811.20 Defense (M)/941

The British Embassy to the Department of State

Memorandum on Copper

1. His Majesty’s Government in the U. K. made arrangements at the outbreak of the war whereby they secured virtually the whole of their requirements of copper from British Empire sources.

This was of great advantage because (1) Long term contracts were made at a low price; (2) Payment was largely in sterling.

2. Since the collapse of France His Majesty’s Government have entered into an agreement with the Belgian Congo whereby they acquire from the Union Miniere de Haut Katanga 10,500 tons a month.

3. The tonnages taken under these arrangements covered the entire requirements of the British Empire for Raw Copper—except for certain small tonnages which were ordered in the U. S. A. for prompt shipment in the summer months of 1940.

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4. The British Government have been anxious for many months to do all that lies in its power to help relieve the problems of maladjustment of supply to demand which the shutting off of the European market has created for the South American producers of raw commodities; and in His Majesty’s Ambassador’s memoranda of July 3rd, 1940,61 suggestions were made to the U.S. Government for cooperation to help solve these problems. In the opinion of the British Government copper is one of the commodities which calls most urgently for consideration.

5. Since Japan joined the Axis Powers,62 His Majesty’s Government have taken steps to limit the free importation by Japan of certain key commodities produced within the British Empire and in accordance with what it believes to be the trend of U.S. policy it has proposed to the State Department, informally, that parallel action by His Majesty’s Government and the U.S. Government should be taken to limit Japan’s acquisition of war reserves, or “stock pile”.63

6. For the purposes cited under (4) and (5) above the British Government now wish to make certain proposals to the United States Government on the subject of copper in order to meet:—(1) The problem created for Chile by the collapse of its copper export market. (2) The problem of preventing Japan from exploiting Chile’s need of an export market in copper and thereby acquiring a substantial war reserve of copper. The urgent need for this arises from the fact that since July 15th Japan has ordered 100,000 tons of copper in the U.S.A., mostly of Chilean and South American origin and has in fact shipped some 80,000 tons. 100,000 tons of copper is about 6 months normal consumption by Japan.

His Majesty’s Government wish to ask whether the U.S. Government would be prepared to arrange with the U.S. copper companies operating in South America to

(1) Limit production to 400,000 tons per annum (which is approximately their total export figure of 1939) divided as follows:—

Peru and Mexico 80,000 tons
Chile 320,000 tons

divided as to

Kennecott and Anaconda 300,000 tons
Independents 20,000 tons

(2) Permit annual exports of this 400,000 tons as to

Spain and Portugal 15,000 tons
Japan and Russia 115,000 tons

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(3) Cooperate with the U.S. and British Governments in regard to the disposal of the balance of 270,000 tons.

7. In order to assist in the disposal of this 270,000 tons, His Majesty’s Government would wish to know

if they on their part should buy 100,000 tons per annum from Chile to replace a similar quantity released by the British Empire producers, would the U.S. Government for their part buy 170,000 tons: or, failing this, how much of the 170,000 tons would the U.S. Government be prepared to buy.
if the U.S. Government are willing to undertake a joint copper buying policy in South America of this nature, (for the double purpose outlined in paragraphs (4) and (5) above) at what price the South American copper can be bought.

8. His Majesty’s Government would greatly appreciate receiving an answer to the above questions at the earliest possible moment, and without the knowledge of these proposals coming to the U.S. companies concerned.

  1. Ante, p. 52, and vol. iii, section under United Kingdom entitled “Anglo-American relief and international control of commodities”.
  2. A pact between Japan, Germany, and Italy was signed at Berlin, September 27, 1940; for text, see Foreign Relations, Japan, 1931–1941, vol. ii, p. 165.
  3. See vol. iv, pp. 565 ff. passim.