811.20 (D) E.D.B./854

The Ambassador in Argentina (Armour) to the Secretary of State

No. 4377

Sir: I have the honor to advise that recent increases in Argentine copper imports from Chile give rise to the problem of how it would be possible to maintain a satisfactory control to the end that this material does not reach, directly or indirectly, the hands of processing or other firms on the United States Proclaimed List. We are advised, for example, that the South American Mining Company, which we understand is controlled by Mauricio Hochschild, now has orders pending for shipment from Chile during the month of March for a total of 212 tons for the Argentine Ministry of War and 150 tons for the Ministry of Marine. It is understood that all Chilean copper sales to this market are now handled through Anaconda directly by Copper Export Association, Inc., 25 Broadway, New York, and that Mr. William E. Kennedy, Vice President, is in charge of the business. The Embassy at Santiago has been requested to look into the matter and see if these and any other shipments now pending can be delayed until approved by the Board of Economic Warfare. This Embassy is convinced that some control such as this is necessary, if the United States Proclaimed List is to be in any way made effective in the Argentine. All evidence available indicates that the Argentine Ministry of War and probably the Ministry of Marine will deliver a goodly part of the raw copper they receive to the local firm Sociedad Electro Metalúrgico Argentina (Sema), which is now on the Proclaimed List.

As the local office of the South American Mining Company have repeatedly asserted their desire to cooperate in every way, and as the only other copper producers in Chile are American companies, it should be a relatively easy matter to obtain a full control of the Chilean copper exports and thus ascertain the degree to which Argentina must depend upon the United States for its copper import requirements.

The matter is one of immediate concern and full advice as to any action that the Department may take would be greatly appreciated.

Respectfully yours,

For the Ambassador:
Thomas L. Hughes

Commercial Attaché