The Secretary of State to the Chargé in Chile (Frost)
10. Your 12 and 13, January 12 and 13. You may say to Garcia that we appreciate the efforts of the Chilean Government to bring the modus vivendi into force provisionally and we are agreeable to an exchange of notes for this purpose. However, as regards the language relating to exchange, i. e. numbered paragraph 3, which he proposes for inclusion in the notes, we feel that the words “in so far as they lie within the administrative authority of the Chilean Government” are inadequate because traders would not know the extent to which the exchange provisions were in force. In this connection, you may suggest the following orally: (1) Subparagraph (a) of numbered paragraph 3 by its own terms contains only such obligations as have heretofore been assumed by the Chilean Government without approval of Congress, (2) Law 5107 of April 19, 193214 (despatch No. 1144 of April 20, 193215) seems clearly to authorize the fixing of rates of exchange without Congressional approval, and (3) as a matter of fact, it is understood that exchange rates have been, and are at present, [Page 429] fixed without Congressional approval. You may then say that considering the foregoing, it seems to follow that numbered paragraph 3 can be put into force provisionally without the qualifying words quoted above.
Inasmuch as there appears to be no question but that all other provisions can be put into force provisionally under the authority of Law 5142, you are authorized, upon assurances of a reply of acceptance, to address a note to the Minister of Foreign Affairs in the following language:
“I have the honor to inform you that my understanding of our recent conversations on behalf of the Government of the United States of America and the Government of the Republic of Chile is that the provisional commercial agreement between our two Governments, effected by exchange of notes, signed January 6, 1938, shall come into force provisionally on February 1, 1938, and, unless terminated in accordance with the provisions of numbered paragraph 7 thereof, shall remain in provisional effect until ratified by the Chilean Congress, after which time it shall come into force definitively”.
Please inform the appropriate officials also that it is not necessary to exchange ratifications in order to bring the modus vivendi into force, either provisionally or definitively, in the United States. If they feel, nevertheless, that such exchange of ratifications is necessary from their standpoint, you may say that we will gladly give the matter further consideration with a view to working out a plan which will be satisfactory to the Chilean Government.