The Secretary of State to the Ambassador in Chile ( Collier )
41. Department’s telegram No. 37, August 31, 6 p.m.
(1) The Department has noted the considerations set forth in your telegram No. 120, September 2, 5 p.m., but, nevertheless, it desires that every effort be made to dissuade the Government of Chile from applying discriminatory import duties in favor of Chilean ships.
(2) Your telegrams No. 118, September 1, 3 p.m., and No. 120, September 2, 5 p.m. Bounties contemplated under section 17 of the nitrate law if paid to shippers would apparently be similar in effect to preferential import duties. You should, therefore, try to dissuade the Government of Chile from applying the former measure on the same general grounds as the latter, namely, that neither Chilean ships nor their cargoes are subjected to discriminatory treatment in ports of the United States as compared with American ships.
Grace and Company has informed the Department that the National Nitrate Council has passed a measure, to become effective upon the approval of the President, providing for a payment of 7 pesos per metric ton in favor of Chilean ships for nitrate carried to Canada, Cuba, and the United States. Grace and Company consider that this measure, in conjunction with preferential import duties, will seriously affect their interests.
Inform the Department whether the payments referred to by the Grace Line would be made to shippers or to shipowners. The Department is giving consideration to the question whether representations should be made regarding payments to Chilean shipowners based on quantity of cargo carried and distance transported, but you should take no action with regard to such measures without specific instructions.
(3) Your telegram No. 119, September l.16 It is not entirely clear to the Department whether the mileage subsidy of 2 pesos per ton of coal transported in Chilean ships for each one thousand kilometers would be payable to shippers or to shipowners. If payable to shippers, its effect would be similar to the discriminatory measures mentioned above and appropriate representations in the same sense should be made.
Telegraph as soon as possible as to the probable effect of your representations, also, whether the representatives of other countries have made representations, and if so, to what effect.