825.6374/1123: Telegram

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

50. Referring to your telegram No. 19, March 23, 7 p.m., I am sincerely grateful for your effective support. I presented the aide-mémoire today to the Minister for Foreign Affairs and expect to talk [Page 169] with the President tomorrow. The Minister for Foreign Affairs reflected a desire to avoid further difficulties and hoped to have some suggestions soon which would contribute to a solution.

Your suggestion of arbitration is relevant but unfortunately the Supreme Court of Chile could not be under present conditions an impartial arbitrator. For example, the third liquidator was appointed by the Supreme Court upon the theory that he would act as impartial judge between the Government and the private interests in resolving all questions in the Liquidating Commission. However, although a former Minister for Foreign Affairs and a man of standing, in actual practice he has in every case taken his instructions from the Minister of Finance and voted accordingly.

If the Chilean Government will reacknowledge the principle of the 60 peso charge and re-establish the rights of the parties under contract affected adversely by the arbitrary action of the Minister of Finance I believe the way may be open for a solution by conference.

British, Germans and Dutch are also making representations similar to ours.

Press representatives have been tipped off from Washington and are asking us for information. We have declined all comment. I assume that for the time being it is not intended to make any public statement.

Culbertson