The Ambassador in Chile ( Collier ) to the Secretary of State
[Received 8 p.m.]
163. Government has published ship subsidy bill substituting [bill?] mentioned in my 141, October [September] 21, 6 p.m. and previous telegrams. Summary of new bill is as follows:
- Article 1. President of the Republic authorized to spend up to 2,000,000 pesos annually as subventions to national companies which have maintained for more than 3 years a regular service through the Panama Canal. This subvention to be regulated in proportion to the quantity of cargo carried by the respective companies.
- Article 2. Companies accepting these benefits are to share net proceeds with the State as follows:
- Reserves are first to be deducted and from balance a dividend of 10 percent is to be paid stockholders and the residue distributed proportionately between stockholders and the State, the latter being considered as holding shares of a value equal to 10 times subvention paid during the year. Government to name a director on the companies that accept the subsidy.
- Article 3. President of the Republic authorized to contract for account of companies, and with Government guarantee, loans that may be required for acquiring ships destined to foreign commerce or coastwise trade. These loans to be guaranteed by mortgages on the ships, companies to arrange to take care of the service of the loans.
- Article 4. Expenses occasioned by the law are to be met by increasing all consular duties 10 percent.
- Article 5. New law to go into effect January 1st, 1928.
Consular fees are frequently based on value of invoice. I assume proposed increase affects consular invoices of imports from all countries [Page 535] whether Chilean vessels maintain service with them or not. If so proposed increase seems to me unobjectionable in principle and possibly beneficial to American exports. Personally, cannot see ground for objection to new bill but would appreciate Department’s instructions.