825.6374/1093: Telegram

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

26. As planned, representatives of Guggenheim Brothers, National City Bank, and Grace and Company met Saturday with Minister for Foreign Affairs and Minister of Finance. I merely introduced the parties and retired, thinking it better to remain for the present apart from the details of the controversy. The Americans left memorandum asking for the clarification of specific points, which will be discussed at the second conference tomorrow. The Minister of Finance showed no disposition to continue the consolidated industry contemplated by the creditors’ plan of reorganization. The project of law affecting the 60 peso charge was discussed and will be held in abeyance for the time being and perhaps later amended but there was no indication of willingness to change it to remove the discrimination and confiscation of security established by contract.

Minister for Foreign Affairs indicated that he hoped for American cooperation. The possibility of formal representations has given the Government some concern. The Minister for Foreign Affairs spoke about it Saturday. Developments have not gone far enough to warrant optimism. If we show a little firmness now we will save Chile as well as ourselves trouble in the future.

Culbertson