811.51/5132: Telegram

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

1149. Your 1529, September 22, midnight, your 1418, September 2, 6 p.m., and your 1438, September 5, 10 a.m.6

The Department agrees that some exemption is necessary whereby travelers from the United States to Chile may promptly convert a small amount of dollars into local currency. Accordingly, Treasury is prepared to release for free use in the United States small amounts (not in excess of $250 to each traveler from the United States to Chile) purchased by the Central Bank. It would be preferable if the amount of such exemption could be established administratively and would be flexible instead of by decree and if the amount could be lowered to $100. Similarly, the exemption for travelers from Chile to the United States should be lowered. For your information only, it is expected that the present exemption of $250 which may be brought into the United States will soon be lowered. With respect to currency brought by travelers from the United States to Chile, Treasury would expect that the Central Bank would purchase only the amount exempted, specifying to Treasury the name of the traveler, the date and amount purchased, and that any excess over the exemption would be impounded and sent to the United States on a collection basis.
The proposal for excluding Proclaimed List nationals from the benefit of the above-described exemption is approved on the assumption [Page 138] that it may contribute to the recognition of the Proclaimed List by the Chilean Government.
It is believed that a termination date for presenting currency to the Central Bank should be specified in the decree or by some other law and that only a few days should be allowed for such presentation in order to prevent currency movements from other countries into Chile. You may inform the Central Bank that Treasury will consider the failure to deposit currency within the time prescribed by Chilean law as a ground for denying the application for the release of such currency, in the absence of extenuating circumstances. However, it should be made crystal clear that Treasury makes no commitment whatever as to the treatment of currency before such date.

You should request the appropriate Chilean officials to make certain that all currency sent to the United States on a collection basis is consigned to the Federal Reserve Bank of New York, is fully documented, and is accompanied by appropriate instructions from the Central Bank.

The Chilean decree seems to be generally satisfactory but it is obvious that strict administration will be necessary and it should be made clear to the Chilean Government that the reaction of this Government to the decree will depend upon its administration.

  1. Telegrams Nos. 1529 and 1438 not printed.