825.6374/7–1246
The Acting Secretary of State to the Chilean Ambassador ( Mora )
The Acting Secretary of State presents his compliments to His Excellency the Ambassador of Chile and has the honor to acknowledge receipt of his memorandum dated July 12, 1946 presenting the interpretation given by the Government of Chile to the letter written by the then Secretary of State of the United States to the Minister of Foreign Affairs of Chile at Mexico City on March 5, 1945.59
At a meeting between the Ambassador of Chile and Assistant Secretary of State William L. Clayton on July 26, 1946, Mr. Clayton set forth the official views of this Government. Representatives of the War Assets Administration were present at the meeting.
This Government concurs in the view of the Chilean Government that the letter of March 5, 1945 does in fact commit the United States Government to consult with the Chilean Government before taking final action on the disposal of its synthetic nitrate plants to private [Page 638] interests. The disposal of four plants without prior consultation is sincerely regretted.
As the Ambassador of Chile was informed on July 26, 1946, this Government is prepared to consult with Chilean Government prior to the disposal of all of the remaining plants, but the period for consultation on the Lake Charles plant could not be extended beyond two to three weeks from that date. At that meeting, the Ambassador of Chile was given the proposed terms of lease of the Lake Charles plant.
This Government is prepared to make available to the Government of Chile all pertinent information with respect to the four plants already disposed of, and the Lake Charles plant as well. In this connection, it should be noted that members of the Chilean Embassy received the terms of lease or sale and the details of cost appraisal of three plants on July 3, 1946 and were invited to be present at the opening of bids for two others. The documents were classified as confidential.
It is pertinent to refer to this Government’s views, expressed by Mr. Clayton, concerning the nature of the consultation required in advance of disposal of plants. The consultation to be had with the Chilean Government is with a view to preventing unfair competition with the Chilean nitrate industry which might arise if the terms of sale or lease should in fact constitute a subsidy. Should it be the considered judgment of this Government that terms in a given instance do not constitute a subsidy, this Government would not be precluded by the letter from disposing of the plant in question, once consultation had been held.
In conclusion the Acting Secretary of State desires to assure the Chilean Ambassador that this Government will continue to approach the problem of nitrate plant disposal in a spirit of sympathetic interest and sincere cooperation.