611.2531/82: Telegram

The Acting Secretary of State to the Ambassador in Chile ( Sevier )

51. Your despatch No. 1582, November 18, 1933, Department desires you to take earliest opportunity accompanied by Norweb who is familiar [Page 146] with previous conversation to press for the general principles contained in the draft agreement. The Department is not disposed to press either for the percentage suggested, which it regards rather as a basis for discussion, nor for the conclusion of a formal most-favored-nation agreement. It does however insist that the present and long-continued de facto discrimination against American commercial interests in the matter of exchange treatment, cease. The Department is not deterred in its viewpoint by the necessity for Chile to modify its present blocking agreements in order to deal fairly with American needs; it expects such to be the case, and cannot accept the view that those agreements should operate to perpetuate the priority now given to other national interests.

For your information the Department does not desire to allocate as between frozen funds and current business whatever exchange may ultimately be made available to American interests. It feels however that the holders of frozen funds, which it understands have already been materially reduced, can only expect gradual reduction, such as is provided in agreements drawn up between the private holders and the Brazilian Governments32 Emphasis should be placed on providing of exchange for current trade requirements.

It seems preferable not to complicate the present discussions for the time by the suggested injection of the additional problems mentioned on page 6 paragraph 133 of your despatch under reference.

The Department is not certain of the relation between the type of arrangement suggested and special arrangements which the copper or nitrate companies may have made with the Chilean Government as regards the disposition of exchange arising from their sales (a) in the United States, (b) in other countries. Please let us have your views on this.

Phillips
  1. See pp. 30 ff.
  2. See paragraph beginning “In view of the changed conditions …”, p. 144.