825.51/1278: Telegram

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

269. Reference your No. 182, October 31, 1 [6] p.m., and 186, November 4, 8 p.m., and my telegram No. 263, November 6, 6 p.m.32

Exchange Control Commission now has furnished itemized list of exchange totaling United States dollars 6,086,178 it claims owed to 71 American concerns for goods sold to firms in Chile and reports total amount exchange owed all American concerns for goods is $8,500,000 the difference between these two sums representing very many small accounts owed some 500 American exporters. Itemized list was compiled from statements some 30 important commercial houses here were requested to submit by Control Commission reporting amounts of exchange they have applied for but had not yet been granted and names of United States exporters to whom monies were owed. $2,413,822 declared owing [apparent omission] was arrived at by Exchange Commission subtracting amounts of itemized list from $8,500,000 which figure apparently is approximately total all dollar exchange applied up to the present for, but not yet granted for, payment United States goods. In view of manner in which information was compiled by Exchange Control and presumably because its records do not permit preparation of data showing actual arrears the $8,500,000 reported owed should be considered an all inclusive figure and if assistance in that amount is made available it is believed that Exchange Control could provide cover for all applications pending at this time for payment American merchandise.

There always is in this market a float of unmatured and currently maturing bills for imports and for which exchange has been requested. This float has been included by Exchange Control in United States dollars 8,500,000. If this float, unofficially but reliably estimated at United States dollars 1,500,000 to United States dollars 2,000,000, is deducted it would appear that amount of exchange actually in arrears probably is between United States dollars 6,500,000 and United States dollars 7,000,000. On basis of latter figures Department and Export and Import Bank may wish to consider granting exchange assistance. Control Commission declares unable to break down United States dollars 8,500,000 according to goods in the country for which exchange has been applied but has not been granted, goods held up in customs for which exchange has been applied, goods in transit and/or on order for which exchange has been applied. Commercial Attaché after discussions exchange with leading importers believes United States [Page 689] dollars 8,500,000 may be broken down more or less as follows: Goods already in the country United States dollars 5,000,000, held up in customs $2,500,000, in transit and/or on order $1,000,000. Major part of $5,000,000 for goods already in country but not yet paid for can be accounted for substantially as follows: (All figures United States currency) Standard Oil Company of New Jersey 620,000; General Motors 250,000; Anglo-Mexican Petroleum, New York, 400,000; Balfour Guthrie, New York, for general merchandise 150,500; International Standard Electric Company 110,000; International Harvester Corporation 163,400; Ford Motor Company 383,600; Eastman Kodak Company 108,000; Grace and Company for general merchandise 700,000; Wessel Duval for general products 800,000; Singer Sewing Machine Company 348,000; Goodyear 56,800; United States Rubber 35,600; Goodrich 30,100; Kelly Springfield 37,200; United States Steel Corporation and Bethlehem 222,400 and 128,000 respectively.

Last two amounts owed in names of these concerns to local banks for dollar commercial credits opened New York. Past observations of manner in which exchange control has functioned indicate need of including in any arrangement for exchange relief provision preventing accumulation new arrears by limiting issuing import license for goods whose aggregate value in any 3 months or other period would not exceed conservatively estimated exchange receipts for same period. Full report being transmitted air mail.

  1. Telegram No. 263 not printed; it gave preliminary report.