611.2531/178

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

No. 527

Sir: I have the honor to confirm the receipt of the Department’s cabled Instruction No. 6 of February 18, 6 p.m., and to transmit with this a copy of a note to the Ministry of Foreign Affairs, dated the 22nd ultimo, and which encloses the text of a new modus vivendi between the United States and Chile as proposed by the Department.

I had hoped that before this I might have been in receipt of some definite statement from the Foreign Office as regards its acceptance of the proposed text.

However, the Department will understand that owing to the retirement of the Minister of Foreign Affairs and the subsequent distractions involved by the parliamentary elections of the 7th instant and resulting uncertainties as to changes in the Cabinet, there has been no real opportunity to discuss the matter with an authoritative official. Therefore, I have judged it best to adopt a waiting attitude.

I judge from comments made to me by minor officials of the Foreign Office that the Department’s proposal was received with a certain sense of relief by the Chilean Government. I am not certain, however, that this was not due most largely to certain reference in the text to the prospect of an eventual treaty of commerce and navigation.

It has been reported to me that the Chilean Embassy in London has given the British Government to understand that negotiations are pending with the United States for such an instrument.

Although this information is not authoritative, I do know that Chile has pressed the advocacy of such a treaty with Great Britain for many months past and it is not unlikely that the Government would find it advantageous in that quarter to be able to point to the fact that similar negotiations with the United States were under way.

I am also under the impression that the Department would not object to affording Chile such indirect assistance should the latter accept a form of modus vivendi which would meet with its approval.

Minor officials of the Foreign Office here have commented to me upon the Department’s draft in rather favorable terms. The desire has been expressed in these comments that we agree to certain changes in the text which would strengthen the outlook for a definite treaty of commerce and navigation to follow, etc.

At the present moment the resignation of the Minister of Hacienda and Acting Minister of Foreign Affairs16 is still in suspension, and [Page 387] nothing definite is known yet as to the appointment of a successor in either office.

The Department will be promptly informed of any developments which may transpire in connection with its proposed form of modus vivendi.

Respectfully yours,

Hoffman Philip
[Enclosure]

The American Ambassador ( Philip ) to the Chilean Acting Minister for Foreign Affairs ( Ross Santa Maria )

Excellency: I have the honor to refer to my previous conversations with His Excellency Don Miguel Cruchaga Tocornal with regard to the substitution of a new modus vivendi to replace that of September 28, 1931 between our respective Governments.

I have the pleasure to inform Your Excellency that in deference to the expressed wishes of the Government of the Republic of Chile, reiterated on two occasions by the Ambassador of Chile in Washington, my Government has authorized me to submit for your consideration the draft of a modus vivendi, herewith transmitted, and which it has empowered me to effect by an exchange of notes immediately.

I hope that the accompanying draft will meet the approval of Your Excellency’s Government.

Accept [etc.]

Hoffman Philip
[Subenclosure]

American Draft Note Embodying Provisional Commercial Agreement

Excellency: I have the honor to confirm to Your Excellency the terms of the provisional commercial agreement which our respective Governments have agreed to establish pending the negotiation of a more comprehensive commercial agreement or of a definitive treaty of commerce and navigation, as follows:

1.
The contracting parties agree to concede reciprocally unconditional and unlimited most favored nation treatment in all that concerns customs duties and all accessory imposts, the manner of applying duties as well as the rules and formalities to which customs operations can be submitted.
2.
In the event that the Government of the United States of America or the Republic of Chile establishes or maintains any form of quantitative [Page 388] restriction or control of the importation or sale of any article in which the other country has an interest, or imposes a lower duty or charge on the importation or sale of a specified quantity of any such article than the duty or charge imposed on importations in excess of such quantity, it shall allot to the other country during any quota period a share of the total quantity of any such article permitted to be imported or sold at such lower duty or charge which is equivalent to the proportion of the total importation of such article which such other country supplied during a previous representative period, unless it be mutually agreed to dispense with such allocation.
3.
The Government of Chile agrees to impose no restrictions or delays on payments for any future imports from the United States.
4.
It is understood that the advantages now accorded or which may hereafter be accorded by the United States of America, its territories or possessions, the Philippine Islands, or the Panama Canal Zone to one another or to the Republic of Cuba shall be excepted from the operation of this agreement.
5.
Nothing in this agreement shall be construed as a limitation of the right of either country to impose on such terms as it may see fit prohibitions or restrictions (1) imposed on moral or humanitarian grounds; (2) designed to protect human, animal or plant health or life; (3) relating to prison-made goods; (4) relating to the enforcement of police or revenue laws; or (5) relating to the control of the export or sale for export of arms, ammunitions, or implements of war, and, in exceptional circumstances, all other military supplies.
6.
The agreement between the United States of America and the Republic of Chile signed September 28, 1931, shall terminate on the day on which the present agreement comes into force.
7.
The present agreement shall come into force as of this day and shall continue in force until superseded by a more comprehensive commercial agreement or by a definitive treaty of commerce and navigation, or until denounced by either country by advance written notice of not less than thirty days.

Accept, Excellency, the assurances of my highest and most distinguished consideration.

  1. Gustavo Ross Santa Maria.