563 Rio de Janeiro/9–2846

The Acting Secretary of State to the Chairman of the American Delegation to the Second Pan American Congress of Mining Engineering and Geology ( Daniels )

No. 243

Sir: In your capacity as Chairman of the United States Delegation to the Second Pan American Congress of Mining Engineering and Geology to be held at Rio de Janeiro, Brazil, beginning October 1, 1946, I shall appreciate your communicating to the other members of the Delegation the position to be upheld at the forthcoming Congress.

This is an official governmental conference and consequently the delegations will represent the official views of the respective governments. Our Delegation at the Congress must act as a unit in representing the United States and should invariably present a solid front. Any divergent views among its members should be resolved in private meetings of the Delegation, thus leaving no possibility that embarrassing differences of opinion might appear in open discussion. The members of the Delegation will, of course, represent before the Congress the views of the Government of the United States rather than those of the respective individuals or of organizations or groups with which they may be affiliated. This is not intended to bar the expression of personal views which are not inconsistent with these instructions or Delegation policy. In these cases not covered by instructions or Delegation policy, personal views may, of course, be expressed, but these should generally be clearly qualified as personal.

As Chairman, you shall be responsible for adherence to the policy of the United States by all members of the Delegation, and in the event of any division among the members on such matters, your decision shall be final and binding upon the Delegation.

Papers prepared by members of the Delegation for presentation before the Congress which have not been reviewed by the Department, may be approved by you in the light of the instructions contained in this letter. Papers not approved by the Department or by you, if presented, must be clearly identified as expressing the personal as distinct from the official views of the writer.

You are authorized to request any member of the Delegation to attend or speak for you as Chairman, in the event of your absence, or inability to attend sessions of the Congress and in any other instances in which you are unable to exercise the functions of your position.

In accepting the invitation of the Brazilian Government to send an official United States Delegation to this Congress, the Department [Page 68] was keenly aware of the importance of the meeting with respect to its relation to our general economic foreign policy.2a This government has just released to the public the Suggested Charter for an International Trade Organization of the United Nations. This document outlines proposed objectives, guiding principles and administrative procedures for the proposed organization. Among the paramount aims are the reduction of tariffs and other trade barriers, and expansion of the production, exchange and consumption of goods, directed toward creation of an expanding world economy and higher standards of living and economic conditions favorable to maintenance of world peace. The development and exploitation of mineral resources, which will be among the important topics of discussion at the Congress, are related to those aims, particularly as regards tariffs, wage levels, investment of capital, and taxes. It therefore becomes of great importance that the United States Delegation endeavor to have excluded from the resolutions and recommendations of the Congress anything that might prejudice the success of the impending meetings scheduled to secure acceptance of the proposed charter of the World Trade Organization.

To ensure this, it would appear desirable for the United States representatives to propose, if opportunity permits, that the Congress reaffirm the principles outlined in the Economic Charter of the Americas (Resolution LI of the Final Act of the Inter-American Conference on Problems of War and Peace, Mexico City, March 1945). Such action by the Congress would reaffirm these principles as a framework for the subsequent resolutions and recommendations to be evolved during the course of discussions at the conference.

The ten principles of the Economic Charter of the Americas include several which may prove very useful to refute any attempts on the part of other delegations to sponsor resolutions subscribing to the expansion of state monopolies. A review of the record of the First Congress held in Santiago, Chile, January 1942, shows that a strong effort was made by the Argentine Delegation to introduce proposals advocating monopolies on mineral products, nationalization of the mining, power and transportation industries and state control of wages, production and dividends. Advice now reaching the Department of State indicates that Argentina is sending a strong Delegation to this Second Congress and may seek again to introduce the theme of nationalization for Latin American mining. If a resolution ensuing from any such proposals be brought to a vote before the meeting, the Delegation should abstain, enter a reservation, or present a statement accompanying its negative vote, depending on the circumstances.

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The Delegation which you will head will without doubt be able to contribute materially to the studies of the Congress regarding the technical problems of the mineral industry. In addition to research and operating problems, important topics should be the furtherance of the exchange of scientific and specialized personnel between the American republics and the promotion of the exchange of students and faculty among the universities of the several countries, leading toward a greater understanding between the peoples of the Americas. Among other measures the Delegation could support or even sponsor is, for example, agreement to promote uniform standards of mineral statistics. This would contribute greatly to the usefulness of data interchanged among the various countries. Another valuable contribution would be the compilation of the mining codes of the American republics with the objective of promoting a greater knowledge of these laws for the benefit of interested parties and perhaps tending toward increased general conformity and elimination of undesirable and restrictive provisions in the various codes.

Although it is not considered appropriate for the United States Delegation to initiate the discussion, the Delegation should be prepared to support in the strongest manner, any proposal or resolution directed to the encouragement of the relaxation of restrictive mining regulations in the American republics. Likewise, support should be given to measures looking toward the moderation or removal of exchange controls, undue restrictions on private foreign investment, excessive taxation and other practices not in harmony with the spirit of the Economic Charter of the Americas.

It is possible that emphasis may be placed on the steadily increasing wage scales in Latin American mining operations as a serious threat to continued profitable production from existing mines and to development of new deposits. The answer to this is, of course, far from simple, in view of the unique conditions of mining and the unusual hazards attached to new ventures in this field, and also in view of the fact that different conditions exist in every operation. However, the ultimate objective of this country’s economic policy, an expanding world economy to create the atmosphere for enduring world peace, is keyed to higher standards of living which in turn depend on greater productivity which will make possible rising wage levels for all types of labor. The continued high production of United States and Canadian mines in the face of greatly increased wage rates during the last thirty years can be cited as examples indicating that improved production methods permit the payment of higher wages to skilled and efficient labor.

In July of this year the President approved the Stockpiling Act providing for the accumulation of stocks of strategic materials in [Page 70] which this country is deficient. The Congress also appropriated $100,000,000 for purchase of these materials to initiate the program. In order to meet anticipated stockpile goals, it will be necessary for the United States to import very large quantities of strategic materials, by far the largest items being minerals and metals. Although the countries of Central and South America together with Canada and Newfoundland in their normal capacity as sources of supply may be called upon to furnish a sizeable proportion of the total requirements, it is not proposed to arrange any special measures for this purpose. Purchases will be made in accordance with the availability of materials of desired quality, not by reference to geographic area. Much has been said in the past and may be repeated in the future, concerning the desirability of hemispheric self-sufficiency both from a resources as well as military security viewpoint. This Government is unqualifiedly opposed to the principle of economic spheres and the Delegation to the present Congress should strive to support the idea of an interchange of manufactured goods and raw materials between all the nations of the world as the only road to creation of the expanding world economy essential to lasting peace.

During the course of the Congress, the subject of the convocation of the Third Congress will be raised. Should the suggestion be made that the United States act as host, you will seek discreetly to avoid the sponsorship of the next Congress by this Government and in expressing appreciation for the suggestion, point out that you are not authorized by your official instructions to extend an invitation on the part of the United States Government. In this connection, it is considered that the expense of holding sessions of the Congress more frequently than once every two years is not justified in the absence of special circumstances.

You will appreciate, I am sure, that the members of the Delegation are not authorized to offer any written or oral statement or to enter into any agreement which might be construed as committing this Government to a definite course of action or which might involve an obligation to expend funds not previously appropriated or allocated. Since this is a technical meeting devoted to problems in the field of engineering and geology, it is considered unlikely that any matters of a political or diplomatic character will arise. The Delegation should attempt to confine the discussion in so far as possible to the technical problems on the agenda. However, should difficult or controversial points arise to which there may appear to be no ready solution, it is recommended that the guidance of the Department be sought by telegraph.

Upon the completion of the Congress, you are requested to submit to the Secretary of State an official report covering the work of the [Page 71] Delegation and the action taken by the Congress. Enclosed for your convenience is a suggested outline3 for your report which will serve as a convenient checklist of items to be covered and will provide a degree of uniformity with reports of other American delegations, all of which will either be printed separately or summarized in the Department’s Conference Series. The official report should be supplemented by a confidential report containing any other items which in your opinion should be made a matter of confidential record.

You undertake your responsibilities with the assurance of my keen interest and wholehearted support. I have every confidence in your ability to reflect credit on the United States in this undertaking.

Very truly yours,

William L. Clayton
  1. For documentation on various aspects of United States economic foreign policy, see vol. i .
  2. Not printed.