The Secretary of State to the Ambassador in Peru (Gonzales)

No. 9

Sir: The Department has received your despatch No. 502, of June 17, 1920, referring to the statement made by Mr. Smith in his despatch No. 485, of April 26, 1920,15 that he felt confident that President Leguia, if he was once more approached by the Embassy, would recommend to Congress that the Confiscation measure be annulled, when Congress reconvenes July 28. You state that it appears to you to be good policy to refrain from bringing pressure to bear upon the President in this case, inasmuch as American interests are not involved and you request more definite instructions than those now contained in the Embassy’s files as to the Department’s views on this matter.

The Department has not been advised as to the length of the period during which the measure containing the Confiscation Act as passed by Congress will continue to be valid pending promulgation by the President. The Department therefore desires that you inform it as to whether the President is empowered in his discretion to postpone the promulgation of this enactment of Congress for an indefinite period.

It appears, from previous reports made by the Embassy that the President expressed to the Chargé d’Affaires his determination not to promulgate the measure embodying the Confiscation Act, and the matter therefore appears to be closed so far as any further representations at the present time by this Government are concerned.

From the information at its disposal, nevertheless, the Department believes that the existence of this measure has a disquieting effect upon foreign investors in Peru. If the opportunity is therefore presented to you to refer to this matter in reply to any request from [Page 367] the President or the Minister for Foreign Affairs for information as to the present views of the Department regarding the desirability of annulling the measure containing the proposed Confiscation enactment, you are authorized to state that the Department believes the continued existence of this measure may have a disquieting effect upon foreign investors because of the fact that so far as they are aware it may be promulgated at any time, and that the Department considers that a recommendation by the President to Congress to repeal this enactment would be viewed very favorably by any American interests desirous of investing capital in Peru.

I am [etc.]

For the Secretary of State:
Van S. Merle-Smith
  1. Neither despatch printed.