trade. Traditionally, Argentines had prospered by selling foodstuffs to the British, converting the sterling to dollars, and buying raw materials, capital goods, and machinery in the United States; without the triangular trade, Miranda was unable to replen- ish the dollars spent implementing the Five- Year Plan.1 Thus, the 'New

Argentina' was headed towards destitution, and Bruce had the task of

ensuring that it found no way around it. The United States was singularly well equipped for the task, as Peron

and Miranda's best hope of staunching their 'dollar drain' lay in the US-

sponsored and administered European Recovery Program (ERP), com-

monly known as the Marshall Plan. Although the programme had been created to facilitate the reconstruction of Western Europe, it nonetheless

promised peripheral benefits to Latin America. The Economic Co-

operation Administration (ECA) would allocate Marshall Plan dollars to

European states to spend in the Western Hemisphere through a programme labelled offshore procurement, and Latin American states would earn the dollars they needed to restimulate the triangular trade. The

secretary of state, George Marshall, estimated the amount they might earn as high as $10 billion,2 and Argentina seemed to be set up to take the lead. Howard Bruce, the ECA's acting administrator and the ambassador's cousin, seemed to agree; he estimated in December 1948 that Argentina might receive 'several hundred million dollars' in sales through the Mar- shall Plan.3

The ambassador, however, reminding his superiors that 'the United States is the lifeline to the Argentine,' argued in December 1947 that the United States should limit dollar expenditures in Argentina.4 If Peron were allowed to acquire dollars 'without any conditions attached, we would have no ammunition for trading purposes': thus, the state department should set up the Marshall Plan in a way that gave the US government 'discretion in permitting Argentina to benefit'.5 Nonetheless, this must be

1 G. Di Telia and M. Zymelman, Las etapas del desarollo economico argentino (Buenos Aires, 1967), pp. 492-7; J. Fodor, 'Per6n's Policies for Agricultural Exports: Dogmatism or Commonsense?', in Argentina in the Twentieth Century, ed. D. Rock (London, 1985), pp. 135-61 and 'Argentina's Nation- alism: Myth or Reality?', in The Political Economy of Argentina, IQ46-83, ed. G. Di Telia and R. Dorn- busch (Pittsburgh, 1989), pp. 32-53; Fodor and A. O'Connell, 'La Argentina y la economia atl£ntica en la primera mitad del siglo', Desarrollo EconSmico, xlix (April-June 1973), 3-66; Lewis, Argentine Capitalism, pp. 181-205. 2 Review of the River Plate, 14 Nov. 1947, p. 12. 3 Daniels to sec. state, 22 March 1949, SDDF 835.50; see also Lovett to Clifford, 27 Jan. 1948, [Truman Library, Harry S.] Truman Papers [President's Secretary Files, Foreign Affairs], Argentina. 4 Bruce to sec. state, 24 Dec. 1947, SDDF 635.4131. 5 Same to same, 26 Dec. 1947, SDDF 835.4131; Dearborn to Atwood and Martin, 'Ambassador Bruce holds Discussion with Dr Alberto Gainza Paz and Felipe Espil', 21 Oct. 1947, ARA, MRIC, Argentina;




done surreptitiously: 'it will antagonize even the Argentines who are our friends if we appear to gloat over Argentina's present discomfiture. n Ray added that provided the Marshall Plan did not inadvertently rescue Peron, 'Argentina's dollar situation is deteriorating rapidly, and things will come to a head within the next few weeks in such a way that it will be easier for us to deal' with him.2

Bruce did not need to convince the ECA's 'Wall Street wolves'3 to limit offshore procurement in Argentina: they had already come to the same conclusion. The Truman administration had created the ECA not only to allocate resources to Europe, but also as a weapon in its global campaign to bring down trade barriers. In short, its function was to promote multilateral trade and US-style liberal capitalism, while 'discouraging] totalitar- ianism and highly centralized governments'.4 Not only was I API in clear violation of US principles, but many accused it of trying to profit from the global food shortage. Seeing bilateralism, statism, and IAPI's 'economic blackmail' as malevolent relics of the 1930s, ECA officials saw no reason to reward Peron's Argentina for the sort of behaviour it had been set up to eliminate in Europe. On the contrary, in the oft-cited words of one ECA official, D. A. FitzGerald, it was a 'good time to beat the Argentine to its knees'.5

To that end, the ECA's assistant deputy administrator, Richard Bissell, told the senate Appropriations Committee on 25 May 1948 that no purchases 'are contemplated in the near future in Argentina, and none whatever will be made so far as we control them'. European states would be told that 'present ECA policy [was] not to approve procurement authorizations for materials from Argentina.' The ECA ignored Argentina's surpluses, for example, when it told an Italian delegation that not enough wheat was available to meet Italy's needs for 1948. The Greeks, too, were warned off; they were told that the 'prohibition [against] Argentina continues'. And FitzGerald stipulated in August 1946 that meat must be purchased from states other than Argentina regardless of price.

The ECA did not tell the Argentines the real reason for their exclusion, telling them instead that IAPI's high prices were incompatible with congressional mandates for austerity. As one ECA official inquired of the

Bruce to sec. state, 26 Dec. 1947, SDDF 835.4131. 1 Bruce to sec. state, 2 July 1948, SDDF 835.50. 2 Ray to Lyon, 17 Nov. 1947, ibid. 3 M. J. Hogan, The Marshall Plan: The United States, Great Britain, and the Reconstruction of Western Europe, 1947-52 (Cambridge, 1988), p. 138. 4 Embassy Buenos Aires to Tewksbury, 29 April 1948, SDDF 611.3531; see also, Labouisse to Brown, 21 June 1949, SDDF 635.4131. 5 State dept. memo, 'Instances of Apparent Discrimination', 25 Jan. 1949, Truman Papers, Argentina; Escude, Gran Bretana, pp. 215-21,322-9; MacDonald, 4The US, Britain, and Argentina', p. 192.



340 Glenn J. Dorn

Argentines, 'why should we pour dollars down here for something we can

buy cheaper elsewhere?', adding that the Peronists should lower grain prices to attract Marshall Plan officials and European purchasing mis- sions.1 Nonetheless, Argentina's pricing policies were little more than a convenient pretext. Miranda, desperate, had repeatedly announced his

willingness to lower IAPFs prices,2 and FitzGerald's directive illustrates all too clearly that price was not of concern. The ECA, which knew that Miranda would do as he was told, refused to open negotiations that would

give him the opportunity.3 Unfortunately for Peron, the ECA was not content simply to deny

Argentina access to ERP dollars. In theory, IAPI could continue to negotiate directly with Europeans as long as they did not spend the Marshall Plan dollars the Argentines wished to obtain. Throughout 1948, however, the ECA claimed the right to 'supervise' a number of transactions that fell outside its jurisdiction. In August, ECA officials offered to allocate ERP dollars to enable Italy and France to buy US wheat in order to weaken Miranda's bargaining position and drive down the price of Argentine wheat, lard, and corn. In order to block sales by Argentina, the ECA on other occasions offered dollar subsidies for purchases in other Latin American countries or in the United States. The ECA also repeatedly urged Argentina to sell to European countries at lower US prices and barter for costly European products: as US goods were cheaper than Euro- pean ones, Argentines believed that if they were forced to sell at US prices, they should be able to buy at US prices. All in all, throughout 1948 the ECA financed a meager $1.1 million of purchases from Argentina, while purchases from Canada, Australia, and other food-producing countries were financed to the tune of $360 million. Even if the ECA was not responsible for Argentina's deepening economic crisis, it deliberately impeded its recovery and, as Escude shows, did lasting economic damage as a result.4

Unfortunately for the Truman administration, FitzGerald, Edward Kunze, and other ECA officials were not content with their back-room efforts, and boasted openly of Argentina's exclusion.5 When the Journal of Commerce published their remarks in November 1948, it violently re- kindled anti-US nationalism in Argentina. Mobs of portenos (residents of Buenos Aires), already angered by allegations that a US citizen had

1 Ibid. 2 Marshall, memo for pres., 18 Feb. 1948, Truman Papers; Bruce to sec. state, 15 Nov. 1947, SDDF 835.61311; Ray to Lyon, 17 Nov. 1947, SDDF 835.50. 3 Review of the River Plate, 18 June 1948, pp. 8-10. 4 State dept. memo, 'Instances of Apparent Discrimination', 25 Jan. 1949, Truman Papers, Argentina; see also Bruce to sec. state, 31 Jan. 1948, SDDF 611.3531. 5 La Prensa, 11 Nov., p. 4, 19 Nov. 1948, p. 3.




conspired to kill the Perons, held what Bruce called 'a first-class anti- United States demonstration' in front of the US embassy, 'carrying scaf- folds and nooses'. Furious after spending three hours at the Casa Rosada 'listening to Argentine complaints', Bruce wrote in mid-December to Tru- man and Marshall to complain about the ECA's 'latest atrocities'. Although he had 'no particular sympathy' with Peron's government, he saw no reason why Argentina should be 'crucified in the press' by 'every jackass minor official who happens to hold a clerkship'. Bruce urged the administration to 'bring out the big stick on those boys and give them hell,' warning Truman that unless 'a tough Democrat' taught the 'flock of long- haired boys' at the ECA 'that you're the only person who knows how to run your own show', the ECA's 'inferior and worthless showoffs' would undercut the state department's work in Argentina.1

Bruce's vehemence underscores the threat posed by the ECA's careless- ness. State department officials understood that 'if an economic bust comes', Peron would not 'bear the brunt of the blame but instead will shift it to our shoulders' if he could.2 Moreover, Miranda would be able to preserve political support for his economic programme by claiming that 'he was being overwhelmed by Yankee imperialism' as he put up 'a gallant fight for the poor Argentines'.3 By publicizing its intentions to punish Argentina, the ECA had needlessly triggered a nationalist backlash similar to the one Braden had provoked in 1946. Bruce did not object to the ECA's effort to deny dollars to Argentina - indeed, he had all but suggested it - but to suit US policy-makers, the failure of Peronism had to

appear to be the result of flaws inherent within statism, not another instance of US imperialism.

In response to Bruce's protests and a concerted effort by his backers in

Washington, Truman and the head of ECA, Paul Hoffman, announced that they 'would now welcome ECA purchases in Argentina as elsewhere'.4 Nonetheless, the boycott continued throughout 1949 and 1950, as the Marshall Planners persisted in bringing 'every pressure we are able to exert' to bear in the promotion of multilateral trade.5 Bruce had succeeded in muzzling the ECA without loosening its stranglehold on the Argentine export trade. In 1949, Bruce did protest once that ECA discrimination had forced the Argentines to sign a long-term, bilateral treaty with the British.

1 Bruce to Truman, 13 Nov., to sec. state, 17 Nov., to Marshall, 19 Nov. 1948, SDDF 711.35; see also, R. Giacalone, 'From Bad Neighbors to Reluctant Partners: Argentina and the United States, 1946-50' (Ph.D. diss., Indiana, 1979), pp. 186-7. 2 Maleady to sec. state, 4 May 1949, SDDF 711.35. 3 Bruce to sec. state, 21 Jan. 1949, SDDF 711.35. 4 Tewksbury to Bruce, 25 Jan. 1949, Truman Papers, Argentina; memo of con., Tewksbury et al., 14 March 1949, SDDF 835.4131. 5 Labouisse to Brown, 21 June 1949, SDDF 635.4131.



342 Glenn J. Dorn

However, the fault here also rested with the British, who refused to request ERP funding for purchases in Argentina for their own reasons, and senior officials in the Division of American Republics Affairs requested that Bruce not press the issue.

Although Bruce may not have appreciated the significance of his actions at the time, he had launched what British journalists came to call the 'Bruce Plan'. His vocal efforts on behalf of the Argentines, 'charming blandishments' to Peron, and seemingly 'sincere protests' against the ECA earned him Peron's gratitude and trust, for Bruce seemed to have acted

boldly and defiantly to help Argentina against his own countrymen, and even his own cousin.1 Peronists misinterpreted Bruce's protests, however, because they failed to understand that he was not trying to help them, only to convince the ECA to 'lay off putting anti- Argentine propaganda in the

press.'2 Peron, who later described the Marshall Plan as an act of 'economic aggression',3 seems to have overlooked Bruce's role in it. Whereas the Argentines had seen that previous bureaucratic disputes within the US

government had only been about the proper 'method or procedure to attain the same end', they failed to discern the resemblance in Bruce's feud with the ECA. Both the ECA and the state department were striving to build a global, liberal capitalist order: the ECA staff, primarily specialists in

European finance, had merely not understood the importance of hiding their work 'underground' in order to appear the 'Good Neighbor'.4

On the surface, the Bruce Plan involved little more than trying to convince Argentines that the state department was trying to help Argentina out of its financial difficulties and, to this extent, Bruce's well-publicized efforts were successful. Ray was able to make the astonishing, and exaggerated, claim that anti-US sentiment had 'virtually disappeared' in Argentina as a result.5 The second benefit brought by the Bruce Plan quickly became apparent, as the ambassador capitalized upon the deteriorating Argentine economy and his privileged position to undermine Miranda's. Again, delicacy and duplicity were needed. Despite Bruce and Ray's distaste for Miranda, the 'great obstructive force which our Embassy has to face',6 they

1 S. Griffis, Lying in State (Garden City, 1952), p. 260 and Luna, Peron y su tiempo, p. 208; memo of con., Miller, Griffis, Mallory, Per6n, Cereijo, Ares et al., end. 2, 20 Feb. 1950, RASS, lot file 53 D 26; La Prensa, 8 Oct. 1948, p. 4. 2 Bruce to sec. state, 17 Nov. 1948, SDDF 711.35. 3 Paz and Ferrari, PoUtica Exterior Argentina, p. 154; see also, Descartes, 'Economic Cooperation', in Pool to state dept., 20 April 1951, SDDF 635.00; Primera Plana, 30 Aug. 1966, pp. 38-9. 4 Luti to Cooke, 30 Jan. 1946, AMREC, EEUU, 1946, politica exterior, caja 8, expediente 2; Escude\ 'La Traici6n', p. 81 and Gran Bretana, p. 215. 5 Review of the River Plate, 15 Oct. 1948, p. 7. 6 Dearborn to Atwood and Martin, 'Ambassador Bruce Holds Discussion'; see also, Bruce to sec. state, 24 Dec. 1947, SDDF 635.4131.




made a concerted effort to disguise their sentiments. Bruce's description of Miranda is telling:

Miranda is a nimble-witted, shrewd man, devoid of principle, and of no character. His word is not to be relied upon. As the head of the finances, he is completely incompetent. One would have to search history to find a man who has been of such disservice to his country as this man has been to this nation. We are on the same friendly terms with Miranda as he is with us.1

The embassy staff recognized that denouncing Miranda would only strengthen his standing among Argentine nationalists, Peronist or otherwise, and easily be construed as intervention. Instead, Bruce and Ray worked with British diplomats to exacerbate the rifts within Peron's coalition by encouraging 'moderate' Peronists such as the foreign minister, Juan Atilio Bramulgia, and the minister of war, General Humberto Sosa Molina, to provoke a conflict within Peron's inner circle that would lead to Miranda's dismissal.2

Bruce's primary goal was to win the backing of the Argentine army, one of the 'twin pillars' of Peronism and a natural ally against Miranda. US officials knew that 'the minister of war and the military elements in general thoroughly detest Miranda' for reasons of their own: although the army at one time supported Miranda's efforts to gain access to Bolivian tin, Peru- vian iron, and Chilean copper, he had alienated professional soldiers by trying to curtail both military expenditures and expensive arms purchases overseas.3 Furthermore, Miranda's closest ally was Eva Peron, the president's wife and a long-time enemy of the Argentine officer class.4

The army's latent resentment erupted in November 1947, when the high command learned that 'shady deals' by Miranda and his underlings at IAPI had led to the disappearance of more than two million dollars.5 Incensed, the high command asked Peron to deprive Miranda of responsibility for

military purchases. Peron complied, supposedly 'to prevent the matter from becoming a national scandal' but, according to the US embassy, in fact because Peron 'was told by the Army that if he did not do so the Army would put in a new President'.6 Knowing that the 'Army is determined to effect [Miranda's] downfall', and in an attempt to take advantage of this

1 Bruce to sec. state, 26 Sept. 1947, SDDF 611.3531. 2 MacDonald, 'The US, Britain, and Argentina', pp. 183-99 and 'The US, the Cold War, and Per6n\ 3 Ray to sec. state, 22 July 1948, SDDF 724.35; Hoover to Neal, 19 Dec. 1946, SDDF 824.00; Messer- smith to sec. state, 12 March 1947 [University of Delaware Library, George S.] Messersmith Papers, 1857; A. Rouquie, Poder Military sociedad en la Argentina (Buenos Aires, 1986), ii. 78-81. 4 R. Potash, The Army and Politics in Argentina, 1945-62 (Stanford, 1980), pp. 51-4. 5 Dearborn to Atwood et al., 15 Dec. 1947, ARA, MRIC, Argentina. 6 Ray to Lyon, 17 Nov. 1947, SDDF 835.50.



344 Glenn J. Dorn

'atmosphere suggesting a coup d'etaC,1 Bruce tried to use arms sales to cement closer ties with the officer corps.

According to Ray, 'the armed forces are anxious to have our co-

operation,' and 'want American arms and assistance in establishing factor- ies for small arms and ammunition'. As the Argentine army, desperate for new equipment, would otherwise buy it from Britain or the Soviet bloc, Bruce argued that the United States should lift its five-year-old arms

embargo and itself supply whatever was needed: 'We have little or nothing to lose by offering Peron some co-operation. On the contrary,' Ray claimed, weapons offered 'the best hope of getting the armed forces and

military leaders on our side'.2 By speaking out in public for arms sales to

Argentina, Bruce heightened the perception that he was working on Peron's behalf, even as he condoned Argentina's exclusion from the Marshall Plan. Furthermore, he assured the state department that arms sales would do nothing to arrest Argentina's 'dollar drain' but would buy Argentina's adherence to the treaty of military co-operation signed at Rio de Janeiro in September 1947, which the Truman administration deemed a

key instrument of indirect control. The state department's willingness to work with the army, and Sosa

Molina's high standing in the cabinet, quickly paid dividends when Peron- ist 'extremists' called in December 1947 for the nationalization of the

foreign-owned oil companies.3 Although Peron, Bramulgia, and even Miranda pledged that no action would be taken, an impasse had been reached: whereas Peron did not dare to alienate his nationalist followers by making a deal with Standard Oil, a notorious symbol of foreign exploitation, the nationalists would not go ahead with expropriation without his

backing.4 Sosa Molina, at the start a lukewarm supporter of expropriation, broke

the stalemate by radically altering his position after a series of conversations with Ray and Lieutenant-General Willis Crittenberger, who had come to Buenos Aires to arrange the arms sales. While it is still not known what was said at the meetings - most likely Crittenberger and Ray warned Sosa Molina, as Bruce had already warned Bramulgia, that the United States would not help a government that injured US investment - Sosa Molina came out of them as a champion of co-operation with the United

1 Dearborn to Atwood et al., 15 Dec. 1947, ARA, memos on Argentina, vols.5, 6; O[ffice of] R[esearch and] Intelligence], 'Probable Argentine Policy toward the US to 1952 and Its Effects on US Interests', 15 Feb. 1949 [Truman Library, Intelligence File], CIA Reports 1948. 2 Ray to sec. state, 5 Jan. 1948, SDDF 711.35. 3 Potash, Army and Politics in Argentina, pp. 68-72; Dearborn to Tewksbury, 23 Dec. 1947, ARA, MRIC, Argentina. 4 Bruce to sec. state, 15 Dec, Daniels to Bruce, 17 Dec. 1947, SDDF 835.6363.




States. Richard Potash suggests that Sosa Molina's 'subsequent warning to the cabinet that [expropriation] could damage the interests of Argentina was an understandable position for one whose consuming interest ever since he took office had been to replace the Army's outmoded equipment.' The warning seems to have tipped the balance, as Peron announced soon afterwards that he would take no action against Standard Oil.1

Sosa Molina's intercession led US officials to conclude that he 'appears to hold the balance of power and will probably exert an influence favorable to US- Argentine co-operation'.2 'At some point Peron will have to clean out Miranda and the other crooks associated with him,' Bruce explained to Marshall in July 1948, 'or else the Army will probably clean out Peron'; adding that 'we do not know which way the cat is going to jump, but when it does the chances are that we will land with it on a better spot than the one we left.'3 While the state department could not compete with Peron for the support of the working classes, it did possess an effective lever for use in gaining the co-operation of the army high command.

With the army in collision with Miranda and urging the appeasement of the United States, the state department turned its attention to the civilian wing of Peronism. It already had one firm ally in Bramulgia; seen by Americans as the most 'reasonable and respectable and least nationalist civilian' in Peron's government,4 he had long been a voice for moderation.

Unfortunately, he also seemed to be a voice crying in the wilderness, for Miranda had usurped most of his functions. As the acting secretary of state, Robert Lovett, lamented on more than one occasion, 'Bramulgia with complete sincerity has indicated that drastic action would not be taken,' but had 'been unable to prevent final action sponsored by Miranda'.5 So

although Bruce had good reason to believe that Bramulgia shared the US view of Miranda, he was a partner of limited utility.6

To remove Miranda and dismantle IAPI, the state department needed to lever other members of Peron's cabinet around to Bramulgia's position. Bruce, again capitalizing upon the perception that he was Peron's ally, set out to do so by tirelessly extolling the virtues of free trade and illustrating how the elimination of the IAPI and other statist organizations could still

salvage the Argentine economy. For example, in March 1949 he told the

Argentine ambassador at Washington, Jeronimo Remorino, and the

1 Potash, Army and Politics, p. 75; see also C. Lucchini, Apoyo empresarial en los origenes del peronismo (Buenos Aires, 1990), pp. 49-52. 2 ORI, 'Probable Argentine Policy', CIA Reports 1948. 3 Bruce to sec. state, 2 July 1948, SDDF 835.50. 4 ORI, 'Probable Argentine Policy', CIA Reports 1948. 5 Lovett to embassy Buenos Aires, 5 Dec. 1947, SDDF 835.6363. 6 Bruce to sec. state, 26 Sept. 1947, SDDF 611.3531.



346 Glenn J. Dorn

economic counsellor for the embassy, Dr Juan Scarpati, that as soon as Peronists cancelled 'all decrees, laws, and regulations setting up restrictions on trade', Argentines would be able to sell $500 million worth of

goods in the United States. His promise that 'with the removal of restrictions on trade, Argentina would be back on its feet in ninety days,' was

supposed to convince Peronists that 'every state-dominated economy is a

will-o'-the-wisp' and a 'no substitute for private enterprise'.1 These manoeuvres had to be carefully managed. Bruce suggested at one

point that he should have a 'firm talk' with Peron to tell him of the 'certain conditions' he must fulfil before the United States did anything that might 'provide money to the Argentine'. Although a matter of 'extreme delicacy' and not to be 'discussed with anyone else', Peron would appreciate the candour and do as he was told.2 Unfortunately, Peron could have turned such a conversation, a clear intervention in Argentine internal affairs, into a

weapon for use against the United States. Bruce, who was not given per- mission to talk to Peron as he suggested, had to confine his efforts to con-

vincing Argentines of the benefits of liberal capitalism, comforted in the

knowledge that 'the Argentine deserves about what they [sic] have gotten.'3 Prohibited from using a direct approach, Bruce shifted his attention to

the economy minister, Orlando Maroglio. Once thought to be a loyal 'tool of Miranda', by 1948 Maroglio was 'asserting himself' and questioning the statist approach to economic development.4 Bruce actively helped Maroglio to change his mind by escorting him to Washington in Septem- ber and introducing him to Hoffman, William Martin of the Export-Import Bank, Thomas Blaisdell of the commerce department, Thomas McCabe of the Federal Reserve, and the secretary of the treasury, John Snyder. Maroglio had to listen to numerous sermons on the virtues of free trade and a limited government role in the economy, as all of these key US officials always linked Argentina's dollar-earning capacity with the removal of the onerous 'restrictions imposed by IAPP. When, midway through the interviews, Maroglio wearily pleaded, 'don't let's ever mention IAPI again,' US officials replied that it was 'pretty difficult to get on to any discussion of Argentine trade without touching on IAPI'.5 Miranda, who believed that Maroglio was 'making a fool out of himself ' in Washington,6 learned when Maroglio came home that his ardour for state trading had cooled.

1 Memo of con., Remorino et al., 8 March and 25 Feb., and memo of con., Solar del Campo, Bruce, Tewksbury, 11 March 1949, SDDF 835.50: Bruce, Those Perblexinr Argentines, pp. 261-2. 2 Bruce to sec. state, 24 Dec. 1947, SDDF 635.4131. 3 Bruce to sec. state, 2 July 1948, SDDF 835.50. 4 Memo of con., Tony et al., 24 Nov. 1947, SDDF 835.77. 5 Tewksbury to Greenup, 29 Sept. 1948, SDDF 835.50; see also Tewksbury, 'Visits of Orlando Maroglio', 30 Sept. 1948, SDDF 611.3531; La Prensa, 19 Nov. 1948, p. 3. 6J. Fforde, The Bank of England and Public Policy, 1941-58 (Cambridge, 1992), p. 267.




Maroglio, moving quickly against his former mentor, presented the cabinet at the end of 1948 with a report suggesting something akin to the 'elimination [of] I API'.1 Miranda, who said the report should 'be con- signed to the waste basket', referred to Maroglio as a 'dead duck'. In Jan- uary 1949, events reached a climax when, according to one of the embassy's informants, a cabinet meeting nearly degenerated into a brawl as 'Miranda called Mr Maroglio a liar and Maroglio called Miranda a clown.'2 For Miranda, however, the timing could not have been worse. He had recently suffered a serious defeat in negotiations with the British - he had been pressured by the British, with ECA and Bramulgia's help, to sign a

disadvantageous long-term commercial agreement on the barter of food for industrial goods - while Bramulgia had come home from mediating the Berlin Crisis to international acclaim.3

With Maroglio, Bramulgia, and the army poised against him and the

economy in disarray, Miranda's days were already numbered when Eva Peron, once his leading benefactor, struck the most serious blow. In the wake of Maroglio's attacks, she suddenly accused Miranda of using her name to solicit bribes from Argentine businessmen. According to US sources, she gave her husband an ultimatum: 'if [Miranda] did not go, she was going to leave the country herself and go and live in Biarritz.'4 It is

quite possible that Eva Peron, an astute politician in her own right, recognized how rapidly Miranda's position was deteriorating and sought to distance herself from her one-time ally.5 Regardless of the reason, however, when she turned against Miranda, so too did her followers, including cabinet members such as Jose Barro. At a meeting with Peron in mid-

January, Barro, Ramon Cereijo, and several other members of the cabinet

pointed to the 'dangerous disorganization' caused by Miranda's 'manage- ment of the economy'.6 Although Peron tried to smooth over the rift, in Bruce's words, 'Miranda's goose was cooked.'7 By the end of January, he was summarily dismissed from office.

Although Miranda predictably tried to rally nationalist sentiment by claiming that he had been unable to 'withstand the pressure that had been

put on him by Sra. Peron and the US Ambassador', his efforts were in vain. Bruce told the state department that 'Miranda has for months been

trying to get us into a battle with him,' but that he had 'been continuously

1 Ray to sec. state, 21 Sept. 1948, SDDF 835.5034. 2 Greenup to sec. state, 22 Nov. 1948, SDDF 611.3531; same to same, 28 Dec. 1948, SDDF 835.50; same to same, 12 Jan. 1949, SDDF 835.6363. 3 Primera Piano, 21 June 1966, pp. 37-8; Luna, Peron y su tiempo, p. 233. 4 Bruce to sec. state, 21 Jan. 1949, SDDF 711.35/2949. 5 Lewis, Argentine Capitalism, pp. 195, 202-3. 6 Primera Piano, 19 July 1966, p. 41. 7 Bruce to sec. state, 21 Jan. 1949, SDDF 711.35/2949; Primera Plana, 30 Aug. 1966, p. 42.



348 Glenn J. Dorn

sidestepping' and could deny truthfully any direct involvement in Mi- randa's fall. He admitted, however, that it was what 'we have been hoping for over a period of many months' and argued that 'it looks now as if there is at least a chance of getting this economy on a reasonably sound basis.'1

Peron's choice of two 'Bramulgia men' to replace Miranda and Maroglio (who resigned on account of illness) was interpreted to mean that 'Peron is

accepting the conciliatory views of Bramulgia as opposed to Miranda on international relations.' The state department was pleased; it viewed the new appointments as a significant 'step in the right direction', and one that

portended more important changes.2 The Truman administration was satisfied at first with the new ministers'

performance. Remorino told the assistant secretary of state for Latin American affairs, Paul Daniels, in May 1949 that 'IAPI in the future would not market products which Argentina exported to the United States' and added that its role would be reduced even further as quickly as possible. When Daniels, in the course of the conversation, described IAPI's oper- ations as 'inefficient', Remorino thanked him for his 'diplomacy' in his choice of adjective, as he himself roundly criticized Miranda and his statist

principles.3 Scarpati humbly promised the state department on 9 February that after the 'new economic team' had 'completely reorient [ed] economic and financial policies ... Argentina should not attempt to become an industrial nation. Its wealth is in exporting . . . agricultural products.'4 As Peron's state apparatus had been designed explicitly to promote industries that Argentina's traditional agropastoral elite had ignored, Scarpati's statement, if accurate and acted upon, represented a diplomatic triumph worthy of any colonialist power.

Fully understanding Bruce's unstated bargain, Remorino told the state department on 21 February that he 'had fought hard to have Miranda ousted and now that Miranda was out, his government was asking: what now?'5 In a stunning turnabout in May 1949, Peron himself told a visiting executive from International Telephone and Telegraph (ITT) that the US government could 'write its own ticket in return for whatever aid it might be able to afford to Argentina'.6 Two years of sustained pressure and disguised leverage had paid off. With the Five-Year Plan in ruins, IAPI being dismantled, and Miranda's commercial treaties shelved, the Truman

1 Bruce to sec. state, 21 Jan., SDDF 711.35 and same to same, 24 Jan. 1949, SDDF 835.002. 2 Memo of con., Scarpati and Tewksbury, 9 Feb. 1949, SDDF 835.50; see also, La Prensa, 29 Jan. !949> P- 6; Current Economic Developments, 31 Jan. 1949, p. 187, Truman Library and Primera Plana, 19 July 1966, p. 42. 3 Memo of con., Remorino et al., 10 May 1949, SDDF 711.35. 4 Memo of con., Scarpati, Tewksbury, and Dearborn, 9 Feb. 1949, SDDF 835.50. 5 Memo of con., Remorino et al., 25 Feb. 1949, ibid. 6 Memo of con., Behn et al., 20 May 1949, ibid.




administration wondered whether it were not now in a position to dictate terms.

Ray, dissatisfied like a number of state department officials, thought that Peronists should simply be told that 'Santa Claus doesn't live here any more':1 Argentina had yet to ratify the Rio de Janeiro treaty, Peron was implementing a new constitution which penalized foreign investors, and his government had been promising to dismantle IAPI for over two years. Nonetheless, by the end of 1949, the new assistant secretary of state, Edward Miller, was ready to offer economic aid. Unbeknownst to Miller, the Peronists had already applied to the Eximbank, to be turned down in accordance with the state department's standing instructions. However, to take cthe best advantage' of Peron's 'constructive attitude' and 'give the United States an opportunity to influence the Argentine government toward sounder business practices', Miller told the bank's chairman, Herbert Gaston, in December 1949, that the state department no longer had any 'political objection to financial assistance to Argentina'.2

'Obviously provoked', Gaston 'launched into a spirited criticism' of the state department's dealings with other departments. A year earlier, a state department official, while telling him that there were 'no political objec- tions' to loans to Argentina, had 'winked his right eye'. Was 'it the same "with a wink of your left eye this time?"', Gaston asked. Replying that the Argentine government had changed its stance towards liberal capitalism, Miller persuaded Gaston to study the Argentine request.3 Once Miller overcame the bank's 'latent hostility', Argentina was granted a $125 million credit available to Argentine banks who wished to settle some of their debts with US creditors.4

Although Miller described the credit as a 'new departure in our policy with respect to Argentina which it would be a great mistake to under- estimate', it was hardly an altruistic gesture.5 Remorino and Cereijo would be able to return in triumph to Peron with proof of US good will, itself worth celebrating, as Peronists preaching appeasement of the United States had not won real victories for four years. The influence in the cabinet of Miranda's successors depended as heavily as his had upon their effectiveness: clients need to show that their patrons will reward them. Nor

1 Ray to sec. state, 4 Jan. 1949, SDDF 611.3531. 2 Miller to Griffis, 8 Dec. 1949, RASS, lot file 53 G 26; Miller to Thorp, 25 Nov. 1949, RASS, lot file 53 D 26; memo of con., Gaston et al., 2 Dec. 1949, Miller to Griffis, 10 Jan. 1950, RASS, lot file 53 G 26. 3 Memo of con., Gaston et al., 2 Dec. 1949, RASS, lot file 53 G 26. 4 Miller to Griffis, 8 Dec. 1949, ibid.; see also Gaston to Miller, 24 May 1950 [Truman Library], Edward G. Miller Papers, asst. sec. state, correspondence file, box 1, folder 6. For background to the credit, see M. Rapoport and C. Spiguel, Estados Unidosy el peronismo: La politica norteamericana en la Argentina, 1949-55 (Buenos Aires, 1994), pp. 65-82. 5 Miller to Griffis, 8 Dec. 1949, RASS, lot file 53 G 26.



350 Glenn J. Dorn

had the political infighting that cost Miranda his post abated. Bramulgia had been forced from office in mid-19491 and 'Evita's hatchet' remained Very sharp these days'.2 As the political infighting, in giving Bruce the opportunity to disguise what he was up to, was partly responsible for Argentina's new economic policy, the Truman administration wished to ensure that the 'new economic team' should not be dismantled in the same fashion as its predecessor.3

The structure of the aid package made it clear that the credit was merely a thinly disguised loan. Remorino and Cereijo had asked for anything but an outright loan, partly because Peron had pledged to cut off his hands before allowing them to accept one.4 By accepting a loan from the United States, albeit one with a 'political appellation suitable to his internal situation',5 Peron was tacitly admitting that his statist economic programme had failed, making it impossible for him to pose credibly as the standard-bearer for anti-US nationalists across the hemisphere, and depriving him of his claim to 'anti-imperialist leadership'.6 After four years of Peronism, Argen- tina, again indebted to foreigners and retreating towards economic ortho- doxy, abandoned 'the belligerent position that we had to take with the United States'.7

'Our present policy', Miller commented with some understatement, 'has not been arrived at haphazardly.'8 Since the credit alone would not rescue Argentina from its financial crisis, forcing Peron to hold to his new line, the Truman administration expected 'reasonably good public relations' so long as it continued to show 'no indication of interfering in matters re- garded as internal problems by Argentina'.9 Even if Peron did not reverse his policies completely and, in the 1950s, periodically intensified his anti- capitalist propaganda, strengthened Argentina's economic ties with the Soviet bloc, persisted in his efforts to find allies within the hemisphere,

1 Bramulgia was removed from office, according to his successor, Hipolito Jesus Paz, and historian R. Giacalone, because of a feud with Remorino. In the version Remorino told Miller, Bramulgia sought to 'build himself up as the only friend of the United States', and suppressed some of Remorino's reports to this end. When Per6n discovered it, Remorino asserted, Bramulgia was removed: Miller to Mallory, 12 Aug. 1949, RASS, lot file 53 D 26; Giacalone, 'From Bad Neighbors', pp. 207-11; H. J. Paz, 'La Tercera Posici6n, 1949-51', in La politica exterior argentina, p. 61. 2 Mallory to Miller, 3 June 1950, RASS, lot file 53 D 26. 3 Acheson to Griffis, 5 April, Miller to Mallory, 17 May, 2 June, Mallory to Miller, 23 May, Griffis to Miller, 16 June 1950, ibid. 4 Miller to Griffis, 8 Dec. 1949, RASS, lot file 53 G 26; Ray to sec. state, 4 Ian. 1040, SDDF 611.353 1. 5 Mallory to state dept., 1 March 1950, RASS, lot file 53 D 26. 6 Primera Piano. 21 June 1066, p. 38. 7 Paz, 'La Tercera Posici6n\ p. 62. 8 Miller to Potofsky, 4 May 1950, RASS, lot file 53 D 26. 9 State dept. memo on Argentina, 14 July 1950 and Miller to Thorp, 25 Nov. 1949, encl. 1, ibid. Fur- thermore, Griffis was pleased to remind his critics that the structure of the credit ensured that 'not a dollar of new American money went into Argentina': Griffis, Lying in State, p. 258.




and never completely dismantled I API, as Mario Rapoport and Claudio Spiguel demonstrate, 1949-50 nonetheless marks a watershed in both US- Argentine relations and the Peronist movement.1 An Argentina unable to boast of 'economic independence' or of having found a viable alternative to the US liberal capitalist model could never mount a serious challenge to the United States's imperialist agenda in Latin America. While giving financial aid to Peron may have infuriated long-time US allies such as Brazil, it offered the most effective means to tie him down.2

The Truman administration succeeded in quietly undermining Peron's economic alternative to US liberal capitalism without appearing to violate its Good Neighbor pledges of non-intervention. The state department had co-ordinated its efforts with the US army, the EC A, the Export-Import Bank, and even the British government, and had acted as forcefully as it dared to destabilize an avowedly anti-Communist regime. While Peron's economic experiment might well have failed without US intervention, the

early strength of Peronism exemplified the challenge that volatile, home-

grown nationalism posed to the US vision of the Western Hemisphere nestling under the umbrella of US ideals and leadership. The Truman administration, fearful that Peron's alternative programme would handicap their efforts to forge a more open international economy based on convertible currencies and multilateral trade, ensured that it did not. As the time when the United States could clandestinely battle Latin American nationalism was rapidly drawing to a close, the Bruce Plan offers a nice demonstration of the standard imperialist conjuring trick of wielding a stick without letting it show.

Embry-Riddle Aeronautical University

1 Rapoport and Spiguel, Estados Unidosy elperonismo, esp. pp. 42, 120-4. 2 Cobbs, The Rich Neighbor Policy , p. 69.



Bruce Plan Intervención Norteamericano Peronismo

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