811.20 (D) Regulations/2092: Telegram

The Secretary of State to the Ambassador in Peru ( Norweb )

99. Reference is made to your 165 of May 8.45 The Department is gratified by the announcement of the decree establishing an export licensing control system. You may give assurances that Peru will receive as favorable treatment under the Lease-Lend Act46 as any other country cooperating in Hemisphere defense.

In accordance with the policy referred to in the instruction of April 1,47 Metals Reserve Company48 is willing to enter into an agreement with the Peruvian Government whereby the Metals Reserve Company will acquire all of the Peruvian production of antimony, tungsten, molybdenum, vanadium, lead, copper, zinc, and bismuth except such of these materials as may be required for domestic use in Peru and except such materials as may be exported to other Latin American republics which have established export control systems in collaboration with the United States Government. Such an agreement would not interfere with the normal flow of these materials to private purchasers in the United States market. The agreement would be for 2 years and would have a top limit of the amounts of each material which Metals Reserve would be required to buy. Metals Reserve would however have an option to buy all Peruvian production of each material in excess of these stipulated top limits which would not be absorbed by domestic use in Peru or the United States or by exports to Latin American countries having approved export control systems. During the life of the agreement the Peruvian Government would prohibit the export of the materials subject to the contract except to the United States and other Latin [Page 525] American countries having export control systems established in collaboration with the United States Government. The prices would be worked out in negotiations which it is hoped will take place immediately if this offer is accepted in principle by the Peruvian Government. Presumably it will be necessary to deal with the smaller producers through a Peruvian Governmental agency.

You are requested to advise if this plan meets with the approval in principle of the Peruvian Government and if it will authorize Metals Reserve to send a representative immediately to Lima to negotiate the agreement in collaboration with the Embassy.

Hull
  1. Not printed.
  2. Approved March 11, 1941; 55 Stat. 31.
  3. Vol. vi, p. 151.
  4. A subsidiary of the Reconstruction Finance Corporation.