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

No. 1503

The Secretary of State refers to the Embassy’s interesting despatch of April 27, 194221 concerning the procedure being established in Chile with regard to the problem of allocated commodities and the issuance of certificates of necessity, and is gratified to note the apparent satisfactory degree of cooperation existing between the mission and the control agencies of the Chilean Government.

[Page 88]

With regard to the several questions raised by the Embassy, the Department regrets that it can only answer in part. The fact is that the production and control agencies in Washington are still in the throes of evolving a procedure which, it is hoped, can be broad in principle but yet flexible enough to take care of the infinite number of special problems, many of which are of an emergency nature related to the war. It can be stated at this time that broad procedural policies have finally developed to the point where, within a short time, the Department hopes to be able to summarize the procedure in an informative instruction which will bring the missions up to date with the current stage of development.

In specific reply to certain questions (paragraphs 3 and 4 on pages 3 and 4 of the despatch under reference) the Embassy is informed that plans are now developing to separate the iron and steel requirements of certain large mining industries producing for the war effort and it is probable that future announcements of quarterly allocations of iron and steel requirements will show the country’s estimated requirements apart from the requirements of such industries. As for the breakdown of the iron and steel allocations into types of material, the Embassy will recognize that this was done in the second quarter allocations.

The Office of Export22 is now following a general policy of recognizing all applications covered by certificates of necessity provided, of course, that (1) there is no evidence of cloaking, (2) the amounts requested are reasonable and within the allocation, (3) discrimination is not apparent, and (4) the use stated is clearly shown and is permissible under limitation orders in the United States. If administratively possible (the Office of Exports is handling 8,000 applications per day) it is hoped eventually to give specific reasons in each case where a certificate of necessity is rejected.

The Embassy will also appreciate that the shipping situation has become so difficult that it is seriously affecting the whole export problem, including allocated commodities.23 The congestion at ports and railway terminals of goods awaiting ocean bottoms has reached the point where it is necessary to reject export licenses for all but goods of the most essential nature. While Chile is perhaps in a more favored position than others of the republics as regards shipping, the problem is only relatively less grave.

  1. Despatch No. 3124, not printed.
  2. Of the Board of Economic Warfare.
  3. For correspondence on the shipping problem, see pp. 95 ff.