825.5045/11–1546
Memorandum of Conversation, by Mr. Alexander Schnee of the Division of North and West Coast Affairs
| Participants: | ARA—Mr. Briggs |
| A–Br—Mr. Smith | |
| NWC—Mr. Schnee | |
| ED—Mr. Havlik | |
| ED—Mr. Stenger | |
| ILH—Miss Roberts | |
| ILH—Mr. Horowitz |
The meeting was called at the suggestion of Mr. Smith in order to furnish ED and ILH with additional background on the Braden [Page 611] Copper Company strike in Chile and to bring them abreast of the most recent developments.
The principal concern of the Economic Divisions seems to be that in communicating to the Chilean Government the embarrassment in which the United States would be placed in considering Chilean requests for further loans at a time when an arbitrary settlement of the strike was proposed, the Department had taken a positive step which gave the appearance of prejudging the ultimate manner in which the strike would be resolved.
Mr. Havlik of ED expressed considerable concern that we have thrown a shadow of economic pressure over the Chilean Government in such a manner as to suggest intervention in a labor dispute which is a matter of internal concern in Chile. Mr. Havlik also was concerned over the fact that the Department had acted without sufficient discussions with Economic Divisions in the Department and the Eximbank.
The position of ILH, as expressed by Mr. Horowitz, was also one of concern over the action of the Department interpreted by Mr. Horowitz as threatening the Chilean Government with economic sanctions with regard to a labor matter he considers to be of purely domestic concern to the Chileans. Mr. Horowitz, as I understand his position, did not deem it appropriate for the Department to inject itself into the details of labor disputes, including such questions as the impact of a labor settlement on the financial position of an American company concerned. Mr. Horowitz also expressed the fact that we could not determine whether injury had been received by an American company unless we had determined the impact of a labor settlement on that company. Broadly speaking, his thesis is—
- (1)
- That the Department had no grounds to interject itself into this matter unless discrimination could be proven.
- (2)
- The factors involved in this case such as the operator being caught between the socialist and the communist, and the possibility of the arbitration panel being rigged in favor of one side or the other, conform to the general pattern of settlement of labor strikes in Chile in recent years. Therefore, there could be claim to neither discrimination nor inequity of treatment as compared with other foreign and domestic companies operating in Chile.
Mr. Briggs, when referring to the position set forth by Mr. Havlik, stated that he did not consider the refusal to grant a loan by the United States as a form of economic pressure. Mr. Smith raised the point with reference to the position stated by Mr. Horowitz that equality of treatment is not necessarily our criterion, and that what we claim for American interests abroad is fair treatment. In order to clarify the position of ARA and A–Br, the Department’s telegram No. 554 [544] [Page 612] of November 9 was read and reread. Mr. Briggs also mentioned the fact that Mr. Clayton had been kept informed of all pertinent developments. Mr. Havlik replied that he knew Mr. Clayton was informed, but that this did not mean that Mr. Clayton would write the necessary letter to the Eximbank asking for a postponement of action on the $10,000,000 loan now before the Eximbank.
It is my opinion that the Economic Officers departed entertaining the same doubts as to the efficacy and propriety of our action which they shared prior to this meeting.