811.20 Defense(M)Peru/630: Telegram

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

419. Reference is made to the Embassy’s telegram 379, March 17, 11 p.m., from Thompson to Rosenthal regarding the Metals Reserve agreement. The Finance Minister yesterday inquired if any news had been received from Washington which we interpret as an additional indication he is rather uneasy and possibly is receding from his original firm stand against inclusion of the tax stabilization provision (article 3).

I am of the opinion that these protracted discussions could be ended or at least shortened by a communication from Washington to the effect that it seems impossible to conclude the agreement until the tax situation is clarified; and this recommendation is made because it is our understanding the present flow of minerals and metals from Peru is satisfactory and is not retarding the war effort.

It is felt that the presentation to the Minister of such a message concurrently with the pressure now being exerted on him by producers and exporters might possibly influence to accept some modified wording of article 3 similar to that given in telegram 379 which would accomplish the desired results.