723.2515/3242½

Memorandum by the Secretary of State of a Conversation With the Chilean Ambassador (Davila)

The Chilean Ambassador informed me today that his Government had instructed Figueroa, the Chilean Ambassador to Peru, to offer to Peru all the territory north of a line on an average of about ten kilometers north of the railroad. The line could not be exactly ten kilometers because it would not in every place conform with the line of the railroad but it would be as near as could be. Also that Chile would complete all public improvements in Tacna at its own expense, estimated at about six million Chilean pesos.

The Chilean Ambassador also said that Chile would be willing to make Arica a free port to Peru the same as Bolivia has at the present time and they would have their own Customs House and the same duties in the port that Chile and Bolivia now have. Chile now has a preferential duty. In this way Peru would have the same preferential low duties which Chile and Bolivia now enjoy; that Peru would enjoy the same tariffs on the railway and the Arica Tacna provinces would have access to the same ports and the same rights that they now enjoy.