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

No. 11,393

The Ambassador has the honor to refer to his despatch No. 11,271 dated December 14, 1944 transmitting to the Department a joint memorandum80 submitted by the American, British and Canadian Embassies to the Chilean Controls Commission in regard to the Chilean Controls program and the possibility of reducing the lists in Chile. In reply to said memorandum the Chilean Controls Commission submitted a memorandum to this Embassy dated December 21, 1944. A copy of this memorandum together with a translation are enclosed herewith.81

The memorandum in reply by the Commission is a summary covering the implementation of the Rio and Washington Conferences82 [Page 771] by the Chilean Government which contents in substance has been previously transmitted to the Department by various communications of this Embassy. The memorandum states that the Chilean Government has proceeded to eliminate through its local controls program all those firms or commercial elements which in view of their importance constituted a menace to the cause of the Allied Nations in accordance with international agreements approved by Chile. It is further stated that the respective liquidation decrees supported by specific instructions of the Controls Commission authorizes the liquidators to take direct and complete control and administration of all firms submitted into liquidation; and that, therefore, the entity of all firms subjected to local controls is being completely eliminated; that all of these principal Axis firms are subject to strict supervision of the Government while in the process of carrying out their liquidation.

It is pointed out that the liquidation or forced transfer of various firms is still in process and that a solution of the final disposition of other firms, considered important to the national economy, is under consideration. Nevertheless it is pointed out that these outstanding operations and matters pending a final solution do not in any manner constitute a failure to any degree, in giving a complete implementation to the Rio and Washington Conferences by Chile.

In view of the above it is expressed that the Chilean Government reiterates its statements made to the respective Embassies in its memorandum of last October indicating the desire and hope of the Government that in view of the local control measures adopted, the future existence of the Proclaimed List is made locally unnecessary and for said reason the Proclaimed List should be completely or substantially eliminated in Chile. It is also emphasized that the Government anticipates the complete elimination, at this time, of all names included in Category III attached to the Embassies’ joint memorandum of December 14, 1944.

In conclusion and in answer to the three specific questions raised in the Embassies’ memorandum, namely:

The policy to be adopted by the Chilean Government with respect to the firms and enterprises listed in Category II. The Commission indicates that it will proceed against any firms listed in Category II in those cases wherein it can be established that a firm regardless of its nationality is considered as an undesirable firm judged within the Government’s established policy as set forth in the memorandum.
The policy which will be adopted by the Commission with respect to trademarks and patents controlled from Axis territory either directly or indirectly. In reply thereto it is stated that trademarks are considered in the same category as any other assets of the firm, for the purpose of liquidation, and that in carrying out the liquidation [Page 772] of these firms the procedure will be to cancel or transfer to desirable interests those trademarks that are considered essential and which must be continued in operation. In connection therewith there is enclosed herewith a copy of a memorandum85 on a discussion between a member of the Embassy staff and Señor Goyeneche,84 charged with the liquidation of all firms being liquidated by the Corporacion de Fomento, which touches on local plans for disposition of trademarks. Although patents are not mentioned specifically it has been verified that the word “marcas” is inclusive of trademarks and patents.
Regarding the supplying of adequate and current information to the Embassies regarding the progress of the intervention, liquidation or forced transfer of the firms affected. The Commission’s reply stated that they will be pleased to supply all pertinent information concerning the execution of the control decrees issued by the Government.

It is the opinion of the Embassy that until such time as the Commission supplies an up-to-date progress report on an individual firm basis of those firms submitted to control, the Embassy will not be in a position to fully appraise the complete effectiveness of the local control decrees and the specific fulfillment by the local Government of its compromises. Furthermore, it is considered that before a definite commitment can be made for the complete elimination of Category III names, this information must be supplied to the Embassy in order that any relaxation of the Proclaimed List application may be considered by the authorities in Washington commensurate with the actual effective controls applied against the principal Axis firms by the Chilean Government. The British and Canadian Embassies concur in the above. In this connection, representatives of the respective Embassies are meeting this week with the Controls Commission for the purpose of requesting the Commission to furnish the Embassies with a current report concerning the progress of the intervention, liquidation or forced transfer of each enterprise submitted to local control including the disposition of the assets of these firms in accordance with Decree No. 463, the undesirable personnel dismissed and the approximate date that the final supervision of the Government in carrying out this program will be terminated. The current reports should be compiled on an individual firm basis. As soon as this information is received it will be transmitted to the Department in accordance with the Department’s Airgram No. A–767 of December 14, 1944.85

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Conclusion: In conclusion it may be stated that, with the exception of the irregularities observed, the local controls program is, in general, [Page 773] proceeding satisfactorily and the local decrees providing for the liquidation or forced transfer of the main Axis-dominated or controlled firms are being substantially carried out in accordance with the provisions and the spirit of the respective controls decrees enacted by the Chilean Government. A number of factors beyond the control of the local Chilean officials have retarded a more expeditious execution of the program adopted; i.e., political counterpressure applied by influential interests subjected to the program, lack of trained and coordinated organization and adequate personnel in carrying out the measures adopted, and the prudence that must be exercised in order that the necessary adjustments may be made in minimizing the repercussions to the economy of the country in the execution of the program. Nevertheless it is the opinion of the Embassy that these factors do not materially detract from the general effectiveness of the local controls program or its final and complete execution.

In view of the above it is suggested that the Interdepartmental Committee on Proclaimed List Matters continue to adhere to its present policy as reflected in the recent Proclaimed List supplements for Chile, in approving a proportionate number of deletions, as provided in penultimate paragraph of the Embassies’ memorandum of August 15, 1944 to the Chilean Government.86 (See Embassy’s despatch No. 10,479 of August 15, 1944.)87

  1. Despatch not printed; for text of memorandum, see ibid., p. 786.
  2. Not printed.
  3. The Third Meeting of the Foreign Ministers of the American Republics, held at Rio de Janeiro, January 15–28, 1942, and the Inter-American Conference on Systems of Economic and Financial Control, meeting at Washington, June 30–July 10, 1942. For documentation on U.S. participation in these Conferences, see Foreign Relations, 1942, vol. v, pp. 6 ff. and pp. 58 ff., respectively.
  4. Not printed.
  5. Gastón Goyeneche, Adviser to the Chilean governmental instrumentality known as the Corporación de Fomento de la Produccion.
  6. Not printed.
  7. Not printed.
  8. Foreign Relations, 1944, vol. vii, p. 776.