811.20 Defense (M)/3031: Telegram

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

405. For Under Secretary. Saw Rossetti this morning:

1.
Metals Reserve negotiations. Said he had created a perfect atmosphere, which is true, and had used the press for the purpose. Found our representatives sympathetic and understanding and feels positive an agreement certain.…
2.
Increase of one and one quarter cents on copper. Minister had not yet been informed by Michels78 and asked for a memorandum which has been sent. Reported here that Michels has called up his friends here and informed them while failing to inform the Minister. Rossetti seemed greatly interested.
3.
Copper export tax. He insisted there is no cause for worry. He recalled his statement to me previously, as reported, that Government cannot prevent Congress from initiating such measures, and that Government cannot oppose such measures openly when thus initiated because of public opinion.…He said that there are two propositions pending, one to devote proceeds of this tax to armaments and the other to housing and public works. His plan is for Government to propose or sponsor a measure devoting tax to public works since this will lead to prolonged Congressional discussions and Congress adjourns on September 18, only to reassemble on the call of the President. Before it reassembles he hopes some plan as to copper can be worked out by the two Governments. Says that copper tax proposal dangerous as for many years Chileans have looked to such taxes on nitrate, etc., to evade the necessity of imposing domestic taxes.
4.
I reminded him that Chile’s answer on the ship plan proposed by the sub-committee of Inter-American Financial and Economic Advisory [Page 588] Committee79 is due by August 28, and he said that he would do everything to hurry it.

Bowers
  1. Rodolfo Michels, Chilean Ambassador in the United States.
  2. See pp. 185 ff.