825.24/1268
The Ambassador in Chile ( Bowers ) to the Secretary of State
[Received August 11.]
Sir: I have the honor to enclose for the Department’s information and consideration schedules15 indicating (1) copper manufactures exportations from Chile to Argentina which were approved by the National Foreign Trade Council (Consejo National de Comercio Exterior) during the period January 1, 1943 to April 6, 1943; (2) copper manufactures exportations from Chile to Argentina which were approved by the National Foreign Trade Council and the Embassy during the period April 6, 1943 to July 28, 1943, and (3) proposed copper manufactures exportations from Chile to Argentina which were rejected by the Embassy during the period April 6, 1943 to July 28, 1943.
It will be noted from the attached schedules that copper manufactures totaling 1,882.7 metric tons have been approved to date in 1943 by the Chilean Government for exportation to Argentina. Of this quantity, 1,174.8 metric tons were authorized by the Chilean authorities prior to April 6, 1943, the effective date of the agreement reached by the Embassy with the Chilean Government16 under the terms of which all applications for license to export copper manufactures from Chile to American Republics other than the United States must be submitted to the Embassy for its review and consideration before being approved or rejected by the appropriate Chilean authorities. From April 6, 1943 to date, a slightly longer period, the National Foreign Trade Council has authorized, with the prior approval of the Embassy, but 707.9 metric tons of copper manufactures for exportation. It will be noted that included within this latter datum of 707.9 metric tons are 200.0 metric tons representing shipments authorized under the current contract between the Chilean Army Workshops (Fabrica de Material de Guerra del Ejercito) and the Argentine Army Workshops (Direction General de Fabricaciones Militares del Ejercito Argentino). Applications covering these 200.0 metric tons were returned by the Embassy to the National Foreign Trade Council with the observation that, while it appears that this copper is for building up the stocks of the Directión General de Fabricaciones Militares del Ejercito Argentino for future needs and [Page 850] that it is not of immediate necessity, in view of the nature of the consignor and consignee, the Embassy does not feel it is in a position to comment officially on these applications which apparently cover future military needs of Argentina. The Embassy has now arranged orally with the Chilean Army Workshops that future shipments will be made at the rate of 150 tons a month, which is the minimum figure of the contract.
Thus, the Embassy believes that the control measures which were inaugurated as of April 6, 1943, are proving effective in that, excluding that which has been noted as having been authorized by the National Foreign Trade Council for shipment by the Chilean Army Workshops to the Argentine Army Workshops, only 507.9 metric tons of copper manufactures were approved by the Embassy during the second four months of 1943 for shipment to Argentina as compared with 1,174.8 metric tons authorized by the National Foreign Trade Council, without review by the Embassy, during the first three months of 1943.
However, it is still to be regretted that such large quantities of copper manufactures have been licensed to date during 1943 for exportation to Argentina. In this connection, the Embassy is in accord with the information set forth in the confidential memorandum enclosed with the Department’s confidential instruction No. 3199 of July 2, 1943.17 In addition, while in Santiago, Mr. Allyn C. Donaldson (EE) informed the Embassy that it was his understanding that the United States is short 400,000 metric tons of copper urgently required for the war effort. In this connection, it is disturbing that Argentina continues to press for still further shipments of copper, apparently quite beyond the requirements estimated by the American Embassy there. While it is recognized that a practical point of view must be adopted by this Embassy and that certain proposed shipments of copper manufactures to Argentina will appear to be justified on the surface and on the basis of the individual hardships which would be involved were the shipments to be denied, it is this Embassy’s belief that copper shipments to Argentina should be withheld, for the moment, in every possible instance. This would appear to be justified by the Buenos Aires Embassy’s statement that “The result…18 is that Argentina has already received more copper than this Embassy recommended for the entire year of 1943.” (See aforementioned confidential memorandum enclosed with the Department’s confidential instruction No. 3199 of July 2, 1943, page 1.) Hoarded stocks of copper should be forced into the open market in Argentina [Page 851] in order that more copper may be made available for the United Nations’ war efforts. Such an opinion was voiced by Mr. Allyn C. Donaldson at the time he was in Santiago and the Embassy therefore has reason to believe that it reflects the opinion of the Department.
In addition, the Embassy has reason to believe that considerable quantities of copper, both manufactures and refinery shapes, continue to leak into Argentina as contraband and without prior authorization of either this Embassy or the National Foreign Trade Council. This, coupled with the fact that local representatives of the Office of Economic Warfare report that the Chilean “small” copper mining industry’s output of raw copper is steadily declining, only serve to accentuate the seriousness of the problem at hand.
It is realized that in some cases, the Embassy in Buenos Aires may have sufficient reason to recommend additional shipments of copper but it is the intention of this Embassy to be guided by the quarterly estimates in the future, except for actual military needs. This is in accord with the spirit of the agreement about to be reached with the Chilean Government.
Respectfully yours,
- Not printed.↩
- Agreement (not printed) outlined in note No. 13, March 6, 1943, addressed by the Chilean Under Secretary of Economy and Commerce to the American Counselor for Economic Affairs and attached to despatch No. 5944, March 10, from the Ambassador in Chile, p. 832.↩
- Neither printed.↩
- Omission indicated in the original despatch.↩