[Enclosure]
Memorandum of Conversation, by the Counselor of
Embassy in Chile (Frost)
Santiago, October 27,
1939.
Señor Pedregal visited the Ambassador on the morning of October 27th,
and discussed the substance of the Department’s telegram No. 147 of
October 21, 2 p.m., which had been conveyed to him by Señor
Wachholtz. He expressed appreciation for the information thus
furnished, and indicated that in conversation between himself and
Señor Wachholtz the conclusion had been reached that there is ground
for hoping and expecting results from a visit to Washington at a
later time. Meanwhile he requested the Ambassador’s advice as to the
desirability of a journey to the United States by himself (Señor
Pedregal) in the immediate future.
The Ambassador stated that in his personal opinion such a journey by
Señor Pedregal could be very useful, particularly in affording to
the Department direct and detailed information as to the Chilean
point of view. The Ambassador felt that, while the Department is
already aware of the effects of the war and of last January’s
earthquake upon the Chilean national economy, a personal
presentation of these factors would be helpful. The extent to which
Chile’s foreign trade has been affected, and to which her productive
capacity is handicapped by reconstruction necessities, merits full
consideration.
In the second place the Ambassador suggested that if or when the
question of the suspension of debt payments arises in conversations
with regard to additional credits, Señor Pedregal might frankly
indicate that anything he could say on this point would be on the
understanding that the Department would not ascribe to his remarks
any hint of menace. The Ambassador felt that by candidly explaining,
as Señor Pedregal had done in the Embassy last week, the earnest
desire of the Chilean Government to avoid suspension it would be
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possible to secure the
approval of the Department for a realistic discussion of the
political and other elements with which the Chilean Administration
will have to deal.
Señor Pedregal expressed very genuine appreciation of the
Ambassador’s kindness in furnishing these two suggestions, in
response to the request which he had made upon the Ambassador. He
stated that, in accordance with conversations with Señor Wachholtz
he might proceed to Washington on the Chilean S.S. Aconcagua, sailing November 15th, to reach Washington
about the 5th of December. This would permit him to furnish details
as to the $5,000,000 credit, and information as to the desirability
of further credits, prior to the termination of the public hearings
on the trade agreement. During the latter part of December, after
the conclusion of the hearings just mentioned, it might be possible
for Señor Pedregal to discuss the adaptation of the plans of the
Fomento Corporation to the tariff concessions which the trade
agreement could include. He realized that the trade agreement would
not be ready for signature by the end of December, when he would
probably be leaving Washington to return to Santiago; but had in
mind that he might advantageously study in collaboration with the
Department the mutually complementary features of the aims of his
corporation on the one hand and of the trade agreement on the other.
He might be accompanied by the head of the Amortization Institute,
Señor Alfonso Fernandez, and possibly by a member of the Exchange
Control Commission or of the staff of the Sub-Ministry of
Commerce.
Ambassador Bowers promised to furnish Señor Pedregal with personal
letters of introduction, and to consult with him at least once again
prior to the beginning of the journey.
