File No. No. 763.72112C26/84
The Secretary of State to the Peruvian Minister ( De Freyre)
Sir: I have the honor to acknowledge the receipt of your note of the 5th instant with reference to the provisional license granted to the Mercantile Bank of the Americas and its correspondents in Peru, whereby the operation of the statute of the United States known as the Trading with the Enemy Act, is suspended in order to permit this bank to finance shipments to Chile of sugar produced at the Casa Grande, a German-owned estate.
I note your request that the sale and purchase of articles and products and the discount of drafts, effected by the general administrator of the Estate appointed by your Government, be not subject to the restrictions existing against the maintenance of trade relations between American individuals or corporations and enemy individuals or corporations.
[Page 409]I beg to assure you that this Government is desirous of acceding to the request of the Peruvian Government in so far as may be compatible with the interests of the United States, and of making effective the provisional license which it has granted in connection with the shipment of Casa Grande sugar to Chile.
This Government has also taken such steps as were within its power to facilitate the actual transportation to Chile of certain quantities of sugar produced at the Casa Grande Estate, in addition to issuing the license already granted to permit the financing of these shipments. The Mercantile Bank has been authorized by this Government, if it shall be so requested by the administrator of the Casa Grande Estate, to finance the shipments of sugar which have been carried or are to be carried by the steamships Rancagua, Iquitos and Elizabeth, and other carriers during the period of the temporary license. This Government has further authorized the American Minister at Lima to make public announcement to American citizens in the Republic of Peru that the transportation of sugar now under way or to take place during the period of the temporary license by the steamships Iquitos and Elizabeth or any other carrier is considered by this Government to come within the spirit of the temporary license already granted to the Mercantile Bank, and that this Government will not, on account of these transactions, regard these vessels or the owners or masters thereof as subject to any restriction, in obtaining American facilities, which might be imposed by this Government on account of their having engaged in the carriage of enemy property.
It is, therefore, not clear to my Government, that any additional steps other than those mentioned above are required to insure the actual exportation of the sugar from Peru to Chile and my Government deems it undesirable and unnecessary to grant permission to those who owe allegiance to the United States to resume other commercial relationships with the Casa Grande Estate so long as this Estate is owned by persons classed as enemies by the legislation of the United States.
I am, however, constrained to call your attention most urgently to the fact that, although this Government, at the request of the Government of Peru, has thus gone so far as to suspend the effect of the Enemy Trading Act in the case of exportation of sugar to Chile from the Casa Grande Estate, as evidenced by the foregoing and my notes of May 6 and June 3, and as to facilitate the actual transportation of the sugar from there to Chile as cited above, the owners of the Casa Grande Estate have not as yet so far as I am advised, conferred a power of sale upon the administrator, as specifically referred to in my notes above cited, although it would seem that ample time for this purpose had already elapsed.
[Page 410]I am, therefore, under the necessity of advising you that, unless within 15 days from today the owners of the Casa Grande Estate shall have conferred upon the administrator full and complete authority to make an absolute and bona fide sale of the Estate, which was one of the conditions under the terms of my note of June 3 upon which the continuance of the above-mentioned temporary license was made to depend, this Government will be obliged to revoke the license already granted and to cancel from that date any and all suspensions of the effects of its statutes as applied to all vessels, their masters or owners, as well as to any other person, who shall thereafter participate in the transportation of such sugar.
Accept [etc.]