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

No. 261

Sir: I have the honor to report that late in the morning of the 11th instant I was requested to visit the Chilean Minister of Foreign Affairs at the Foreign Office. Arriving there about 11:30 A.M., I was received by Don Miguel Cruchaga and Mr. Benjamin Cohen, Chief of the Diplomatic Department of the Ministry.

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The Minister informed me that his Government had prepared a memorandum48 in reply to that which was handed to the Chilean Ambassador by Mr. Welles on May 11th [29th?] last.

. . . . . . . . . . . . . .

It is my conception that no useful purpose would be served by any extensive critique of the text of this memorandum.

The main point seems to be that Chile admits a dangerous shortage of dollar exchange, and this condition is indicated by the report of the Commercial Attaché which is being submitted to the Department in this pouch. The memorandum suggests that the only methods by which more of this exchange can be created is by “increased consumption of Chilean products by the United States, or by the acceptance, in payment for American merchandise exported to Chile, of a part of the sums now retained in the United States for the payment of services on capital invested in the nitrate, copper and iron industries”.

Doubtless the latter suggestion has been inserted at the instigation of Señor Gustavo Ross, Minister of Hacienda. From all I have gathered here so far, the adoption of this suggestion would seem to me both impracticable and unjust.

Respectfully yours,

Hoffman Philip
  1. Not printed. A copy and translation was enclosed with the despatch. The original was transmitted to the Department by the Chilean Embassy on July 20 (625.116 Autos/7).