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

No. 5

Sir: I have the honor to refer to this Embassy’s despatch No. 1582 of November 18, 1932 [1933], concerning the granting by Chile of exchange on a most-favored-nation basis. In this connection the Department may be interested to know that the French Minister here has informed me that, acting under instructions from his Government, he discussed with the Chilean Government the subject of the resumption [Page 147] of the service on Chilean loans floated in France, making the suggestion that some arrangement be embodied in the compensation treaty for this purpose. As a result of the Chilean-French compensation treaty, about 60% of the total of frozen credits belonging to French citizens have been deposited in the compensation account. The action taken by the French Minister is a forehanded and astute move looking toward the continued use of the French compensation treaty, after the liquidation of the frozen credits, to cover at least a part of the service on Chile’s external debt in francs.

Respectfully yours,

Hal Sevier