740.25112A/1–1046

Memorandum by Mr. Alexander Schnee of the Division of North and West Coast Affairs61

When Ruiz was in Washington in November he was informed that the Chilean PL consists of following three groups:

1.
Japanese.
2.
Spearheads and related cases and cloaks or trading cases connected with spearheads.
3.
Miscellaneous cases.

Group 2 constitutes the real problem.

Ruiz stated that all of the spearheads excepting seven had been liquidated and that in these seven the Axis interests have been divorced. The Department agreed to request a current report from Santiago on the basis of which a decision will be reached with respect to Group 2. If the information in this report indicates that group 2 can be deleted on the basis of the progress of the spearhead elimination program, group 1 can be deleted as the Japanese present only a minor problem. Group 3 is not expected to present insoluble problems. On the basis of the foregoing it would appear that there is not necessarily much distance between the Department’s position and that taken by the Chilean Government as set forth in the telegram under reference providing the Chilean liquidation report proves to [Page 579] be satisfactory. I have briefly discussed this with George Monsma of ES, and I believe he will draft a reply somewhat along the lines outlined above.

There appears to be no difference in policy or principle, our ability to go along with the Chilean request being subject to the information contained in the liquidation report being assembled by the Chilean Economic Controls Commission.

  1. Addressed to NWC: Mr. Flack; ARA; and A–Br.