811.51/5068: Airgram

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

A–96. From several sources the Embassy has learned that many holders of American currency in Chile are unwilling to turn them over to the Central Bank because of a lack of assurance against loss. The form signed by the owner in surrendering currency (see enclosure No. 2 to my despatch No. 4131, August 8, 19423) specifically exempts the Central Bank from all responsibility including loss or damage in transit and although Secretary Dávila of the Central Bank denied rumor that shipments will not be insured (last paragraph my Airgram A–81 August 20, 4 [6:30] p.m.3), persons turning over currency are not being told of blanket coverage of such remittances under British insurance. In fact the attitude of some of the Bank’s employees meeting the public appears to be to discourage as far as possible the surrender of currency for collection. This is not surprising since the Central Bank from the start opposed the whole arrangement and is only concentrating and shipping American currency on Governmental orders.

If the whole program of control of American currency is not to be hampered in Chile the public in possession of American currency will have to be assured that they will be protected against loss during shipment. To force the issue I suggest that the Treasury Department offer to the Central Bank insurance covering all American currency shipped at as low a rate as possible. If such an offer is made whether accepted or not the Embassy could give wide publicity to the fact that owners of currency surrendered are protected against losses in transit.

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