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

No. 3475

Sir: Supplementing Despatch No. 3319 of May 21, 1945,89 entitled “Peru’s Trade Controls Affect Imports from United States”, I have the honor to inform the Department that import as well as exchange permits have been granted with diminishing liberality during the last three weeks, owing, it is said, to a 15% decline in the Central Reserve Bank’s foreign exchange reserve fund.

The classes of merchandise more acutely affected were the so-called luxury goods and other articles which the import and exchange committees decided were unnecessary or could be replaced by domestic manufacturers.

Under date of May 30, 1945, the Lima Chamber of Commerce distributed among the importing houses a memorandum explaining the norms of the system as previously reported, but reversing one of the former decisions. “… the Committee announces,” stated the circular, “that it will not authorize the importation of any article for the simple reason that the importer declares he has the necessary foreign exchange, because if it should do so, it would imply encouragement to the foreign exchange black market. Foreign exchange in possession of the trade should be employed exclusively for the importation of merchandise of interest in the national economy, in accordance with the [Page 1349] permits which the Import Committee may authorize prior to the placing of the order.”

Certain officials and business men attribute this less favorable situation to accentuated hesitancy during the days prior to and after June 10, when the national elections took place, but others, and, it is believed, the majority, incline to the belief that the natural accumulative consequences of such controls are the dominant factors. These observers feel that substantial improvement will take place only after the incoming authorities achieve the monetary and administrative reforms which both parties have promised in their platforms; and that the only alternative is a rigid control system.

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Respectfully yours,

For the Ambassador:
Julian Greenup

Counselor for Economic Affairs
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