825.00/6–1549: Telegram

The Ambassador in Chile (Bowers) to the Secretary of State

confidential
Priority

315. For Webb and Miller.1 President Chile talked with me at length June 14 re critical and delicate economic, political and social situation created by fall copper prices. Chilean Ambassador Washington telephoned him June 14 reporting drop copper to .16 cents, combination [Page 595] Republicans and Democrats pushing restoration excise tax2 which would automatically put Chilean copper at .14 cents, suspension activities on Anaconda copper 130 million dollar investment, and Anaconda’s instruction to Chilean subsidiaries to reduce production by 30 percent immediately (Embtel 312, June 143).

President recalled his successful fight against communism and for political stability in Chile during the last two years made possible because means for success were within his control. He lauded comprehension shown by US in making emergency coal shipments at critical moment of that fight. President begs US demonstrate equal comprehension at this time when situation is in his opinion far more critical than then and furthermore because copper price drop takes control situation out of his hands, placing it in hands of world events or US.

President said interests Chilean and American businesses and investments in Chile are identical in this crisis, and urges US recognize this identity interests. President pleads for strongest action to prevent passage excise tax which, if passed, would close all copper mines in Chile causing political and economic collapse. He also asks expediting existing loan applications and promptest possible implementation so that thousands of workers disemployed in copper mines may find work in industry. He urged immediate consideration loans to Chile for government low cost housing projects and for irrigation projects and cabinet meeting June 15 will consider formulation projects to be presented Exim Bank or International Bank. Such loans would have salutary effects on disemployed miners by giving large scale employment nearly immediately and by psychological effects of actually seeing cooperative work program between US and Chile thus countering Communist line that US drops its Latin American friends when they are not needed because of special US interests.

Having personally observed President’s successful fight against communism and for political and economic stability I thoroughly agree with President’s sentiments, do not believe seriousness of situation in this bulwark democracy can be exaggerated, and personally urge energetic and prompt consideration to find all ways and means prevent loss of ground which has been gained in Chile for democratic ideals.

Bowers
  1. At this time, Edward G. Miller had not entered upon his new duties as Assistant Secretary of State for American Republic Affairs; see the letter, dated July 8, from Ambassador Bowers to Mr. Miller, p. 599.
  2. The U.S. excise tax on copper, originally $.04 per pound, had been reduced by GATT to $.02 per pound. The tax had been suspended since 1947. It was not reimposed until July 1, 1950.
  3. Not printed.