825.85/206: Telegram

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

1341. Regarding sale of CSAV motor vessels by [to] USA. Last night the Chilean Senate passed a resolution which reads in translation as follows:

“Whereas: The international position adopted by the country obliges it to contribute, even at the cost of sacrifices, to the war effort of the United Nations and the defense of the hemisphere.

The general interest of the state should also be guarded.

The Senate resolves, absolving the consultation of the President, to declare that it considers convenient the transfer of the motor vessels of the CSAV to the Government of the United States of America providing that in authorizing the alienation the following basic conditions are fulfilled, (1) the substitution, as soon as possible, during the war, of the transport capacity of the motor vehicles transferred; (2) to guarantee that, once the armed conflict in Europe ends, the total yield from the sale shall be destined to the acquisition of new vessels, $6,000,000 should be converted into its equivalent to gold bars, which shall be deposited in the Central Bank of Chile; (3) the obligation of the CSAV will include, in the acquisition of new vessels, consideration not only of the foreign trade needs of the country but also cabotage and national defense needs. Within these objectives it should be stipulated that the new vessels will be provided with refrigerating chambers of capacity not less than at present and advice should be obtained as to their adaptability as auxiliary cruisers of the navy, setting aside for this purpose an expenditure not less than 6% of the cost of each unit.

There is also recommended to the President that he obtain from the CSAV acceptance of the following obligations: (a) to destine also its present reserve funds for the future acquisition of transporting equipment; and (b) to obligate itself to purchasing during the war any of the rented vessels which may be lost.”

[Page 884]

Officials of CSAV expect to be consulted by the Minister Del Pedregal88 today. They raise the question whether the United States will permit the sale of gold bars to a private agency such as CSAV for shipment outside the United States.

Voting on resolution reveals that suspicions of patriotism of Vial exist in both left and right which accounts for efforts to tie up funds received from sale.89

  1. Chilean Minister of Finance.
  2. By Decrees Nos. 582 and 583, July 30, 1943, the CSAV was authorized to sell the ships and to reach an agreement with the Chilean Government as to the destination of the funds obtained from the sale.