Memorandum by the Secretary of State

The Chilean Ambassador called on me today in relation to the laws pending before the Chilean Congress. He said the Chilean Government was going to abandon the discriminatory tariff duties and any law to refund canal tolls and that if they did anything, they would make a straight subsidy to Chilean steamship lines. I told him of course we had no objection to that; that my objection to the other procedure was that we gave uniform rates through the Canal to all nations; that at one time we had a law giving American coastwise ships free tolls; that I had no idea that Congress would ever go back to the free toll system but if foreign countries commenced to refund their tolls, quite likely the Congress would discriminate in favor of American ships.

So far as the tariff duties are concerned, I told him we are in favor of even tariffs to all nations on all goods, whether carried in domestic or foreign bottoms, but if any countries commenced to discriminate on goods carried in foreign bottoms, we automatically would be compelled to do the same. He said he had perhaps gone farther with his Government than he ought and that he had told them he thought it was very unwise after having taken the matter up with American interests. I thanked him very much and told him I thought it was satisfactory as to the progressive tariff on oil. He said he thought he had arranged it satisfactorily to the American business interests and copper and nitrate companies. He said that the House of Representatives had passed a law; that the Senate was going to postpone it. He said it was largely on his advice; that the cost of manufacturing copper in this country had been constantly going down and the cost in Chile had been going up so that they were about equal and he thought if additional burdens were placed upon the copper companies, the companies would develop more copper in this country and less in Chile.