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

No. 4740

The Secretary of State refers to the Department’s instruction no. 4729 of February 9, 194586 in which it is stated that the Interdepartmental Committee is prepared to consider the deletion of all or a substantial portion of the names on the Proclaimed List which are now in Category III as soon as adequate data is submitted which will enable the Committee to determine how far the Chilean Government has progressed with the intervention, liquidation and forced transfer of the Category I firms which have been subjected to Decree 463.

Should it be determined that only a portion of the names in Category III will be deleted in the next Supplement, the Committee will then desire to remove from the List the most innocuous names in Category III, thus leaving the more serious cases for possible consideration at a later date. Accordingly the Department has reviewed the data [Page 774] available here pertaining to the names in Category III and has arranged such names in the following Groups:

Group 1. Firms and individuals liquidated, bankrupt or dead.
2. Cloaks of a minor character.
3. Cloaks for Category I and II firms.
4. Firms and individuals dealing with Proclaimed List firms.
5. Firms and individuals dealing in enemy goods or with enemy territory.
6. Firms and individuals with Axis sympathies.
7. Italian Nationals and Fascists.
8. Firms and individuals engaged in pro-Axis propaganda or other pro-Axis activities.
9. Miscellaneous
Under this heading have been placed the worst offenders which were formerly classified under headings Nos. 3–8 inclusive.
10. German Nationals and Nazis.

Under the above breakdown of Category III, the Committee would first consider all of Group I for deletion, continuing with each succeeding Group in its numerical order so that Group X would be the last to be considered.

The underlying objective of the breakdown is to group the names in the order of the seriousness of the offense involved. In arranging the order of the above Groups and in classifying the names thereunder, the Department has been guided by the nature and type of offense indicated by the breakdown as well as by the following considerations:

The effect which any particular deletion or group of deletions may have locally on the prestige of the Proclaimed List.
In general the most flagrant or important cases which would normally fall in Groups III to VII inclusive and which did not seem to merit a preferred status, were relegated to Group VIII.
German Nationals, particularly where it appears that they are Nazis or where there are other derogatory facts in the record, should be the last to be deleted.
Minor cases such as those of unimportant cloaks, of isolated cloaking transactions and cases where the purpose of the List has been achieved, should be among the first to be deleted.
Ordinarily persons and firms guilty of pure trading offenses should be given preferred consideration over those cases in which political offenses or considerations are involved.
Cloaks for Category I and II firms should be deleted only if deletion will not interfere with the local controls program. Also active cloaks for going concerns in these Categories should not be removed.
Where a name has only recently been added to the List, consideration should be given to the question of whether the deletion would be premature.

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Six copies of the Department’s breakdown of Category III are enclosed herewith.89 This work is based solely on the Department’s records and since the Embassies are in the possession of data and information in many of the cases which has not been transmitted to the Department, the Embassy is requested to immediately review the enclosed grouping of the Category III names in collaboration with the British and Canadian Embassies taking into consideration the factors above indicated, and to make such changes in the listing of the names as seem proper. In performing this work the Embassies are not expected to make fresh investigations in each case but only to utilize such information and data as they presently have available.

In order to expedite the consideration of Category III names, the Department would appreciate receiving the Embassy’s comments as soon as possible. The Embassy’s reply should be forwarded within 4 days from the receipt of this instruction if possible.

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