811.20 Defense (M)/928a

The Under Secretary of State (Welles) to the Deputy Federal Loan Administrator (Clayton)

My Dear Mr. Clayton: Reference is made to the arrangements recently announced by the Metals Reserve Company for the purchase of 100,000 tons of copper from the other American republics, and to conversations between officers of the Department and officers of the Federal Loan Agency with respect to the distribution of these purchases.

It is the Department’s opinion that purchases should be distributed among the principal producing nations in accordance with the following schedule:

From Chile —At least 75 percent
From Peru —Not less than 9 percent
From Mexico —Between 5 and 10 percent.

With respect to purchases from Chile, the Government of Chile has, as you are aware, indicated its great interest in having all of the copper concentrates produced by Chilean nationals acquired by the United States. It has indicated that it could take steps to facilitate the purchase of such concentrates by American concerns for the purpose. It is the opinion of the Department that, if such arrangements can be satisfactorily made by the Chilean Government, it would be highly desirable that the entire production of copper concentrates by Chilean nationals, amounting I understand at the present time to 12,000 to 14,000 tons annually, be acquired by the Metals Reserve Company.

Sincerely yours,

Sumner Welles