103.9169 Lima: Telegram
The Secretary of State to the Ambassador in Peru (White)
722. From Crowley72 and Nitze, FEA, for Libbey. Your Letter F–Peru 1654, June 16,73 on Peruvian Overall Agreement.
[Page 1528]- 1.
- As stated in our latest letter we consider it absolutely essential in any event to obtain for us the right to change price or quantity of any item on three months’ notice. In view of this we agree to six months’ notice for cancellation of complete agreement.
- 2.
- In view of protection obtained in three months’ notice provision you may waive clause calling for reduction of our purchase obligation on agreement materials by the amounts exported to other countries, but you should insist on this provision in regard to exports to other consignees in the United States. This is necessary if we are to facilitate resumption of private trade.
- 3.
- Public purchase of silver ores and concentrates is impossible under established policy of this government. For your own information no purchase directive exists and WPB74 unwilling to issue one. Silver cannot be included in overall agreement but we will continue buying recoverable silver contained in agreement materials.
- 4.
- Present supply position prevents the inclusion of antimony in agreement. We included it in last renewal to give Peruvians advance opportunity to liquidate uneconomical producers. We believe this was well understood and that Peruvian government should not ask continued support of producers who cannot compete in private markets. It is expected that economical producers will find private buyers.
Similar remarks apply to tungsten except that we are making limited individual contracts at our new price schedule. We are required by supply situation (and, for your own information, by agreement with WPB) to reduce total public purchases. Peruvian producers are receiving same consideration as producers of other countries. The provision in our new tungsten contracts regarding fines, to which Mr. East objected in his memorandum 3, has been liberalized. Dowden is bringing the new terms to Peru. We believe they will remove part of the objection to the new price schedule.
There is no need for inclusion of molybdenum. The Peru Molybdeno contract runs until November 1, 1945 but must continue to be subject to price change or cancellation on 60-day notice.
Mercury cannot be included. All public purchase of mercury has ceased with the exception of outstanding obligation in Mexico and one Canadian contract, and notice has been given of cessation of Mexican purchases on August 31. The Canadian contract will soon be terminated.
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Hull