811.20 (D) Regulations/2658: Telegram

The Secretary of State to the Chargé in Peru (McGurk)

130. Reference Legation’s 215 of June 7. The following is drawn up after discussion with Ambassador Norweb.52

The Department welcomes the growing readiness of the Peruvian Government to take effective action in regard to the control of exports. It believes it advisable that, in the matter of timing action, a distinction be borne in mind between the two following groups of commodities:

As regards products imported from the United States, and similar products that might be substituted therefor, immediate action is greatly to be desired. This will both assure Peru of supplies and facilitate our own decision in granting licenses for export to Peru.
As regards commodities produced in Brazil [Peru?] which are included in our list of critical and strategic materials and which we wish to procure by purchase from Peru, it is our judgment that the action imposing an embargo upon the export thereof should be timed to coincide with arrangements now under discussion for American purchases of such commodities. These arrangements will be calculated to afford a good and a steady market for these Peruvian products [Page 529] and thereby prevent such a fall in prices as might cause criticism and resistance.

To this end, the Federal Loan Agency is now negotiating with the Cerro de Pasco and Grace Companies for the purpose of appointing these companies as agents of the Federal Loan Agency to buy such of the tungsten ore, vanadium, lead ore, copper ore, zinc ore, bismuth, and antimony which is exported from Peru by companies other than the Cerro de Pasco, the Northern Peru Mining and Smelting Company, and the Vanadium Corporation and is not bought by the United States domestic trade. It is expected that the arrangements with the Cerro de Pasco and Grace Companies will be completed in the near future and it is suggested that it would be a much more satisfactory arrangement to have the export embargo imposed only after notification to you that the contract between the Federal Loan Agency and Cerro de Pasco and Grace Companies has been executed and the latter are prepared to enter the market to buy the embargoed products. It is suggested that you discuss this matter and advise the Finance Minister of this suggestion, the principal purpose of which is of course to prevent embarrassment to him.

The products which should be embargoed are those which are mentioned above.

With respect to the suggestion in your 215, statistics of the Department of Commerce show that exports of iron and steel products to Peru have been large in the past and are continuing at a substantial rate. The 1937–1939 average of shipments of iron and steel products to Peru was 28,303 metric tons. 1940 shipments to Peru were 43,197 tons and January–February 1941 shipments total 4,788 tons. These shipments to Peru compare favorably with the shipments to the other Latin American countries. They include a large number of products such as bars, plates, sheets, strip, tin plates, structural steel, rails, pipe, wire and rods, castings and forgings.

  1. Ambassador Norweb left Peru on June 7 for the United States and returned to Peru about July 1.