811.20 Defense (M) Chile/165: Telegram

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

681. The American copper companies are worried over the ever increasing demand for raw copper from Chilean concerns able to purchase it at artificially low peso price and export it to Argentina at a premium price. The chief offender is the Chilean army workshops which applies a little fabrication (thick sheets) and extorts a large middleman’s profit from export to Argentina which possibly through established channels is already receiving its minimum requirements.

The copper companies are required by law to supply Chilean needs and although these purchases are obviously for export to Argentina, are not happy about refusing Chilean enterprises because of the political pressure and feeling the latter can arouse.

I request authorization to write the following letter to the American copper companies which they can use to brake excessive demands for copper for Argentina.

“It has come to the attention of the Embassy that you are being asked to supply steadily increasing demands for copper for export to [Page 54] markets which the Embassy is informed have sufficient stocks for minimum requirements. In view of the fact that for United Nations war requirements the United States is purchasing all of your production not required for Chilean use or minimum needs of the other American Republics, and in view of the priorities given your company for materials needed in copper production and the concessions made by the United States in the Metals Reserve contract, the Embassy would appreciate being consulted before you satisfy new orders for copper not needed for Chilean use, so that if necessary it can discuss the matter with the appropriate Chilean authorities.”

We have asked the Buenos Aires Embassy to verify rumors that Argentina has more than sufficient stocks on hand at the present time. Mark Lamb, representing the New York Steel Exchange, Argentina, is now endeavoring to make a deal with the army workshops for copper, most of which will receive only a minimum of fabrication: “claiming that he has the approval of the American Embassy at Buenos Aires for the exclusive representation of copper exports from the army workshops to Argentina which is already well supplied by sales agencies.[”]

Repeated to Buenos Aires.