840.51 Frozen Credits/9695

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

No. 5868

Sir: I have the honor to refer to my confidential despatch No. 5745 of February 13, 1943, transmitting to the Department a copy of my [Page 895] Note Verbale dated February 10, 194311 to the Minister for Foreign Affairs in regard to the Banco Alemán Transatlantico in Chile.

I enclose herewith a copy and translation into English of a Note Verbale dated February 22, 1943,12 which is a reply to my Note Verbale above mentioned. It is to be noted that the Minister for Foreign Affairs has requested the Minister of Finance to report on the activities of the Santiago branch of the bank in question.

In a conversation with Moisés Vargas V., Chief of the Commercial Policy Section of the Ministry for Foreign Affairs on February 25, Mr. Thayer and Mr. Franki of the Economic Division of the Embassy pointed out to Sr. Vargas that under the Chilean Banking Laws, the Superintendent of Banks had ample authority to investigate the Banco Aleman, to assume control of same and to deal effectively with it should the investigation disclose the same or similar facts contained in the report of the Uruguayan Congressional Committee with respect to the Banco Aleman in Montevideo. Señor Vargas said that the Superintendent of Banks had been requested, through the Ministry of Finance to report on the activities of the Banco Alemán in Santiago and pointed out that the facts found by the Uruguayan Congressional Committee related principally to activities engaged in by the Montevideo branch of this bank for the year 1941 and prior years. Apparently the question has arisen as to whether the Banco Aleman in Santiago should be dealt with on the basis of its present activities only without reference to its activities in the past. Mr. Thayer and Mr. Franki pointed out to Señor Vargas that the past conduct of the bank was certainly evidence of what it might now be doing, and that its present activities could only be judged in the light of the bank’s past history; and moreover, that the bank was unquestionably an enemy concern controlled by the parent institution in Germany.

For some time past the desirability and urgent necessity of blocking and liquidating the Banco Aleman Transatlantico has been called to the attention of the Chilean Government not only by this Embassy but by the British Embassy as well. This problem has been discussed from time to time with the Minister of Finance, the Minister of Economy and Commerce and his legal advisor, and also with members of the secret committee, which until a short time ago was studying the subject of economic and financial controls for Chile. The recent information from the Ministry for Foreign Affairs is the first indication that the Chilean Government may investigate the bank.

My staff will continue to press this particular problem as it has in the past, along with the whole problem of economic and financial controls, [Page 896] which is being constantly called to the attention of the Chilean Government.

Respectfully yours,

Claude G. Bowers
  1. Latter not printed.
  2. Not printed.