840.51 Frozen Credits/11215

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

No. 7117

Sir: I have the honor to refer to my despatch No. 6017 of March 20, 1943,22 reporting the extension of Ministry of Finance Decree No. 736 of March 1, 1943.

It will be recalled that decree No. 736 required the registration within 15 days of all properties held by persons in Chile for the [Page 902] account of or in the name of persons and institutions in Axis and Axis-occupied countries, and provided that such properties be blocked while registration was in progress. Decree No. 736 was extended to April 10 by Ministry of Finance Decree No. 939 of March 17, 1943, which also authorized the Superintendent of Banks to make a further extension to April 30, 1943, if necessary. Extension beyond April 30 was effectuated by Ministry of Finance Decree No. 1,393, which carried the registration period forward to May 31, 1943. For the Department’s information there is enclosed a translation of Decree No. 1,393 of April 30, 1943.23

Unfortunately no extension was made upon the expiration of the last mentioned decree on May 31. The decrees were allowed to lapse although my economic advisors on several occasions prior to that date reminded Srs. Pablo Ramirez and Alfonso Fernandez, the personal representatives of the President in Proclaimed List and control matters, of the necessity for keeping the decrees in force, particularly the blocking provisions thereof, until such time as controls legislation were enacted, so that the assets registered under such decrees could thereafter be subjected to appropriate controls in accordance with the provisions of the Rio and Washington conferences, and although Srs. Ramirez and Fernandez received assurances from appropriate officials of the Chilean Government that the decrees were being kept in force and would be extended as often as necessary to accomplish the desired results. Subsequent information, however, revealed that the decrees had been allowed to lapse. This was presumably due to a misunderstanding of the purposes and objectives of the decrees by the office of the Superintendent of Banks and certain officials of the Ministry of Finance.

On June 23, immediately after I received this information, I called on the Minister for Foreign Affairs and transmitted to him the above information, expressing the hope that the Chilean Government would find appropriate and effective means to immediately immobilize the properties which had been released because of the expiration of the decrees in question, and suggesting that the officials charged with the administration of such measures as might be adopted would be fully informed of their objectives. I also informed the Minister that I understood the total value of the assets which had been registered to be in excess of 6 million pesos and pointed out that the Chilean Government should appreciate the fact that these huge funds, unless subjected to rigid control, were actually at the disposal of the Axis Governments for use against the United Nations not only in Chile but [Page 903] throughout the Western Hemisphere. As a result of this discussion a further extension to August 31, 1943 has been placed into effect. This was accomplished by Ministry of Finance Decree No. 2,255 of July 6, 1943, published in the Diario Oficial of July 17, 1943 and a translation of which is enclosed herewith.

In view of the fact that the office of the Superintendent of Banks apparently did not appreciate the full significance of these registration decrees, and since some of the registered assets were very likely transferred between May 31, the date when Decree No. 1,393 expired and July 6, the date of the recent extension, I again called on the Minister for Foreign Affairs and handed him my Aide-Mémoire of July 20, 1943 suggesting that the Chilean Government take appropriate action respecting the points mentioned. A copy of my Aide-Mémoire is enclosed. It is impossible to ascertain at this time whether a substantial portion of the registered assets were transferred when the decrees were allowed to lapse, but according to Srs. Fernandez and Ramirez the number of such transfers is not likely to be large. In any event Decree No. 2,255, the new decree, has the effect of again placing the previous decrees in force, and new registrations will doubtless be required in appropriate cases.

The attached tabulation which was procured in confidence by one of my economic advisers from an official of the Ministry of Finance indicates that the total declared value of the registered assets as of March 2, 1943 was 749,895,029.08 pesos or approximately 24,268,447.54 dollars. This is a surprisingly large sum, especially when it is considered that registration was incomplete at the time the tabulation was compiled and that the registrants probably under-estimated the value of the properties declared by them. It is to be noted that the tabulation lists residents of France as the owners of properties in Chile having the greatest value, i.e. $250,735,703.07 pesos. Residents of Germany own almost as much: $249,964,285.02 pesos. Residents of Italy are third in importance with properties having a declared value of $107,748,706.53 pesos. The principal assets in Chile belonging to persons and firms in enemy territory, according to these figures, consists of cash and deposits, amounting to $448,600,155.20 pesos or 14,517,804.37 dollars.

My staff will of course endeavor to secure such additional renewals and extensions of the registration decrees as may become necessary. As previously reported these decrees were placed into effect as preliminary measures, pending the adoption of controls legislation by the Congress, upon which appropriate administrative decrees dealing with the registered assets, would be based. However, it is feared that little can be done in this direction should the controls legislation as [Page 904] emasculated by the Chamber of Deputies be adopted by the Congress. (See my telegram No. 1320 of July 24, 1943, 3 p.m.),24

Thus far the above data is the only concrete information which my staff has been able to procure in regard to the properties which have been registered. Apparently the officials of the Chilean Government concerned with the administration of the registration decrees have been somewhat reluctant to divulge the data disclosed in the sworn statements which have been filed. A possible explanation is that these officials are reluctant to allow any one to examine the sworn statements themselves owing to their confidential nature; also they very probably have not had a sufficient opportunity to study in detail the information which has been filed, particularly since registration is still in progress, theoretically at least. It may be added that the office of the Superintendent of Banks is actively administered by Walter Lebus, Sub-Superintendent who is a German-born, German-educated Chilean, and to whom may be attributed in a large measure the lack of cooperation from that office. However, it is hoped that in the near future more up-to-date and complete information respecting these properties, as well as their owners and registrants, may be obtained.

Respectfully yours,

Claude G. Bowers
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  2. Enclosures mentioned in this despatch not printed.
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