825.24/573

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

No. 4033

Sir: In continuation of my despatch No. 3909 of July 16, 1942,27 I have the honor to report that Dr. Rafael Torres, Legal Adviser of the Chilean Ministry of Commerce, has informally suggested that it would be advisable for the Embassy to discuss with the head of the Comisariato de Subsistencias y Precios the possibility of forcing blacklisted firms to disgorge their hoarded stocks. Dr. Torres remarked that there were undoubtedly a number of undesirable firms, particularly in the iron and steel trade, that had large accumulations of merchandise obtained by devious methods from the United States, which were only available to consumers at excessive prices. In his opinion, iron and steel products and perhaps industrial chemicals should be declared articles of prime necessity by the Comisariato, and excessive stocks of these goods should be requisitioned with fair compensation to the owners, such stocks to be pooled and redistributed. Dr. Torres was also of the opinion that the Chilean Ministry of Commerce would not object to any arrangement that might be worked out to force excessive merchandise holdings of blacklisted firms into consumer channels. He added, and this is the most interesting point of all, that he personally believed steps should be taken at an early date to accomplish this objective as otherwise the United States would be fully justified in withholding certain exports to Chile on the ground that hoarded stocks in the country should be utilized before further supplies are made available. It is understood that Dr. Torres has also discussed this matter with Señor Guillermo del Pedregal, Vice President of the Corporatión de Fomento, who expressed himself as being in substantial agreement with the view of Dr. Torres.

It is the opinion of this Embassy that the problem of hoarded stocks is most acute in iron and steel, and in industrial chemicals. The Embassy will take up this problem with the Comisariato de Subsistencias y Precios.

Respectfully yours,

Claude G. Bowers
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