Foreign Relations of the United States, 1949, The United Nations; The Western Hemisphere, Volume II

825.6352/4–2849: Telegram

The Secretary of State to the Embassy in Chile

confidential

Washington, May 5, 1949—7 p. m.

136. Amb Nieto on Apr 27 approached Asst Secy Thorp same lines Embtel 212 Apr 28. Memo of conversation forwarded.¹ Dept sympathetic but neither USGovt nor Anaconda Kennecott in position prevent copper price declining from recent high as have most other non-ferrous. Dept concerned Chilean false view that either company capable maintaining price any particular level or alone responsible for price movements. Stockpiling and ECA exerting some stabilizing influence. For your info New York official of one foregoing companies states his company advised ChilGovt not rely on 23½ cents.²

Suggest you stress hope as Thorp did that Govt will find other means adjustment situation including, if necessary, budget curtailment or finding other sources revenue, rather than increasing heavy tax burden copper companies. Latter would undermine recently created foreign investors confidence in Chile demonstrated partially by current large Anaconda expansion. Foregoing important Chilean long-run best interests, especially view Chilean Pres’s desire cooperate Point Four.

Acheson

1. Summaries of telegram 212 and the memorandum of conversation are contained, supra.
2. Ambassador Nieto had told Mr. Thorp that the Chilean foreign exchange budget for 1949 had been calculated on the assumption that the price for copper would be $.235 per pound (825.6352/4–2749).