The Chargé in Peru (Butler) to the Secretary of State

No. 8764

Sir: I have the honor to refer to the Department’s Circular Instruction dated December 7, 1943 (File No. 740.00112 RP/3).

The question raised in this Instruction has been the subject of many conversations with influential business men and officers of the Peruvian Government. These people almost unanimously held and expressed the belief that the elimination of Axis companies and their replacement by nationals could be effected without seeking financial or managerial assistance outside the usual commercial channels. The Embassy has always shared this opinion and gave expression thereto in Despatch No. 3002 of March 3, 1942 and Despatch No. 7445 of July 24, 1943.12

Local controls over spear-head Axis enterprises have been applied loosely and slowly, but there has never been much doubt that eventually they would all be replaced by national interests. The Supreme Decree of April 10, 1943 decreed that after May 31, 1943 the properties of Axis subjects which had not already been transferred to Peruvian nationals by direct negotiation would be subject to expropriation by the State. In the opinion of the Council of Economy this decree itself is defective because it recognizes the procedure of putting all cases of expropriation and forced liquidation through the usual legal channels which according to officials of the Council could never achieve the desired results because normal legal processes can not successfully be employed in the solution of emergency measures. This is the reason given by the Council and Superintendency13 for failure to expropriate and liquidate Axis organizations under the said decree.

According to Dr. Aramburu14 and Dr. Garcia Sayan15 there is in preparation at the present time a new Supreme Decree which will empower the Council and Superintendency of Economy to force the prompt dissolution of Axis companies without recourse to the civil courts, and it is therefore hoped that progress in the elimination of [Page 1556] Axis enterprises may soon be accelerated. In any case, the delay which has heretofore characterized the Peruvian Government’s administration of existing legislation has not been caused by any lack of financial resources or of appropriate technical or commercial personnel.

The Department’s policy fostering consultation between American and British Missions on matters of replacement is understood, but it is not thought that any problems will arise in Peru which will indicate the necessity of outside assistance and consequently that such conversations as the Embassy may have with the British Legation on this subject will be limited to the general over-all policy as defined in the Instruction under acknowledgement.

Respectfully yours,

For the Chargé d’Affaires a.i.,
Julian Greenup

Counselor for Economic Affairs
  1. Neither printed.
  2. The Superintendency of Economy operated through a Council and under the Ministry of Finance and Commerce. Its chief function at this time appears to have been the handling of Axis assets.
  3. José Felix Aramburu, president of the Council of the Superintendency.
  4. Superintendent of Economy.