825.5045/10–1747

Memorandum by the Assistant Secretary of State for Political Affairs ( Armour ) to the Secretary of State

confidential

. . . . . . .

With great effort the Department has obtained for Chile assurances of export licenses for October and November totalling 12 cargoes or about 108,000 tons. The Chilean Ambassador has been advised to exhaust every possibility of obtaining privately short term credits to finance these extraordinary coal imports since the Eximbank may be unable or unwilling to extend such a credit. At the same time the Department requested the Board of the Eximbank to do what it could to assist Chile in financing emergency coal imports.

On October 16 the Board agreed to authorize immediate advances up to $4,000,000 against the credit established for a Chilean steel mill to reimburse the Chilean Development Corporation for dollar expenditures it has made to date on this project from its own funds. The Development Corporation can turn over the dollars it thus will receive from Eximbank to the Chilean Government and the latter can thus pay for coal purchases immediately necessary. The Bank considers it important that its action be understood as exclusively related to the steel mill and not connected with Chile’s emergency needs of coal.

Norman Armour