740.00112A European War, 1939/12390: Telegram

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

927. In conversation yesterday Del Pedregal now President of the Fomento Corporation77 said to MacLean78 and Heath79 that he had just been advised by Fomento’s representation in New York that the United States Government was disposed to assist in Chilean acquisition of Proclaimed List firms provided funds could be blocked. Del Pedregal said that the Fomento Corporation was very anxious to take over Osram80 and Sociedad Lanera81 on a straight and uncoerced purchase but under Chilean law had no way to block funds; secondly, he said the sellers were afraid to receive blocked funds; fearing Chile’s later entrance into the war and a resultant partial or total loss of such blocked funds. He asked for an argument or methods with which to overcome the sellers’ reluctance. He said the Fomento Corporation had been given some thought instead of purchasing these firms to renting them or to acquiring them on a long term combined rental purchase plan.

We learn that Grace and Company has been approached by Fomento to take over the management of Osram and that Raúl Simón82 is leaving shortly for Washington to talk the matter over with the Department and other interested authorities.

The Department’s observations and instructions would be appreciated.

  1. The Chilean Development Corporation.
  2. H. Coit MacLean, Commercial Attaché.
  3. Donald R. Heath, Counselor of Embassy.
  4. Fábrica de Ampolletas Eléctricas, Ltda., a branch of a German firm that used Proclaimed List dealers as outlets.
  5. A Proclaimed List firm dealing in wool, controlled by the German Vorwerk and Company.
  6. General manager in Chile of Grace and Company.