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  4. Document 481

825.51/1159: Telegram

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

Santiago, October 17, 1939—5 p.m.
[Received 7:44 p.m.]

187. Wachholtz sent for me last night to say that in the light of the Department’s telegram No. 140, October 14, he thought his visit would be inopportune since he would have to return with nothing to show for the journey. Pedregal of the Fomento Corporation could settle the use of the 5 million. He said his policy of reasonable conservatism which is real has centered upon him the fire of others with less sense of financial responsibility and he could not afford to strengthen the hands of his enemies by going and returning empty handed.

2.
He referred to the unused part of the Brazilian credits and asked if it were possible to increase the credits to Chile pending Congressional action.
3.
He asked if it were possible to get Congressional action during the present session.
4.
Referring to conversations with Welles in Panama by Chilean delegates and Welles’ promise to get assistance for Chile in the way of naval defense, he indicated his understanding that his Government is interested, but that he would not be a natural negotiator and that no publicity would be desirable.
5.
The fact is that the war has placed Chile in a very embarrassing financial position which is expected to extend a few months and she needs support now. In this connection he mentioned the authorization (by law 6334) to suspend payments on the American debt which would benefit Chile greatly but added he did not want to do it.

Frost interpreted this as a hint of pressure but it did not impress me that way. He had literally put his cards on the table regarding his personal position and I think he mentioned the possibility as something unfortunate that might be forced upon Chile in her serious embarrassment precipitated by the war.

Clearly he will not visit Washington unless reasonably assured some practical results for Chile and his position certainly is politically sound from local considerations.

Would appreciate the Department’s comment on points 2 and 3.

Bowers