825.6362/30: Telegram

The Ambassador in Chile (Collier) to the Secretary of State

168. Your 58, November 1, 7 p.m. It is true Chilean Government shows unwillingness to modify coal and petroleum bill. Minister of Hacienda last Sunday published full page exposition in local newspapers, criticising American companies for not having made representations as to innumerable and varied propositions and suggestions criticising methods for protecting the coal industry advanced during the last 5 years. His exposition also sought to justify Government’s action and challenges statements made by local representatives of North American interests as to burden which proposed new law will impose upon them. I immediately addressed a note to Foreign Office defending companies for not having bothered Government with representations as to proposals that had not received Government’s approbation and referring to Minister of Hacienda’s admission that Government’s proposition was not published until September 2nd, and that companies’ representations were made September 29th, and the American Government’s representations, based upon necessarily partial and incomplete information, were made October 14th. I requested, in view of the immensity of interests involved, that the matter be studied further by Chilean Government [Page 540] and opportunity be given American Government to become more fully apprised as to the facts.

I have engagements to see Minister of Foreign Affairs and President of the Republic as to matter today. Minister of War and Minister of Fomento are dining with me tonight. Last-mentioned should be particularly interested. I will endeavor to present the matter to all of them and also will see Minister of Hacienda if possible.

Rampant protectionist sentiment and desperate condition of Chile coal industry, coupled with [paraphrase] the reported statement that powerful Chilean nitrate companies are willing to accept an increased duty on coal which they use provided that the Chilean Government will reduce the export duty on nitrate [end paraphrase], make it doubtful whether duties will be materially reduced; but I will do the best I can. Incidentally it should be borne in mind that loss of revenue caused by any possible reduction of nitrate export duties will be made up by increased taxes, probably on copper and possibly on iron ore.