811.20 (D) E.D.B./1535: Telegram

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

922. Your 1314, August 14 [17].79 You are authorized to proceed on the basis outlined in your 1241, July 31. Anaconda people here advise that they have been informed Chilean Government wishes to purchase amounts available for export to other American republics (other than this country) and sell them directly. This approach is obviously attractive to the Chilean authorities, since it gives them an opportunity for a profit and also gives them basis for bartering for scarce materials from the other countries. While it would be greatly preferable to eliminate this transaction, you are authorized to consent to such an arrangement if necessary for an agreement. In the event Chile seeks an excessive price from the other republics, matter could be called to attention of proper Chilean authorities asking that reasonable price be maintained.

It is important that you continue to stress the serious shortage of copper and the urgent need of keeping to the absolute minimum both Chilean consumption and exports to the other republics; diversion from direct war effort would be impossible to justify.

The Embassies at Rio de Janeiro and Buenos Aires have been told the current rate of exports from Chile to Brazil and Argentina and asked whether such amounts are necessary for indispensable needs. You will be advised of replies. It is believed here that any more careful study could not be completed in time to present an early settlement of this important problem.

Metals Reserve suggests that Graham participate in these discussions so that it may be fully informed upon his arrival, and that you may find Miller helpful in that connection after Graham’s departure.

  1. Not printed.