I have found Señor Pedregal frank, business-like in his directness, and
of good will, and have assured him that he can talk in Washington with
our officials with equal frankness without fear of having his motives
misinterpreted. I have urged him, in other words, to paint a complete
picture of the Chilean situation as he and the Minister of Finance see
it, and have assured him that he will be heard sympathetically.
[Enclosure]
Memorandum of Conversation, by the Counselor of
Embassy in Chile (Frost), December 5, 1939, 6 p.m.
| [Participants]: |
Ambassador Bowers |
|
Minister of Hacienda |
|
Executive Vice President of the
Fomento Corporation |
|
Counselor Frost |
The Minister opened by stating that Señor Pedregal was being sent to
Washington with the full and complete confidence of the Chilean
Government, for whom he was authorized to speak. In the United
States at the present time are Señor Manuel Bianchi, Chilean
Ambassador to Spain, and Señor Alfonso Fernandez, head of the
Amortization Institute, with whom Señor Pedregal will consult. While
the Chilean Government has believed it better not to constitute
these three gentlemen into a formal commission, it apparently wishes
the American Government to treat them informally as
commissioners.
The Minister then adverted to Chile’s outstanding need for dollar
exchange, referring to the large volume of demands for dollars with
which the Exchange Control Commission now has to cope, covering
desired imports or commodities formerly procured from Europe. In
this connection he stated that the Chilean Government did not assume
the proposed trade agreement to constitute anything more than a very
limited corrective in furnishing dollar exchange, and requested
general comments from the Ambassador in regard to the trade
agreement.
The Ambassador in reply indicated that the opposition to the
agreement in the United States had been political and based on local
economic interests, and should not be taken in Chile as indicating
any unfriendliness on the part of the American Senatorial and other
critics toward Chile. He further intimated the desirability that any
further studies or decisions to be made in Chile in connection with
the agreement be concluded at the earliest possible time, in order
that the instrument be signed by the end of the present month.
Minister Wachholtz stated that he would endeavor to facilitate the
studies still
[Page 460]
outstanding,
as he could appreciate the circumstances which call for an early
termination of the negotiations if they are to be successful.
Referring to Chile’s need for dollar exchange, the Minister mentioned
the ocean freight situation, and stressed Chile’s need for ships. He
hoped that the American Government might be able to assist Chile in
acquiring additional tonnage (a matter which Mr. Pedregal had
previously mentioned as one of his errands to Washington); and
suggested that the only alternative would be for Chile to secure a
greater share of the traffic now handled by the American steamship
line here. While the C.S.A.V.60 has been admitted to the
steamship conference,60a this has only
been under conditions which he feels will impede it in taking over a
fair share of the traffic. In other words, he would like either more
ships or a greater share in the trade, and wishes the American
Government to interest itself. (This point was based on the earnest
Chilean contention, apparently well-founded, that Chile’s need for
dollars to pay ocean freights each year constitutes a very heavy
drain upon her dollar resources.)
The Minister then mentioned the need of his Government for experts in
the applied sciences. He stated that the Fomento Corporation
contemplates the establishment of experimental and research
laboratories to deal in a practical way with the various raw
material resources which Chile possesses. The securing of experts
and scientists to get this project under way would be difficult,
because of the high salaries commanded or demanded by American
consulting engineers, chemists, etc.
The Ambassador referred to the standing offer of the American
Government to furnish experts from the technical bureaus of the
Departments of the Interior and Agriculture; and after some
discussion and elaboration the Minister failed to indicate any
definite reaction.
With regard to the Chañaral (or Paipote) smelter, the Ambassador,
speaking purely from a psychological and political standpoint,
ventured the suggestion that it might be advisable not to include
among the first projects undertaken under the five million dollar
grant one which would manifestly injure important American interests
and perhaps give rise to criticism and opposition in the United
States of a potentially embarrassing character. Both Señores
Wachholtz and Pedregal at once expressed comprehension of this view,
and Señor Pedregal stated that he has arranged to visit New York
before going to Washington and to confer with the President of the
American Smelting and Refining Company. He hopes and expects to
reach an understanding with the latter before approaching the
Washington authorities; and, in accordance with the Ambassador’s
hint, will have
[Page 461]
other
projects to submit in case it appears that the smelter project, in
which he has special faith, would entail difficulties.
Señor Pedregal indicated that he would furnish the Embassy with
biographic data which might be given appropriate use at Washington
and New York through the Embassy’s good offices. Both gentlemen
expressed appreciation of the attitude of the American Government,
and the Ambassador bade Godspeed to Señor Pedregal.
