811.20 Defense (M) Chile/652
The Ambassador in Chile (Bowers) to the Secretary of State
[Received May 23.]
The Ambassador has the honor to transmit for the Department’s information and records copies of notes41 exchanged recently between the Embassy and the Chilean Government amending the overall metals and minerals purchase agreement and providing for its extension in amended form until January 31, 1945.
It will be observed that it is stated in the penultimate paragraph of the Chilean Government’s note that “in view of the severe repercussions these reductions in prices will cause the national mining the Government of Chile proposes, when considering economic relations with the United States, to initiate new negotiations with a view to finding a solution of this and other problems”.
Representatives of the small miners have received the amended agreement with no inconsiderable dissatisfaction and protest. They contend that the new prices for copper ores and concentrates will not permit many properties to operate at a profit and that the discontinuance of manganese, gold ore and gold concentrate purchases after next August will cause widespread unemployment.
The adoption at this time by the Chilean Government of a realistic policy with respect to the small mining industry would gradually tend to eliminate many of the marginal and uneconomic producers. It is unlikely, however, that the authorities will consider such a policy but instead will seek to obtain a restoration of the cutbacks in the prices and an agreement with the United States to continue purchasing manganese, gold ore and concentrates, for a further period. Failing in this the indications are that serious consideration will be given to supporting the small mining industry either by subsidy payments to be financed out of a tax on the copper produced or exported by the American companies or by the formation of a copper sales and export corporation organized and operated along the lines of the entity set up some ten years ago for the sale and export of nitrate and iodine.
- Not printed.↩