740.00112A European War 1939/25390

The Ambassador in Peru (Norweb) to the Secretary of State

No. 6076

Sir: I have the honor to inform the Department of further developments pertaining to the cancellation of insurance written for Proclaimed List firms. The initiation of the Embassy’s renewed activities in this phase of our economic warfare program was reported in despatch No. 5877 of January 18, 1943 (page No. 2).19 Indications are favorable that some degree of success will be achieved (thanks to the Department for the timely and indisputable intercepts) although, as usual, there is some hesitation and bickering.

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The following developments may be of interest and value to the Department. Mr. Figari, Superintendent of Banks and also Supervisor of insurance companies, stated on February 6 that he had been informally advised that it is going to be necessary to terminate all insurance contracts with Japanese and Germans. He did not say “Proclaimed List firms”. Apparently the full measures will not be applied to Peruvian cloaks. Dr. Gallagher,20 in discussing the insurance matter with Mr. Figari on the same occasion, remarked that the greatest difficulty is in regard to life insurance contracts. A person who has been paying premiums on a policy for a number of years has an interest in the reserves of the company and his policy is a vested right. He could not easily see a legal basis for an order by the Peruvian Government to the insurance companies to terminate these contracts.

Insofar as merchandise was concerned, he pointed out that it might be the case that much of the merchandise in German and Japanese firms is still unpaid for and, therefore, the Peruvian suppliers have a vital interest in the unpaid merchandise being insured. It was pointed out that the United States has been at war for over fourteen [Page 721] months and that anyone who supplied merchandise to these firms during the last year should not have done so in view of the Peruvian laws prohibiting transactions with Germans and Japanese. He agreed to this statement as did Mr. Figari. The latter said that any merchandise which has been delivered during the last year was “mal vendido” and if it were burned up without insurance the seller would be “bien pagado”.

The question then arose as to the effect on the insurance companies of terminating all these contracts at one blow.… The agreement at the termination of the conversation was that Mr. Gallagher was to call on the Minister of Finance21 and discuss the various aspects of the problem with him and that Mr. Figari would determine from all of the insurance companies the amount of insurance involved, broken down into insurance of Japanese firms and insurance of German firms, and similarly broken down into life insurance, insurance on buildings and insurance on personal property.

It may be interesting to note that in the course of the conversation Mr. Gallagher stated that he considered the innumerable Japanese establishments in Lima a definite peril, that should Hirohito22 send word to his subjects to set fire to their establishments at a certain time and date they would undoubtedly obey, and most of Lima would possibly be destroyed.

It was pointed out to the conferees that such an eventuality is the best possible argument for cancelling the insurance, including life insurance, since such a conflagration likely would produce a riot in which Japanese lives covered by insurance would be lost.

Further developments will be reported.

Respectfully yours,

For the Ambassador:
Julian Greenup

Counselor for Economic Affairs
  1. Not printed.
  2. Manuel Gallagher, official of the Peruvian Ministry of Finance.
  3. Julio L. East.
  4. Emperor of Japan.