File No. 723.2515/285.
The American Minister to Chile to the Secretary of State.
Santiago, December 3, 1912.
Sir: In continuation of my No. 278 of November 18 last, on the subject of the Chilean-Peruvian negotiations, I have the honor to [Page 1229] report that the bases of the settlement are still under discussion in: secret sessions of the Senate.
I am informed, privately, that the payment of 500,000 pounds sterling by Chile to Peru has been eliminated as one of the terms of settlement. I also understand that there is to be a secret agreement between the two countries to maintain the same export tax on nitrate. Many persons believe that the reported discovery of nitrate in southern Peru has contributed in no small degree towards bringing the two countries together.
The Department, I am informed, is already aware that, by the provisional contract of the Government of Peru and the DuPont Company, it is stipulated that the duties and taxes to be received, by Peru on any nitrate which may be found shall correspond exactly to those levied on this article in Chile.
I am informed by members of Congress, who profess to know, that the prospects of reaching a settlement are good but that no efforts will be made to hurry matters.
I have [etc.]