File No. 825.6374/51

The Consul General at London ( Skinner) to the Secretary of State


Department’s 5730, Embassy. British members proposed Nitrate Executive request me to cable following as their view of restriction of organization in order to facilitate formulation of instructions to me by American Government.

Maximum production to be encouraged from all sources in Chile at fair prices varying with local cost of production.
Negotiations in Chile to be conducted by Anthony Gibbs, Valparaiso, nitrate importer and producer, actually sole agent of British Government for all nitrates, proposed appointment subject to discussion. Recommended by British as convenient and efficient.
Purchases to be effected at fixed rate of exchange, governments affected to take the risk of variations. This plan adopted with satisfactory results in Swedish business.
The oils and possibly some coal to be provided from America, new contracts for oils to be at fixed price. Sir Thomas Royden1 reports imports in Chile for nitrate production in 1916 were 560,000 tons.
British Government to provide bags from India.
Requirements to be divided into purposes, American Government should instruct me as to American needs.
British members recommend that pending definite organization of Executive no dealings take place. They are informed that Dupont has been authorized to make some purchases. It seems advisable that this authorization be withdrawn.
Chilean Minister in London entirely satisfied and has now cabled his Government accordingly.
Proposals regarding financing of purchases as stated section 13 of draft agreement,1 each Government making its own arrangements. As respecting this Crosby of American mission now drafting arrangement which he considers most advantageous.
  1. British shipping delegate in the United States.
  2. Ante, p. 668.