811.20 (D) E.D.B./1840: Telegram

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

1609. In the absence of instructions requested in Embassy’s telegram 1441, September 14 [5], no progress has been made towards solving copper problem. Meanwhile Minister of Commerce states that Kemnitzer87 is the expert promised by Lova and that he is awaiting the latter’s arrival before beginning discussions. As Anaconda is continually under pressure to accept orders from new firm an understanding must be reached as quickly as possible. Telegraph urgently when Kemnitzer will arrive, whether the Department expects him to handle copper problem and whether he has received definite instructions.

It would be difficult to deny Chile enough of its own copper to cover its domestic consumption of about 3,000 tons, plus whatever part of Argentina’s and Brazil’s import requirements, estimated at 10,000 and 11,000 tons respectively of copper metal, she may be able to sell them in fabricated form. The latter quantity cannot be determined in advance. When Chilean fabricators requests copper the Government naturally assumes they have a market for their products. It uses the argument that no increase in total consumption will result if exports of copper metal are reduced by a quantity corresponding to exports of fabricated copper.

Under the circumstances, it seems evident that any limitation on deliveries of copper for fabrication in Chile would have to be made arbitrarily. Embassy believes that it would be wise not to agree to any delivery schedule for more than 3 months for which period present figures of 1500 tons per month might be continued if it should be impossible to obtain agreement on a lower amount. If Chilean fabricators buy more than they are able to sell profitably they will, presumably, not continue their purchases. More effective control over the ultimate destination of copper sold for export appears more important than any limitation on quantity which could be obtained. This aspect will of course be stressed in our discussions.

In making the above suggestion account has been taken of the fact that we cannot push too hard without risking new legislation which would definitely obligate the American producers to supply whatever quantity local industries require either for domestic consumption or for export in fabricated form.

The Department’s views are requested.

  1. Presumably William J. Kemnitzer of the Board of Economic Warfare.