825.24/896
The Ambassador in Chile (Bowers) to the Secretary of State
[Received March 22.]
Sir: I have the honor to refer to my despatch No. 5591 of January 30, 1943, my confidential telegram No. 436 of March 6, 1943, and the Embassy’s report No. 81 of March 6, 1943.86
There are attached hereto the Diario Oficial of March 6, 1943, containing the text of decree 64 bis, February 3, 1943, regulating the internal consumption of copper and its export in elaborated form, and a copy of confidential note No. 13, March 6, 1943,87 addressed by the Under-Secretary of Economy and Commerce to the Counselor for Economic Affairs of the Embassy,88 stipulating the limitation of copper consumption in Chile during 1943 to 18,000 metric tons. These documents, together with the three enclosures to report No. 81 (supra) contain all the regulations thus far issued in regard to the control of copper in Chile. It is expected that detailed regulations will be issued by the Ministry of Economy and Commerce to implement the stipulations of confidential note No. 13 mentioned above.
[Page 833]As the matter stands now it is believed the major objectives desired by the United States have been attained, namely, the limitation of the internal consumption of Chile to 18,000 metric tons in 1943, the restriction of Chilean exportation to manufactured copper within the 18,000 ton limit, adequate consignee information, and requirements that exports be for the essential needs of the American republics with preference being given to uses contributing directly to the war effort. The decree constitutes the basic authority for such controlling regulations as the Chilean authorities may wish to institute. The decree also limits the acquisition of copper to firms which are capable of processing it. Other stipulations included in the decree are doubtless designed to prevent speculation in copper as well as to encourage domestic industry but neither of these ends can be thoroughly fostered so long as the copper can be purchased at the official rate of 19.37 pesos to the U. S. dollar and sold in processed form at the open market rate of about 33 pesos to the U. S. dollar. Profits on a metric ton of copper may reach nearly a half million pesos. The decree permits the President to change the price basis or to acquire copper through a governmental or semi-fiscal agency for resale to the manufacturers, thus opening the way for obtaining the “exchange profits” on copper for the benefit of the government. It may also lead to stockpiling by the Chilean government or to increased governmental participation in the copper industry, although it is the opinion of the writer that neither of these possibilities is of immediate concern as high Chilean officials now seem to be in a frame of mind to cooperate with the American war effort.
The conversations of Embassy officials with the Chilean authorities preceding the issuance of the decree and note No. 13 of the Ministry of Economy and Commerce were long and arduous. There were numerous delays caused by change of ministers, illnesses of the ministry’s staff and doubtless many counter currents within the government itself, which is not without its Nazi sympathizers. Senator Hernán Videla Lira, who is President of the National Mining Society (Sociedad Nacional de Mineria) and pro-United Nations, in the last conferences requested that all sales of bar copper to South America be made through a Chilean organization rather than through the American copper companies’ agencies abroad. He was persuaded to withhold his request so as not to delay the conclusion of the negotiations but that phase may come up again at any time. The American copper companies are opposed to it.
Respectfully yours,
Counsellor of Embassy