Office of the Historian

811.51/4482: Telegram

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

Santiago, August 7, 1942—6 p.m.
[Received 9:11 p.m.]

1266. Department’s circular telegram dated June 19, 11 p.m.87 and previous. On August 3 I wrote the Foreign Minister requesting a reply to my notes regarding control of American currency and on August 5 he told me Chile would cooperate.

Today the Secretary of the Central Bank88 informed an officer of my staff that it had been instructed by the Finance Minister to accept American currency for collection and forwarding to the United States Treasury Department. The bank early next week intends to announce in the press that beginning August 17 (later for Punta Arenas) the Santiago and all branch offices will accept dollars for collection at the risk of the owners. Latter will have to submit signed statements giving personal data and information on origin of the currency. The bank lacks facilities for investigation but it will forward one of three types of certificates as follows.

1.
That it knows the owner and believes his statements are true.
2.
That it knows nothing of the owner or the validity of his statements.
3.
That it has reason to suspect the owner and to believe his currency has an Axis taint.

The bank would then forward currency collected to Treasury Department with certificate of owner and its own certificate covering each lot separately, the Treasury would advise the bank of all currency found without Axis taint and the bank would then reimburse the owner in pesos at D. P. rate or with a dollar draft. Tainted currency would be deposited in an account of the Central Bank to the credit of the owner to be released after the war.

The Secretary was not enthusiastic over the suggestion that the Embassy be provided with a copy of the certificate of each owner but agreed that a representative of the Embassy could examine such certificates especially when large amounts are involved.

He stated that the Central Bank has not the authority to prohibit imports and exports of trade in the country in dollar currency by [Page 130] private persons, and that any such action would have to be taken by the Chilean Government.

Please inform me urgently whether the procedure outlined is acceptable to the Treasury Department since the Secretary of the Central Bank has requested the opinion of the Embassy by Monday afternoon.

Bowers
  1. Not printed, but see vol. v, p. 798, footnote 52.↩
  2. Luis Dávila Echaurren.↩