Foreign Relations of the United States, 1946, The American Republics, Volume XI

825.51/10–3046

Memorandum of Conversation, by Mr. B. C. Brundage of the Division of North and West Coast Affairs

confidential

[Washington,] October 30, 1946.

Participants:	Señor Mario Rodríguez, Minister Counselor and Chargé d’Affaires, Chilean Embassy.
	Señor Mario Illanes, Commercial Counselor, Chilean Embassy.
	Mr. Livesey—OFD
	Mr. Brundage—NWC

Mr. Livesey handed to Señor Rodríguez a paper (copy of which is attached), which he wished to have understood as a record of what he had to say orally and not as a memorandum. Mr. Livesey mentioned that the National Advisory Council had requested the Department to pass on to the Chilean Government their interests in any specific assurances which the Chilean Government might give for restitution of funds diverted from amortization under Law 5580. Mr. Livesey added that he understood that the Chilean Government early this year had taken some action on reinstituting the suspended debt payment from current receipts and, in addition, had paid in $1,000,000 as earnest of its goodwill on the $24,000,000 of past diversions. It was this $24,000,000 which had been diverted in the past and not made up which was the nub of the problem in the mind of the National Advisory Council. In summing up, Mr. Livesey stated that the same question, namely Chile’s intentions regarding that $24,000,000, would undoubtedly come up before the International Bank with reference to the Chilean request for a loan. Mr. Livesey added that, before the International Bank, the British bondholders might be expected to enter some more specific proposals as they have all the time been talking in terms of Law 7160.⁸

Señor Rodríguez stated that he would be glad to pass on Mr. Livesey’s remarks to his Government, and that he was sure that the reply would be forthcoming soon.

[Annex]

In considering the recent applications of the Chilean Fomento Corporation and the Chilean State Railways for loans from the Export-Import Bank, the National Advisory Council on International Monetary and Financial Problems was disturbed by the lack of specific assurance as to the program after 1946 for restitution of funds diverted from amortization under Law 5580 and requested the Department of State to endeavor to obtain such assurance.

The Department of State will wish to report on this matter to the National Advisory Council in due course.

The National Advisory Council on International Monetary and Financial Problems was established by the Congress in the Bretton Woods Agreements Act (Public Law 171, 79th Cong.), which was approved by the President on July 31, 1945. The statute directs the Council to coordinate the policies and operations of the representatives of the United States on the International Monetary Fund and the International Bank for Reconstruction and Development, the Export-Import Bank of Washington and all other agencies of the Government “to the extent that they make or participate in the making of foreign loans or engage in foreign financial exchange or monetary transactions.”

The members of the Council, according to law, are the Secretary of the Treasury, the Secretary of State, the Secretary of Commerce, the Chairman of the Board of Governors of the Federal Reserve System, the Chairman of the Board of Directors of the Export-Import Bank.

8. A marginal note reads: “Copper companies may have real need for relief this tax. MKW[ells].”