825.516/137: Telegram

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

84. Department’s telegram No. 31, June 13, noon.11

“My esteemed Mr. Barriga: I have the honor informally to call your attention to my note No. 846 of June 3rd, 1932, addressed to Señor Don Carlos Balmaceda, in which I referred to law No. 5124 which grants to the President authority to establish a State monopoly of the importation of petroleum, its derivatives and substitutes, and of the distribution and sale of these products. This note contains the following statement of policy:

‘My Government has asked me to say to you that in many ways the Chilean Government takes steps to make the monopoly effective and in so doing expropriates or otherwise forces out of business American interests established in Chile; my Government will support a claim for adequate and effective compensation. By effective compensation is meant compensation to those suffering loss, which would be convertible without difficulty into the currency of the United States within a reasonably short period after the act of expropriation.’

The policy of my Government stated in this communication applies not only to American property in the oil business but to all other American property in Chile.

In the newspapers of today is published a decree signed by the members of the Junta which declares credits and deposits in foreign currency which the public may have in national and foreign banks the property of the State; and provides for compensation in domestic currency at the rate of exchange prevailing on June 3rd.

I desire to call your attention to the adverse effect this decree may have upon American interests. It threatens American depositors who [Page 443]have foreign currency accounts in local banks with serious losses and if it should be applied to American banks doing business in Chile it would oblige them to violate their trusteeship to their depositors.

Accept, my esteemed Mr. Barriga, the assurances of my high consideration.”

Culbertson
  1. Not printed; in it the Department asked for full text of written communication to the de facto authorities.