The Ambassador in Chile ( Bowers ) to the Secretary of State
[Received 6:02 p.m.]
17. Department’s No. 4, January 6, 8 p.m. According to Simón, no German proposal for a service between Santiago and Arica has yet been made in writing. However, both he and Shannon24 (manager from Lima who also participated in our discussion) share the Embassy’s opinion that so long as the part of the Panagra schedule is so inadequate the Germans have a ready-made opportunity here. [Here follow suggestions as to details of supplying service.]
Recent rumors which have reached the Embassy of attempted sabotage in Peru (tampering with fuel supply) were discussed with particular reference to the situation in Chile. The Panagra representative professed to be fully alive to this danger and to be taking measures (of the adequacy of which my Military Attaché is not, however, convinced).
With reference to the general problem, I surmise that one reason for the apparent lack of interest previously displayed by the company in the Santiago-Arica service is its exclusion from cabotage [Page 564] rights on that relatively long run which probably limits its immediate profit possibilities. In my opinion the best long term arrangement would be some tie-up between Panagra (or perhaps Export Air Lines) and Linea Aerea Nacional which would provide for the development on a cooperative basis not only of service between Santiago and the north but also between Santiago and the populous area of Chile south of the capital.…However, I am by no means convinced that given a favorable American proposition and the proper negotiators, coupled with appropriate support by our Government, it would not be feasible for an American company to enter into some cooperative arrangement analogous for example to that in Colombia.27 In all this I am somewhat apprehensive lest our continued failure—in the eyes of certain elements in Chile—to remedy the defects in the present service militate against the prospect of American companies sharing in the future development of Chilean commercial aviation.