Foreign Relations of the United States: Diplomatic Papers, 1944, The American Republics, Volume VII

740.25112 RP/4: Telegram

The Ambassador in Chile (Bowers) to the Secretary of State

Santiago, January 20, 1944—midnight.
[Received January 21—8:45 a.m.]

131. Pursuant to article 28 of the economic project⁷⁷ and the recent controls decree set out fully in my telegram 102 of January 15,⁷⁸ the following additional controls decrees have been signed by President Ríos and all Ministers whose signatures are required, and are ready for promulgation:

1. Decree No. 402 dated January 19, declaring the Chilean offices of the Banco Abeman [Alemán] Transatlántico and of the Banco Germánico in liquidation as of December 31, 1943; the liquidation to be carried out immediately by the Superintendency of Banks pursuant to appropriate provisions of the general banking law, particular reference being made to title V of said law. Altogether six offices of the banks mentioned will be affected. While this decree has been prepared for some time, intensive efforts have been made by the banks during the last few days to secure their continued operation under the supervision of an interventor, which efforts have been successfully forestalled by the excellent work of Señores Ramírez and Fernández.⁷⁹

2. Decree no. 422, January 20, requiring registration by all natural and juridical persons residing or domiciled in Chile, who have in their possession money, bonds, and other assets for the account of or in the name of persons and institutions resident or domiciled in Axis or Axis occupied countries to file sworn declarations of such properties with the Superintendency of Banks; prohibiting all contracts, transfers, negotiations or other acts with respect to such assets without prior authorization of the Superintendency of Banks, which prohibition is also made applicable to all assets registered in compliance with decree 736 of March 1, 1943 and subsequent extension decrees (see despatch 7117 of July 28, 1943⁸⁰); providing that in liquidating the German Banks under decree no. 402 the Superintendency shall not accept drafts and payments [or?] carry out any operations which would result in the transfer of properties belonging to institutions and persons residing or domiciled in Axis territory; and authorizing the Superintendency to withhold the authorization of any operation of said banks when the same may cause difficulties arising from conditions under which commerce and industry are carried on during the international conflict. (This decree effectively blocks the assets registered under decree No. 736 above referred to and requires additional registrations of the assets described above.)

3. Decree no. 423 of January 20, declaring that the directors of any corporation may justify a refusal to authorize a transfer of its stock on the ground that the transfer of such stock may cause disturbances in the normal functioning of such corporation because of wartime conditions, which action shall be made known to the Superintendency of Corporations. The net effect of this decree is to permit corporations to refuse to recognize the transfer of its stock when such transactions are in conflict with the Proclaimed List and other wartime policies of the United States.

4. Decree no. 427 of January 20, declaring that all corporations are required to retain in their possession dividends or capital payments owing to stockholders whose activities in the country have been contrary to the principles of continental solidarity, security and defense, to which the Government of Chile has committed itself in international agreements; but such retention shall be made under the supervision and upon previous authorization of the Ministry for Foreign Affairs to be transmitted by means of a decree in each case to the Superintendency of Insurance Companies Corporations and Stock Exchanges; and such funds shall be withdrawn by said Superintendency and deposited in a blocked account in the Central Bank, pending further action by the Government. The effect of this decree is to block dividends or other payments to Proclaimed List stockholders of Chilean corporations or foreign corporations doing business in Chile, as in the case of the dividends due by Indac to Enrique Block.⁸²

While the above decrees do not specifically recognize the Proclaimed List, it is apparent that they do so by implication. This is particularly evident in decree no. 427. These decrees are further evidence that the Chilean Government is intent on putting into effect a sweeping program implementing the resolutions of the Rio and Washington Conferences. The above decrees, according to officials of the Commercial Policy Section of the Ministry for Foreign Affairs who supplied Mr. Franki⁸³ with advance copies thereof, and also according to Señores Fernández and Ramírez, will be promulgated and released to the press by the Minister of Finance⁸⁴ on January 21. These officials also state that further decrees, which will be promulgated shortly, are now under consideration, among which may be mentioned a decree to liquidate the German insurance companies operating in Chile. Full text of the above decrees will be forwarded as soon as possible. Further developments will be reported as they occur.

Bowers

77. Promulgated December 23, 1943, to provide the Executive with the authority necessary to give effect to the resolutions and recommendations of the Third Meeting of the Foreign Ministers of the American Republics, held at Rio de Janeiro, January 15–28, 1942, and of the Inter-American Conference on Systems of Economic and Financial Control, held at Washington, June 30–July 10, 1942. For correspondence concerning these Conferences, see ibid., 1942, vol. v, pp. 6 ff. and pp. 58 ff., respectively.
78. Not printed.
79. Pablo Ramírez and Alfonso Fernández, members of a coordinating committee created to supervise control measures over Axis properties.
80. Foreign Relations, 1943, vol. v, p. 901.
82. Indac, Establecimientos Metalúrgicos “Indac” S. A., was deleted from the Proclaimed List on the basis that its objectionable dealings resulted from carelessness and not design. The deletion was conditioned upon a cancellation of its contracts with Proclaimed List firms among which was Enrique Block.
83. Julius F. Franki, Special Assistant in the Embassy.
84. Arturo Matte Lorrain.