740.23112 RP/35

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

No. 3353

The Secretary of State refers to the Embassy’s despatches no. 11 and no. 12 both of April 4, 1944,20 concerning the appointment of a new Superintendent of Economy and the enactment of Peruvian Law no. 9952, establishing the procedure for the nationalization of Axis properties.

The Department has noted with interest the appointment of the new Superintendent and the enactment of this law since these facts [Page 1561] are an indication of revitalization of Peruvian economic warfare activities. However, the Department is inclined to agree with the Embassy that the deficiency of Peruvian economic warfare activities has consistently been the faulty administration of the control laws rather than the lack of legislation. It is therefore hoped that the new Superintendent will be able to overcome any pressure which might deter him from vigorously administering the control legislation.

Despatch no. 11 indicates that the Department will be furnished with the Superintendent’s program as soon as it is made known to the Embassy. It is suggested that the Embassy informally stress to the new Superintendent that at this stage of the war the best approach would be to concentrate on the elimination of the important Axis spearheads; such as, Ferrostaal A. G., Compañía General de Anilinas S. A., La Química Bayer S. A., and other spearheads of Axis penetration. If the new Superintendent follows the policies of his predecessors, he is apt to become so involved in the elimination of firms of minor importance that the elimination of the important spearheads is unlikely to be achieved in the immediate future. In view of the Department’s interest in obtaining the elimination of the major interests, the Department was gratified to note the progress made in the elimination of the Banco Alemán Transatlántico, reported in despatch no. 12.

On page 3 of despatch no. 12 it is stated that the funds resulting from the proposed transfer of Fábrica Nacional de Levadura “Arriba” will not be frozen since none of the directors are on the Proclaimed List and are not known to be active Axis agents. The reasons given for the plan not to block the proceeds of the transfer are not clear to the Department. It would appear that the following provisions of Peruvian law, although leaving the Superintendent of Economy some discretion in the matter, provide ample basis for blocking the proceeds of the proposed transfer: Article 4, Section (f) of Law no. 9586 of April 10, 1942; Article 2, Section 3 of the regulations of April 15, 1942 for the fulfillment of Law no. 9586; and Article 4 of the regulations of May 20, 1942 for the fulfilling of the Decree of April 10, 1942. The Department would appreciate a report concerning the general practice followed by the Peruvian authorities with respect to the freezing of the proceeds of liquidation. In this connection, reference is made to Recommendation no. 7, Section 1 (d) of the Washington Resolutions21 which calls for the effective blocking of the proceeds of the sale of transferred properties and rights, the profits accruing from intervened or supervised businesses, and the funds derived from total liquidation.

  1. Neither printed.
  2. For text of this Recommendation, see Final Act of the Inter-American Conference on Systems of Economic and Financial Control, p. 20.