825.24/985
The Secretary of State to the Ambassador in Chile (Bowers)
Sir: I refer to the Embassy’s airgram no. 530 dated April 17, 1943, despatch no. 6287 dated April 21, 19436 and telegram no. 754, April 26, 1943, 10 a.m., all concerning the pending Chilean copper agreement.
The Embassy in its airgram no. 530 under reference, stated that the Ministry of Economy and Commerce has put forth the suggestions contained therein to form the basis of an agreement between the Chilean government and the government of the United States for the purpose of supplying to the other American republics their essential requirements, and to control the traffic in copper, i.e. refinery shapes and manufactured forms, brass, bronze and copper sulphate.
Of the suggestions set forth in the paragraph, numbered 1., reference is made only to “refined and elaborated copper as well as that of bronze and brass.” The Department wishes to make it clear that the suggested tonnage quotas in its airgram no. 696 dated April 8, 1943, 7 p.m. include all forms of copper and brass, (refinery shapes, manufactures and copper sulphate), and makes the recommendation that it would be more consistent to have this proposed agreement cover all these products similarly to the Chilean copper decree designated as no. 64 bis, Santiago, dated February 3, 1943. It is the Department’s suggestion that the quotas to be agreed upon shall be separately designated as to type, shapes and descriptions.
With reference to paragraph numbered 2., the Department wishes to point out that allotments established for the other American republics are controlled as to amounts by each country’s essential requirements. It would appear that the type of manufactured copper, brass and bronze which the Chilean industries produce would be the determining factor as to whether or not the South American markets can be supplied from Chile.
With reference to paragraph numbered 3., it may be stated confidentially for the Embassy’s background that exports from the United States to the other American republics in 1942 of copper, brass and bronze, but not including copper sulphate, were a little less than 12,000 short tons.
With reference to paragraph numbered 4., the existing agreement between Chile and the Chile Exploration Company which requires a permit for the exportation of refinery shapes to the other South American countries, does not appear to conflict with the proposed plan.
[Page 842]Because the Undersecretary of Economy and Commerce did not think there would be any objection to control by the United States of exports from Chile of refinery shapes made by companies organized in the United States, the Department so informed the Board of Economic Warfare and it is now in the process of establishing controls over such sales.
With reference to paragraphs numbered 5. and 6., the agencies of the United States Government establishing the controls for exports have had considerable experience in the implementation of such plans. It is believed that the details can be worked out for carrying this agreement into effect under the present decentralized plan “A”7 which would simplify both the work of the Chilean government and the United States government. Of course, the final approval of any such plan will rest with Chile.
Mr. Allyn C. Donaldson8 of the Department will leave shortly from Washington to consult with the Embassy in this matter and to make readily available to the Embassy the developments and plans which the interested agencies in Washington have in mind.
The question raised by the Embassy in its despatch no. 6287 under reference, of finding a market for Chile’s exportable surplus of copper, brass and bronze manufactures, will to a major extent depend upon the ability of the Chilean copper trade to adapt itself to the requirements of the present markets and prices, and to its ability to make deliveries.
Very truly yours,