Memorandum of Conversation, by the Chief of the Division of North and West Coast Affairs (Mills)

Participants: Señor Felix Nieto del Rio, Chilean Ambassador
Mr. Armour, Assistant Secretary of State
Mr. C. Tyler Wood, Deputy to Assistant Secretary of State for Economic Affairs
Mr. Mills, Chief of NWC

The Chilean Ambassador stated that Mr. Mardones of the Chilean Nitrate Sales Corporation, who is now in Washington, may raise with the Eximbank the question of a loan to Chile of from $20 millions to $22 millions1 for the purpose of increasing Chilean nitrate output beyond the present 1,500,000 tons per year. He said it has been estimated that construction needed would take 20 months and would involve improving the port facilities of Tocopilla.

He asked the reaction of Mr. Wood who said before expressing an opinion he would wish to study detailed plans. He added that in view of the great shortage of nitrates some of the European countries were planning to reconstruct their factories and the question of an eventual surplus should not be ignored.

The Ambassador said one consideration is that new facilities would permit the abandonment of high cost Shanks process plants putting Chile in a position to compete when the present abnormal demand subsides.

Mr. Mills asked if the proposal had been discussed with Guggenheim representatives, owners of the Pedro de Valdivia and Maria Elena plants. The Ambassador replied that all the nitrate interests of Chile were together on the project.

Mr. Mills also asked whether anything had occurred with respect to proposals to increase Chile’s copper production. The Ambassador pointed out that the Chilean Congress had eliminated the emergency 20 percent export tax on copper from the new budget, and this action should reassure the copper companies regarding the attitude of the Chilean Government.

  1. An analysis, dated April 9, not printed, of a report of the Export-Import Bank covering the six-month period ending December 31, 1947, indicated that of the $206,731,000 of undisbursed authorizations of the Bank for Latin America, Chile’s share was $43,622,000 (811.516 Export-Import Bank/4–948).