811.20 Defense (M) Peru/9–644
The Ambassador in Peru (White) to the Secretary of State
[Received September 18.]
Sir: I have the honor to transmit herewith77 a copy and a translation of a letter dated August 28, 1944 from Mr. Julio L. East, Minister of Finance and Commerce, requesting the continuance of antimony purchases in Peru by the U. S. Commercial Company, despite the fact that no provision was made for the purchase of this metal in the Over-All Metals and Minerals Agreement formally executed August 25 and effective from July 1, 1944. Also attached are two memoranda dated March 5 and April 22, 1944, setting forth the views of the antimony producers on the cessation of purchases and the arguments in favor of their resumption, and a memorandum from Mr. Larson, of the Foreign Economic Administration, on the subject, prepared at my request.
When I was in Arequipa, I was approached by some representatives of mining concerns, who also urged their claims for the purchase of antimony. They gave me copies of two memoranda previously referred to which they had addressed to the Peruvian Government on the subject. As Mr. Larson was in Arequipa at the time, I turned these over to him, and he subsequently returned them to me with his comments.
I should like to state also that sometime ago the Finance Minister related to me a series of steps which had been taken for accelerating the liquidation of alien enemy concerns. Having given an account which sounded quite efficient, he then formulated his desire that the antimony production be purchased. While he did not say so, the [Page 1532] inference was that he had done something to please us and now requested some compensation from us. Personally, I do not believe this argument should be given any consideration because Peru’s anti-axis economic warfare has been even more important for this country than for the United States. And, if I may add another impression, the liquidation of the spearhead firms has not yet been completed.78
In his letter the Minister implies that the agencies of the United States Government encouraged production of antimony and in consequence it should be the responsibility of the U. S. Commercial Company to continue purchases in order to permit the producers to liquidate their investments. As pointed out in Mr. Larson’s memorandum, at no time during the present crisis has this Embassy received instructions from any governmental agency to encourage or foster in any way the production of antimony in Perú. It is a matter of record that as far back as the beginning of 1943 the curtailment of antimony purchases in Perú was contemplated by the Board of Economic Warfare,79 although this step was not carried out at that time. Furthermore, the Over-All Agreement which expired June 30, 1944 states that the maximum amount of any metal that the U. S. Commercial Company is obligated to purchase shall not exceed 125 per cent of the 1942 exports with the exception of antimony which is limited to 100 per cent of the 1942 exports produced in Perú. This limitation on antimony purchases indicates that our supply position in this metal was comfortable and purchases in excess of the contract commitment were not contemplated. According to the records in the Lima office of the Foreign Economic Administration, we have purchased the amounts of antimony ores and concentrates specified in the Agreement. Therefore, the building up of unmarketable stocks of this metal may be attributed only to the optimism on the part of the producers for future markets.
According to the figures submitted by the Sociedad de Mineros del Sur del Perú in the attached memorandum, the expansion of the antimony production in southern Peru occurred in the years 1939 to 1942, during which time England was the principal purchaser. Japan also was an important factor in the Peruvian antimony market in 1940 and 1941.
Since we have fulfilled our contract obligation in regard to Peruvian antimony purchases, the matter of aiding the distressed antimony miners is entirely a Peruvian problem. It may be pointed out that the Banco Minero del Perú was organized primarily for the purpose [Page 1533] of assisting the small producers of minerals and it appears in order for this agency to come to the rescue of the antimony miners by purchasing and stockpiling the accumulated stocks instead of depending on the U. S. Commercial Company.
With a decrease in the demand for war materials it is not difficult to foresee similar requests, either legitimate or otherwise, and any action taken in sustaining Peruvian antimony production is susceptible to interpretation as an obligation on the part of the U. S. Commercial Company which would establish a precedent for similar claims in other cases.
In addition to the foregoing, any concession with reference to antimony would represent more favorable treatment to the Peruvians than is being given to our own nationals.
It is in order to mention also that the United States has faithfully completed all of its commitments to Peru in every single case. It seems to me preferable that Mr. East comply with Peru’s duties, particularly toward the American bond holders and certain other individual American creditors of this nation.
Respectfully yours,