811.20 Defense (M) Chile/619: Telegram
The Secretary of State to the Ambassador in Chile (Bowers)
34. Careful study has been given to your Telegram No. 45, January 8, 1 p.m., in reply to the Department’s No. 11, January 4, 6 p.m., [Page 714] which instructed you to take steps looking to the cancellation of the United States-Chilean copper control agreement. The Department is alive to the delicacy of the situation as you describe it and has given the most sympathetic consideration to your view that you cannot approach the Foreign Minister on cancellation of the copper agreement unless you can convey to him some good news and that an increase in the wood pulp quota would give you this opportunity.
Wood pulp is now one of the most critical of all commodities. The shortage is so severe that the scarcity is being felt keenly by the press in the United States, which is objecting vociferously to the cuts in newsprint supply which they have had to suffer and which are curtailing their newspaper output. An equally serious situation exists in several of the other American republics. Every effort has been made and will continue to be made to give Chile its equitable share of wood pulp or newsprint. Nevertheless, owing to the Department’s respect for your recommendation in the matter and because it is essential that steps be taken promptly to terminate the copper agreement, the Department has, as an extraordinary measure of cooperation with Chile been able to obtain assurances of a total additional allocation of 4,000 tons of chemical grade wood pulp for 1944. Eight thousand tons had already been allocated and the Department has reliable information that approximately 8,000 tons are now on hand in Chile. Thus, the amount to be shipped during 1944 would total 12,000 tons which, added to the 8,000 tons estimated to be on hand in Chile, provides Chile with a total of 20,000 tons. You may inform the Foreign Minister of this increased allocation, stressing that it has been made as a friendly gesture and at considerable sacrifice. It is too late to change production schedules for the first quarter of 1944, but during the second quarter of the year arrangements have been made to step up output for Chile by an additional 1,000 tons, the remaining 3,000 tons to be distributed over the last 6 months of 1944. It is simply impossible to obtain more without running a serious risk of repercussions elsewhere, both in this country and abroad. The additional 4,000 tons will, however, give you the trading card you desire.
Please proceed as soon as possible to have the copper control agreement terminated, bearing in mind the points made in the Department’s No. 11 of January 4, 6 p.m. With respect to the Argentine aspects of the situation, please emphasize to the appropriate authorities that although once the agreement be terminated Chile would be released from its control obligations, it is nevertheless your Government’s strong conviction that it would strike a most discordant mote if at this time of stress in respect of relations; between Argentina, and the other American republics (accompanied by the Bolivian crisis) Chile were to furnish Argentina with amounts of copper other than [Page 715] that essential for public health and safety. This will give you the Department’s point of view also for use in connection with the brood mare barter deal.
I know that you will underline in your conversations the cooperation which we extended in helping to build up the Chilean copper fabricating industry and once released from the agreement, this can prosper even more; also that we are ready to do all we can further to cooperate in this and related situations aimed at broadening Chile’s economic base.
Please telegraph the Department when you have placed this matter before the appropriate authorities and state how soon the cancellation may become effective.20