The Secretary of State to the Ambassador in Chile (Philip)
78. Your telegram No. 109 of November 1, 6 p.m. You are requested to address a note to the Minister for Foreign Affairs conveying the substance of the following:
“Upon instruction of my Government, I have the honor again to bring to the attention of Your Excellency’s Government the operation of foreign exchange control in Chile as affecting American interests. The policy of my Government in regard to these measures has been, as Your Excellency must be aware, to show all possible consideration to the Chilean Government, notwithstanding the very great burden which has attached to the United States export trade to Chile and to the blocked accounts in Chile of American nationals. My Government has considered it only fair and equitable to expect the same degree of consideration on the part of Your Excellency’s Government towards the problems of American interests adversely affected.
My Government has just been informed of a press announcement stating that Your Excellency’s Government has established a special foreign exchange rate of 35 pesos to the dollar for the importation of certain classes of merchandise, which come chiefly from the United States. I am instructed to state that if this announcement is correct and if, as is understood, imports of the same commodities from countries having compensation agreements with Chile would, in accordance with the terms of such agreements, be granted exchange rates more favorable for importation than the above rate governing imports from the United States, my Government would have no course other than to regard the new rate as discriminatory against the commerce of the United States. The effect of such discrimination would necessarily be to place at a material disadvantage the import trade from the United States, which, following a policy of consistent avoidance of exclusive bilateral trade or exchange agreements in the firm belief that they are injurious to international commerce and world recovery, has not entered into such an agreement with Chile.
In this connection, I am instructed again to bring to the attention of Your Excellency’s Government the practice, established by law, of my Government in generalizing for the benefit of other countries concessions granted in trade agreements provided that discrimination is not made against the commerce of the United States.
Your Excellency’s Government in the concluding paragraph of its courteous memorandum of July 20 last53 stated that it was disposed [Page 361] to study with my Government the vast field of the reciprocal economic relations between the United States and Chile.54 My Government directs me to inform Your Excellency that it welcomes the opportunity which the Government of Chile is disposed to afford for a study of the particulars of the economic relations between the two countries and that it is hoped that certain of the advisers to the American Delegation at the forthcoming conference at Buenos Aires may visit Chile after the conference for the purpose of holding such discussions.”
The Department is sending to you by air mail an instruction concerning representations to be made later in regard to blocked accounts.
With respect to the negotiations for a new modus vivendi you are informed that after careful consideration the Department has concluded not to take up the matter further with the Chilean Government until after the Buenos Aires conference.55