The written answer of the Minister of Finance, confirming his oral
statements made in the conference, has now been received in the form of
a Memorandum from the Foreign Office, which is enclosed with its
translation. As may be noted, the written reply follows in all essential
respects the oral explanations furnished by the Minister.
Since the last report on this subject, embodied in despatch No. 423 of
July 31, 1935, there have been no new developments, although the Embassy
is happy to be able to report that apparently most of the orders which
were pending have been released in accordance with the promises
made.
It is considered that the subject has now been fully set forth to the
Department for its consideration, and no further action is being taken
or will be taken pending the receipt of the Department’s views and
instructions in the premises.
[Enclosure—Translation]
The Chilean Ministry for
Foreign Affairs to the American
Embassy
Memorandum
1. The measures adopted on June 7, 1935, by the Commission of Control
of International Exchange of Chile are explained by the fears that a
rise might be produced in the value of the dollar and other
currencies, because of excessive demand. It was necessary to
restrict the sale of export drafts for the purchase of articles
which may not be considered indispensable for the national economy
and whose importation would have increased unreasonably
recently.
2. There does not exist and has not existed in the intention of the
Government the idea of altering the situation of trade with the
United States. The restriction imposed on the importation of certain
articles is in accordance with the reason above set forth (1) and
[Page 412]
the exchange produced
by exportations to that country is freely used for the importation
of every kind of merchandise, with the exception of automobiles and
radios which are under special regulations.
3. In order to avoid any unnecessary hardship, the Exchange
Commission has authorized all of the requests for importations
relative to automobiles and radios which were on July 1st in the
port of origin, on board ship or in a Chilean port. With regard to
the spare parts and accessories for automobiles, tires, and spare
parts for radios, the Commission has arranged to authorize not only
those that were in the customs, under the same regulations as for
automobiles and radios, but also future importations within the
usual needs of each importer.
The exchange allocated for this purpose is as follows:
| For automobiles in customs, on board, and in
port |
US $333,275.69 |
| Parts and accessories ordered, in the customs, on
board and in port |
41,240.11 |
| Tires |
9,113.99 |
| Imports of accessories and parts, tires and tubes, for
the remainder of the year, according to the calculated
needs of the importers |
373,500.00 |
| For radios already authorized |
60,613.61 |
| Total |
US $817,743.40 |
4. The Commission has always permitted the importation of every kind
of merchandise from the United States, without any exception, with
the importer’s own availabilities. It is not possible to authorize
recourse to the” “bootleg market”, since it is illegal, but the
importer’s own availabilities may have another origin.
5. There is no discrimination in the application of these measures,
other than that imposed by the fact that a great part of the
restricted articles come from the United States. Other countries
have had to submit to equal treatment.
6. It is not possible to fix an exact period for the application of
these measures. That will depend on the availabilities of export
drafts and on the volume of importation. In any case, the Commission
proposes to maintain them only as long as they are indispensable and
for the period that is strictly necessary.
7. The measures referred to will be applied only to automobiles and
radios. Requests for the importation of every other American product
will be granted without difficulty.
8. Frozen credits. For the moment, the
liquidation (descongelación) of American
credits has been restricted for the same reason (1) that has been
noted. A list of the frozen credits that now exist would
[Page 413]
be desirable, since, just
as a short time ago there was no difficulty in the transfer of these
credits, there is now the intention of facilitating them in the
future, but on the basis of a definite list, even though only
approximate, of such existing credits.
9. Re-exportation. So long as it is a question
of merchandise which is not indispensable to Chile’s economy,
requests for re-exportation will be favorably considered. The legal
obligation to return (retorno) will be
established without setting a definite period.
10. The Government of Chile maintains its previous affirmation, with
respect to the maximum facilities to be enjoyed by American
commerce. Temporary restrictions have been imposed because of
fundamental necessities of economic policy and vital exigencies of
internal stability.
Santiago, August 2,
1935.
