825.5151/364: Telegram

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

109. Department’s 75, October 31, 2 p.m. There is practically no information obtainable from official sources as to motives of the Government in establishing this new gold rate of 35 pesos to the dollar. The apparent reason is to further restrict imports primarily from the United States. Discrimination is clear and best illustrated by concrete example: tires can be imported from France either through “a” account or private compensation. The rate for the former is placed by Government decree at 135% of official rate—equivalent to 26.14 pesos per dollar—see E and T note 340 of March 27, 1936,51—and for the latter at rate set by supply and demand. Passenger car tires from the United States arbitrarily subject to 35 peso gold rate. This rate is equivalent to 161% of official rate and is between 5 and 6 pesos higher than value of gold as reflected in extra-legal market where supply and demand sets quotations. Former 30 peso rate, although higher than account “a” rate, was made here on grounds that it reflected approximately true rates and thus made full production legally available.

I believe that prompt action in this matter is most advisable and after consideration I request Department’s authorization to send note to the Minister for Foreign Affairs at once which will embody a protest against the new regulation based upon the situation as above indicated to be.

  1. Economic and trade note not found in Department files.