File No. No. 763.72112C26/50A
The Secretary of State to the Peruvian Minister ( De Freyre)
Sir: I have the honor to acknowledge the receipt of your note of February 27, 1918, in regard to your Government’s desire that the Casa Grande Sugar Plant, a firm incorporated at Bremen, Germany, and operating in Peru, be permitted to discount the drafts it [Page 404] receives in payment for sugar shipped to Chile, and thereby to continue its business.
I take pleasure in transmitting to you the reply of my Government as to whether an enemy trade license would be issued by this Government to permit American banks or bankers or their branches in Latin America to finance the marketing of Peruvian sugar in Chile by discounting the drafts of the Casa Grande Sugar Plant.
You will appreciate that the enemy character of the Casa Grande Plant and of its owners, so far as this Government is concerned, is clearly established under the terms of our statutes and has been evidenced by many acts committed in the interests of the Governments with which the United States is at war. Under the circumstances, it is with reluctance that this Government would contemplate any relaxation of the existing rules against the maintenance of trade relations between American individuals or corporations and the Casa Grande Estate and its owners.
Nevertheless, in view of the urgent request of the Government of Peru and as an evidence of the sincere friendship existing between the Government of Peru and the Government of the United States—if the Peruvian Government, with the consent of the Casa Grande Sugar Plant, will appoint an administrator who will take over the actual management and control of the business and property; and if such an administrator will possess the authority to dismiss German employees at the property, and if this power will be exercised in the case of any employees or any of the present owners of the Casa Grande Plant who, under American laws, are enemies of the United States; and if the net earnings of the plant will be deposited in the Peruvian Treasury until after the determination of the war between Germany and the United States; and if none of the sums so deposited with the Peruvian Treasury will be used as a basis of credit upon which the owners of the Plant may realize but if all such sums shall remain free, clear, and intact in the Peruvian Treasury—the Government of the United States is disposed to grant a temporary license which would permit American banks or bankers or their branches in Peru to finance the marketing of the Casa Grande sugar in Chile.
It is understood, however, that such a temporary license would be granted pending a prompt decision by the owners of the Casa Grande Estate as to whether they would authorize the Peruvian administrator of the Estate to make a sale of any or all of the shares of the corporation—or of the Estate itself should such a course seem preferable—in such a manner as would safeguard the interests of the present owners of the Plant.
Accept [etc.]