825.5151/183: Telegram

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

35. Your despatch No. 77, March 28. The Department will shortly send you a further instruction on this subject. It desires first to have from you an interpretation of the first sentence in item No. 1 of the memorandum (enclosure No. 2 of despatch referred to). Does this mean in your understanding and in the understanding of the Chilean Government that exporters in Chile who acquire dollars by sales in the United States will be free to dispose of those dollars wherever and however they desire without the intervention of the exchange control? Under this arrangement would the requirement be retained which Department understands exists at present whereunder foreign producers of minerals must remit to the exchange control a certain percentage of the proceeds of all their sales? Also would any percentage of the proceeds of nitrate sales to the United States be blocked for special purposes, thereby preventing their reaching the free market? If these requirements are still to be retained what percentage of proceeds of sales of such producers will be freely disposable? Purpose of this inquiry is to make sure that this Government and the Chilean Government have the same understanding of the terms used in this sentence.