File No. No. 763.72112C26/21

Memorandum of the Chief of the Division of Latin American Affairs ( Stabler)

The Minister from Peru called by appointment to see Mr. Stabler this afternoon and informed him that Mr. Lay1 had spoken with him in the morning in regard to the regulations under consideration [Page 402] by the War Trade Board for the granting of licenses to banks to trade with the “Casa Grande” Sugar Co. in Peru, and that Mr. Lay had told him that, while the matter was almost settled, there were some points which were under discussion and that he felt that, should the Government of Peru give a favorable reply in regard to the turning over to the United States of the ex-German ships in Peruvian waters,1 the matter of the “Casa Grande” would be facilitated thereby.

The Peruvian Minister informed Mr. Stabler that he thought possibly the Peruvian Government was holding up definite action in the matter of the ships until a favorable reply had been received from the United States in regard to the “Casa Grande” and that he was in a quandary as to what course to pursue as he felt that public opinion in Peru was difficult to deal with, and earnestly hoped that both questions would be settled in a manner satisfactory to the two countries.

Mr. Stabler informed Mr. Freyre that he was not fully cognizant of all of the details of the War Trade Board’s attitude in regard to the “Casa Grande,” but tried to present to that Board the political side of the case in an endeavor to have the wishes of Peru met as much as possible. He further stated that the Department would be placed in a much more advantageous position to deal with the War Trade Board should a favorable reply be received from the Government of Peru in the near future regarding the ships.

The Peruvian Minister then informed Mr. Stabler that he would cable his Government to the effect that should the proposal of the United States Shipping Board, for the use of the ships, be accepted in principle, the War Trade Board would give a favorable answer to the “Casa Grande” question.

Mr. Stabler informed the Minister that he thought probably this would be of advantage and that, should a favorable reply be received in the near future, the State Department’s hand would be strengthened, and he would do all in his power to see that the Government of Peru received treatment which he wished.

  1. Julius G. Lay, Acting Foreign Trade Adviser for the Department of State.
  2. For correspondence regarding these ships see Supplement 1, vol. I, “Latin America in Relation to the War,” pp. 661740.