811.51/5836: Airgram

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

A–160. My despatch No. 5116, December 3, 1942, Department’s telegram No. 1551, December 30, 1942, 4 p.m.,94 and Department’s Instruction, No. 2617, January 16, 1943.

On receipt of telegram No. 1551, Mr. Franki, Chief of the Special (Controls) Section of my Economic Division immediately contacted the National City Bank, Santiago, and advised it that the Treasury Department agreed in principle to the suggested arrangement (my despatch No. 5116) whereby said bank would handle the purchase and sale of $50 which travelers between the United States and Chile are permitted to have in their possession under Chilean Decrees Nos. 4021 and 3192. At that time the Bank’s suggestions as to the provisions of a proposed regulation to be dictated by the Consejo Nacional de Comercio Exterior were also considered. Thereafter the proposed regulation was discussed with Sr. Luis Felipe Letelier, Attorney for the Consejo, who in turn discussed same with appropriate officials of [Page 886] the Banco Central. The whole problem was taken under advisement by the Consejo and on January 26, Sr. Letelier after further discussions with Mr. Franki submitted a proposed regulation representing the combined views of the Consejo and the Banco Central. The pertinent provisions of the proposed regulation are as follows:

The Consejo Nacional de Comercio Exterior decrees:

That the National City Bank be authorized, through its subsidiaries in the country, to buy from and sell to persons traveling between Chile and the United States, up to the sum of $50, which such passengers may buy and sell freely;
The Bank shall demand in advance from the purchaser that he exhibit the documents which evidence his immediate departure from the country and from the seller the documents which verify whence he came;
The National City Bank shall have the authority, moreover, to send the bills which it purchases to the United States without the necessity for a special permit each time, it having the right to transmit such bills by plane, as well as by other means;
The National City Bank shall declare monthly to the Banco Central de Chile and the Consejo Nacional de Comercio Exterior the bills which, in conformity with the present regulation, it has purchased and sold between the first and the last day of each month;
The rate of exchange at which the National City Bank shall make its purchases and sales, shall be that which the Directors of the Banco Central de Chile shall fix as the dollar “D. P.” rate (Disponibilidades Propias—private funds not arising from export-import transactions), with the approval of the President of the Republic; in accordance with Article 30 of Law 7200.
In handling purchases as well as sales, the National City Bank may charge a commission not exceeding ¼ of 1%.

The Manager of the National City Bank after examining the above and discussing same with Mr. Franki states that the proposed regulation appears satisfactory provided a clause is added requiring the Consejo to give the National City Bank reasonable notice of termination and stipulating that upon notice of termination, the regulation will be continued in force for such time as is necessary to enable said Bank to dispose of any dollar notes it may have acquired pursuant thereto. The Embassy sees no objection to this additional clause.

The National City Bank also desires that the Banco Central be committed to purchase from it any dollar notes which the National City Bank is not able to dispose of by sale to travelers departing from Chile en route to the U. S. or by transmission to the United States. Both the Consejo and the Banco Central believe there is no legal authority for including such provision in the regulation to be dictated by the Consejo. However Sr. Letelier states that there will probably be no objection to an informal arrangement in this respect, perhaps evidenced by exchanges of correspondence between the National [Page 887] City Bank and the Banco Central. This point will be discussed with the Banco Central at the first opportunity.

The proposed regulation perhaps with the exception of slight verbal modifications and the addition of a phrase to clause authorizing the National City Bank to demand any other pertinent information of purchasers and sellers of dollar notes, appears satisfactory to my staff. Please instruct by telegraph whether the above proposed regulation and the suggested modifications are approved.

The National City Bank desires to know what meaning the Treasury will attach to the term “provided appropriate information is submitted regarding its origin” (Instruction No. 2617). I suggest that the Treasury briefly outline the information it desires and that same be transmitted to the Embassy as soon as possible by telegram. This should be given prompt attention as persons are arriving here daily with small amounts of U. S. currency.

  1. Neither printed.