611.2531/584: Telegram

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

221. Department’s numbers 163 and 164, December 9, 1 p.m. Estimates here indicate that the Department is offering reductions on Chilean exports to the United States whose value in 1938 was between 200 and 250,000 dollars. Moreover Chile’s production and exports of the products is not susceptible of great expansion. In other words the offer is so restricted as to have little value. On the other hand the reductions sought for American products sold to Chile affect some 3 to 3½ million dollars worth of trade.

In my judgment the submission of such a proposal is not only likely to be rejected but our Good Neighbor policy toward Chile is certain to be seriously discounted, unless we offer Chile concessions on red kidney beans, onions, bulk wine, et cetera, and at the same time greatly reduce our requests from it in our Schedule I.

We are actually asking Chile to give up in customs revenue more than the total value of the trade on which we are making reductions which is less than 1 percent of Chile’s exports to the United States. [Page 432]If we cannot make further concessions as above suggested and reduce our demands the postponement of negotiations indefinitely on some pretext or other would probably do less damage to us here. Request instructions.

Bowers