825.5045/11–2846: Telegram
The Acting Secretary of State to the Ambassador in Chile (Bowers)
us urgent
570. Urtel 1041. Please elucidate what Pres meant informing you negotiations narrow to “one small legal point”.
Furthermore we find it difficult understand Chilean Govt’s apparent view that it is reasonable to put pressure on American company [Page 618] to force it to arbitrate points understood to be outside scope Chilean labor law and which only arise (according to admission of Chileans themselves) because of political pressure exerted by Communists. As matters stood yesterday company seems on firm grounds, but if it accepts arbitration these so-called extra-legal points it must then of course abide by results whatever they may be, and informal assurance that Govt arbitrator will “instantly strike out all the illegal points” understandably does not appeal to company as near so adequate as their deletion before arbitration. This is however of course a matter for business judgment of company.
Beyond foregoing, involving what we can do extend protection legitimate rights this important American company, we are greatly concerned at attitude attributed by Urtel to Pres misinterpreting our present position as “threat” as we assume you have already endeavored to make clear we have merely tried to point out in the most friendly and cordial manner the difficult and embarrassing position our Govt would inevitably face if it were alleged that at time when important American interests were endangered US Govt had made additional loans to Chile.
Cable follows re status tankers and commercial vessels.28