810.5151 Williams Mission/2
The Secretary of State to the Special Representative of the Department of State (Williams)
Dear Mr. Williams: I am very pleased that you are undertaking a mission to certain important countries of South America in connection with the problems created by the control of exchange by the Governments of these countries.
As you know, this Government is striving to develop trade with the countries of Latin America. These exchange controls are one of the greatest present obstacles to that effort, and are costly to our producers and exporters. Although the trade of these countries has tended to increase recently and the pressure on their exchanges appears to have been easing somewhat, the controls are still in existence and continue to present perplexing difficulties both to American traders and to the Department.
The general policy that the Department has endeavored to uphold looks towards the diminution of the controls which impede international trade, and thus to achieve a more satisfactory trade relationship. In the meanwhile, its interest is to lighten the restrictive force of these controls as applied to American trade and to protect American trade against discriminations.
This Government has avoided, as far as possible, special arrangements that would increase the administrative regulation of trade and the extension of control over the foreign exchanges; it trusts that the American interest can be properly protected by understandings and agreements which do not involve serious extensions of these controls. The outline of these policies we have presented repeatedly to the Latin American Governments concerned both through the medium of their representatives in Washington and through our own diplomatic missions.
[Page 391]In accordance with the preceding ideas, you are instructed to visit the capitals of Argentina, Brazil, Chile and Uruguay (and you are also authorized to go to any other points in these countries in the event that it seems advisable in order to carry out the purposes of your visit). In each of these countries the American diplomatic and commercial missions will be instructed to assist you in obtaining the fullest possible understanding of all aspects of the exchange control situation, and to put you in touch with the local governmental authorities who are concerned in this matter. You in turn are instructed upon your arrival in each of these countries to put yourself at the disposition of the head of the mission for the purposes of assisting him in the consideration of the exchange control situations with which he has been dealing and for the purpose also of working out with him the major lines of policy immediately to be pursued by this Government. You will find that these missions have given very considerable thought to the subject and have kept themselves closely advised.
The missions have in fact recommended lines of possible agreement to the Department. It may well be that the occasion of your visit will be an auspicious time to formulate and to begin to negotiate with the foreign governmental authorities agreements to govern the treatment of American trade interests. In that event you will kindly give all assistance to the missions in the negotiation of these agreements. Of course, before entering into negotiations with any foreign governmental authorities the American mission will submit the proposed agreements to the Department for approval before in any way committing this Government.
I may perhaps summarize very briefly the immediate lines of suggested action which you are likely to discover in the countries you will visit.
In Chile the American Ambassador has been in negotiation with the Chilean authorities looking forward to an agreement in accordance with which the foreign exchange that arises out of trade between the United States and Chile will be released from the exchange control. A difficulty has arisen in connection with the rate at which exchange may be made available by the Chilean authorities for the purpose of gradually paying off the commercial and other frozen credits due to Americans. After study of the situation, the Department will welcome receiving, through the American Ambassador, your views on the situation and your recommendations regarding action. It believes there is a possibility that during your visit to Chile the final steps may be prepared towards reaching an agreement with the Chilean Government.
… The Brazilian Government appears to be tending to foster special agreements with other governments in an effort to assure or [Page 392] secure new markets for its coffee, which agreements may prove to be disadvantageous to American interests. You are instructed to give the fullest possible study and consideration to this whole subject. The American Embassy has submitted a carefully prepared analysis to the Department, of which I believe you have a copy. This report2 concludes by setting forth the alternative lines of action which may be open to the American Government and recommends one of them. You are instructed to confer with the American mission in regard to these recommendations and the Department will be glad to receive from you, through the American Ambassador, your judgment as to the most advantageous course to pursue. I hope that it may prove possible during your visit in Brazil for the first steps to be taken by the American Embassy, working in cooperation with yourself, towards an agreement with the Brazilian authorities. Again, you will understand that all proposed bases of negotiation with the Brazilian Government should be submitted to the Department for approval.
As regards Argentina, a general judgment exists that Argentine exchange arrangements are now distinctly working to curtail American trade. After study of the subject and conferences with the Embassy this Department will be glad to receive, through the Embassy, any recommendations regarding action which in your judgment will serve to protect American interests.
Upon your return, I would appreciate it if you will report fully to the Department.
Mr. Donald B. Heath of the Division of Latin American Affairs of the Department has been assigned to you as assistant and is being instructed accordingly.
Sincerely yours,
- Presumably report dated May 31, 1934, not printed.↩