811.20 Defense (M) Chile/102
The Ambassador in Chile (Bowers) to
the Secretary of State
No. 2536
Santiago, February 4,
1942.
[Received February 9.]
Sir: With reference to the Embassy’s telegram
No. 94 of January 17, 1942,68 I have the honor to transmit herewith copies of notes
exchanged on January 26, 1942 between the Embassy and the Foreign Office
of Chile effecting the Agreement for the Purchase of Strategic Materials
in Chile by the Metals Reserve Company, together with copies of Exhibit
“A” in which there are specified the terms applicable to all purchases
as well as the quantities, grades, prices and delivery conditions for
each of the materials.
Respectfully yours,
For the Ambassador:
Donald R. Heath
First Secretary of Embassy
[Enclosure 1]
The American Ambassador (Bowers) to the Chilean Acting Minister for Foreign
Affairs (Pedregal)
No. 861
Santiago, January 26,
1942.
Excellency: I have the honor to inform
Your Excellency that my Government agrees to the provisions of your
note of this date, repeated
[Page 49]
below, and considers the Agreement completed by the exchange of
these notes.
- 1.
- The Government of the Republic of Chile undertakes, through
the issuance of export licenses and other adequate control
regulations effective immediately, to restrict exportation of
the strategic materials listed in Exhibit A attached
hereto,69 for a period of
eighteen months from the date hereof, except to (1) Metals
Reserve Company or other corporation or Agency designated by the
Federal Loan Agency; (2) United States purchasers; (3) the
British Empire; (4) in cases where the United States or the
United Kingdom have made purchases on behalf of a third party,
such designations for direct shipment as shall be nominated by
the United States or the United Kingdom, as the case may be; and
(5) the other American Republics which have systems of export
control acceptable to the Government of the United States;
unless in any case a different provision for export control is
set forth in Exhibit A.
- 2.
- While the Chilean export control system, referred to in
paragraph numbered 1 above, operates effectively, the Government
of the United States confirms that the Federal Loan Agency of
the Government of the United States, acting through the Metals
Reserve Company or another Agency designated by it, agrees to
purchase for a period of eighteen months from such sources
approved by the Federal Loan Agency, the maximum quantities of
each material as listed in Exhibit A hereof, less sales made
through commercial channels or otherwise to the eligible
countries referred to in paragraph numbered 1 above. The terms
of purchase of each material by the designated Agency of the
Federal Loan Agency are set forth in Exhibit A hereof. Without
in any way limiting or affecting the prices at which a
particular seller may sell Chilean material through commercial
channels or otherwise to eligible countries, the Federal Loan
Agency, acting through its designated Agency, agrees that its
purchases during the period of this Agreement shall be at the
prices listed in Exhibit A, with the understanding that these
listed prices will be reviewed each six months.
- 3.
- The Government of Chile agrees that any increases in export
taxes or fees that may be enacted or enforced between the time
of purchase by the designated Agency of the Federal Loan Agency
and the date of shipment of the material, will not apply to the
materials purchased by the designated Agency or the Federal Loan
Agency.
- 4.
- The Federal Loan Agency, for the purpose of performing its
commitment hereunder, has appointed Mr. H. R. Graham, its
Authorized
[Page 50]
Representative in Chile, who has accepted the Agreement on
behalf of the Federal Loan Agency by signing at the end
hereof.
Accept [etc.]
Accepted:
Federal Loan Agency
[
H. R. Graham
]
Authorized Representative
[Enclosure 2—Translation]
The Chilean Acting Minister for Foreign
Affairs (Pedregal) to the American
Ambassador (Bowers)
No. 4
Santiago, January 29,
1942.
Mr. Ambassador: With reference to our
letters of this date70 relating
to the purchase of Chilean products by the Federal Loan Agency, I
have the honor to confirm to Your Excellency the agreement which we
have reached with respect to the periodical revision of the prices
stipulated in paragraph 2 of said letters:
- (1)
- The prices, tonnage and terms of purchase established in
Document “A” shall be revised by common accord at the end of
each period of six months counted from this date.
- To make this revision and the respective adjustments,
there will be taken especially into account the variation in
the prices of the materials in the world market, the value
of the dollar, fluctuations in Chilean exchange and
increases in salaries, wages, materials and freights and
loading expenses which affect the cost of production in
Chile.
- (2)
- In the execution and fulfillment of this contract and to
settle the difficulties which may arise, the Caja de Crédito
Minero will act as the representative of the Government of
Chile. This official institution will authorize the present
buying firms in order that they may continue making their
purchases under the same conditions as they did before the
war.
- (3)
- Mr. Cesar Fuenzalida, Director of the Caja de Crédito
Minero, signs at the end hereof to attest that said
institution accepts the foregoing conditions. In like
manner, Mr. Horace R. Graham will also sign at the end of
Your Excellency’s reply to attest that the Federal Loan
Agency accepts said conditions.
I take [etc.]
Guillermo del Pedregal
(signed)
Cesar Fuenzalida C.
