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

No. 42

Sir: The Department acknowledges the receipt of your telegram No. 14 of January 23, 6 p.m., reporting assurances from the Chilean [Page 329] Minister of Finance that all exchange restrictions on the importation of American automobiles and other products have been lifted and that American blocked funds will be liquidated in the immediate future. The Department commends you for this outcome of your conferences with the Chilean authorities.

It would appear from your telegram, however, that the Chilean Government still maintains its recent restriction prohibiting the sale of exchange for payment of imports of American products until the importer exhibits documentary proof that the shipment is en route to Chile. The Department understands that under this regulation Americans desiring to export to Chile cannot require a cash payment upon shipment but must embark the goods and give a certain period of credit whether or not the credit rating of the prospective importer entitles him to such an accommodation. It would seem that in many situations this requirement would be unfair to American exporters and, in addition, according to your despatch No. 71 of January 11, 1936.26 exporters of countries which have compensation arrangements with Chile are not subject to such requirements.

You are accordingly authorized in your discretion to take up this matter with the appropriate Chilean authorities and, expressing this Government’s appreciation of their recent action in lifting exchange restrictions on the importation of certain American products, state that this Government hopes that this regulation will also be raised in view of the objections to it mentioned in the preceding paragraph.

With reference to the assurance regarding the liquidation of American blocked funds in Chile and the statement in your despatch No. 57, of December 21, 1935, that you had furnished the Chilean Minister of Finance with lists of blocked credits known to the Embassy, there is transmitted a copy of a letter from the Oil States Petroleum Company, dated December 11, 1935,26 and a copy of a letter from Rear Admiral A. W. Johnson, United States Navy, dated December 30, 1935.27 with reference to their blocked funds in Chile. Will you kindly therefore include these items in the lists submitted by you to the Chilean Government of American frozen credits, and continue to report to the Department as to the prospects of liquidation of these and similar frozen accounts.

Very truly yours,

For the Secretary of State:
Sumner Welles
  1. Not printed.
  2. Not printed.
  3. Not found in Department files.