825.516/155: Telegram
The Ambassador in Chile (Culbertson) to the Secretary of State
[Received 2:30 p.m.]
100. Referring to Department’s telegram No. 41, June 17, 6 p.m., decree law No. 38 was signed and promulgated June 16th and reads as follows:
“Article 1. Article 34 of decree law No. 486 of August 21, 1925 which created the Central Bank of Chile is modified in the following form:
‘Article 34. The shares of class A subscribed by the State shall not have the right to vote; but the Executive shall have the power to appoint three members of the Board of Directors, who shall not be members of Congress, nor directors or salaried employees of share-holding banks. The appointment must be made by the Executive, who shall be able to reelect those appointed.’
Article 2. Article 39 of the same decree law which created the Central Bank of Chile is replaced by the following:
‘Article 39. In addition to the seven directors indicated in the preceding articles, the Executive shall elect three directors who shall represent the productive activities of the country.
These three directors shall hold office for 3 years and can be reappointed indefinitely.’
The present decree law shall be effective from this date.
To be noted, communicated, published and inserted in the Bulletin of Laws and Decrees of the Government. Arturo Puga. Eugenio Matte. Rolando Merino. Alfredo Lagarrigue.”
In view of the coup d’état of June 16th the new Junta did not permit the promulgation of the second decree, mentioned in my telegram 93, June 16, 4 p.m., appointing the six new Government directors. The acting manager of the Central Bank informed me this morning that these appointments will be made by decree this afternoon and that the new directors will be “men of the first order”. He added that he had a long conversation this morning with the new Minister of Hacienda who stated that it is the firm intention of the Government to permit the operation of the Central Bank as heretofore without interference from the Government. It would appear that the present de facto authorities are fully cognizant of the adverse effects which Chile would suffer from an attempt to carry out the policy with respect to the Central Bank undertaken by the first socialistic Junta, reported in my telegram 66, June 9, 10 a.m.17