Office of the Historian

825.00 Revolutions/183: Telegram

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

Washington, August 12, 1932—5 p.m.

62. Your 156, July 29, 1 p.m.

1.
The assurances requested in the proposed letter contained in Department’s No. 55 of July 27, 4 p.m. with respect to protection had in mind protection under the laws of Chile and did not have to do with international treatment regarding trade and commerce.
2.
Make memoranda of your various conversations covering equality of commercial rights, taxation, and treatment of American enterprises in general in Chile, as well as respect for the specific concession contracts of the American Light and Power and Telephone Companies, and equitable treatment of American interests involved in the Cosach; show these memoranda to the Minister of Foreign Affairs, and ask him whether they correctly interpret his position. If he says that they do, hand him copies of the memoranda, without covering letter, and tell him that you will make a notation on your copies in the Embassy that they were read to and approved by him and copies left with him.
3.
With respect to foreign currency deposits of American interests, the Department is glad to note that decrees Nos. 12 and 39, which authorized forced conversion at an arbitrary rate, have been repealed. The Department has just received your despatch No. 1217 enclosing a copy of your letter of August 142 to the Minister for Foreign Affairs requesting confirmation of your understanding that assurances heretofore given of respect for foreign currency deposits of Americans apply as well to action which may be taken under law No. 5107. Please advise by cable regarding reply you receive from Minister for Foreign Affairs.

For your information, the Department is sending you an air mail instruction regarding this question of foreign currency accounts of Americans as they may be affected under law No. 5107. As a result of study the Department has made of legislation enacted in many countries which appears to be in general similar to that contained in law No. 5107, Department feels that in the absence of formal assurances from Chilean authorities that they will not convert foreign currency deposits of Americans under law No. 5107, the best way to approach the problem would be through informal efforts to persuade the Chilean authorities not to carry out measures taking over the foreign currency holdings of Americans rather than to argue the matter on a strictly legal basis. This approach has been successful in other countries and if the Chilean authorities should be unwilling to give formal assurances with respect to action under law No. 5107, the Department hopes that you will be able to persuade them to refrain in practice from any steps which would harm individual American holders of foreign currency accounts.

Stimson
  1. Enclosure not printed.↩