740.00113 European War 1939/844

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

No. 6546

Sir: Referring to the Embassy’s telegram No. 515 of April 11, 1 p.m.,32 I have the honor to enclose herewith a copy and translation of the Supreme Decree of April 10, 1943,33 setting a time limit to the period in which Axis business enterprises may be nationalized, and stipulating that all Axis agricultural, industrial, commercial, as well as all other kinds of businesses referred to in Article 2 of Law 9586 which are not transferred to Peruvians in accordance with the provisions of laws 9586 and 9592 before May 31, 1943, will be expropriated by the State.

The new decree extends the principle of expropriation to real estate occupied by business establishments which were exempted from such proceedings in the previous laws and regulations.

Finance Minister East and Dr. Gerardo Balbuena (President of the Chamber of Deputies and author of the decree of April 10 here referred to) quoted President Prado as having declared expropriation activities would begin promptly on June 1 and would be concluded rapidly.

According to the decree, the details of transfer to Peruvians will be arranged in due course after expropriation. This procedure was specified for the purpose of terminating Axis economic activities immediately after May 31.

Another innovation of the decree places administration after expropriation, and pending final transfer, under the official dependencies, such as the Banco Industrial, Banco Agricola, Banco Minero, Caja de Seguro Social, etc., or under private organizations, already existing or to be created; thus eliminating the delay formerly experienced in endeavoring to effect transfer to Peruvians without prior expropriation. It should also diminish the collusion with enemy proprietors which so retarded nationalization under the old system.

The original draft of this decree cited the reasons for its promulgation, but they were omitted in the finally published text, presumably to avoid criticism. Among them was a concrete statement to the effect that the application of laws 9586 and 9592 (by the Superintendency of Economy) had failed to permit rapid and full realization of the Government’s declared policy of intercontinental solidarity in the present emergency.

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Pertinent aspects of the difficulties encountered in recent months and of the evolution of the present decree will be of interest to the Department:

The Superintendency of Economy was unsuccessful in curbing Axis business activities to the desired degree … Very important were the deficiencies of the existing powers. For instance, there was no clear authority to expropriate the real estate occupied by business entities.

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Respectfully yours,

R. Henry Norweb
  1. Not printed.
  2. Enclosure not printed.