811.20 Defense (M) Brazil/1908: Telegram
The Secretary of State to the Ambassador in Brazil (Caffery)
3672. Embassy’s 4784, November 16. Chile’s stocks crude rubber recently estimated 400 to 500 tons. Pre-war normal consumption was approximately 400 tons per year including many nonessential items production of which is no longer permitted in this country and is discouraged in Brazil. It is estimated here that Chile’s requirements crude rubber for essentials do not exceed 200 tons per year including 35 tons for retreading. Chile is not to receive machinery from this [Page 724] country for manufacture of tires. Department is telegraphing Santiago to check Washington’s requirement estimates and details of Chile’s recent imports. This information will be telegraphed to you. In any case, it would be deplorable were Chile to receive additional 600 tons from Brazil, an excess which no doubt would be re-exported to Argentina as evidenced by a pending transaction in which Corporación de Fomento, Chile, is to supply crude rubber to Pirelli,98 Argentina and receive a return of 50 percent by weight in bicycle tires. Assurance to supply Chile’s essential requirements conveyed to Chile in Department’s circular telegram of May 18,99 and reiterated in Department’s telegram to our Embassy which announced third quarter emergency allocation available from Brazil, stating that orders placed under this allocation would supersede orders previously placed in Brazil. An attempt will be made to reach an understanding with Chilean authorities regarding Chile’s rubber requirements and use this understanding as basis for future allocations.
You have Department’s assurance that this government at no time approved sale of rubber by Brazil to Chile except to fulfill Chile’s essential wartime requirements under the usual allocation procedure.