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the Graiver bankruptcy case. Neustadt was troubled
that the government might now be making secret eco-
nomic arrests in addition to political ones.
 
Our other meetings have, of course, been recorded in
Memoranda of Conversation. While we were able to
review several of these in Buenos Aires, I look for-
ward to going over these memos in more contemplative
circumstances.
 
What came across most clearly to me is the continuing
hope that nearly everyone we spoke to places in Videla.
People - at least most of our contacts - do not blame
him for the seemingly uncontrollable activities of the
goon squads. The Navy seems to operate secretly in an
effort to polarize the Army. It would appear that
some of the military and leftist extremists are doing
all they can to provoke a civil war. Timmerman fears
that his newspaper will be closed in some kind of
Reichstag incident, signaling a hard-line triumph. He
declared that the Montoneros would eventually win a
civil war if one took place. He, therefore, welcomed
the Carter Adminstration's efforts, including the
military credits reduction, because it had finally
stiffened the moderates and given them the courage to
face up to the hard liners. The business community,
Timmerman suggested, is at long last afraid of what the
United States might do in the economic arena and is,
therefore, backing the moderate cause.
 
Our sessions with the Foreign Ministry were almost
beside the point. Arlia seemed in another world. I
really sympathize for those on your staff who deal
with this Alice in Wonderland character.
 
I guess we must continue judging events in Argentina
with extreme caution and hope that we will take every
opportunity we can find to nurse whatever forces of
moderation exist in that tragic society.
 
My very best.
 
Sincerely,
 
Fernando E. Rondon
 
Concurrence: D/HA - Ms. Derian (in draft)