825.51/9–1349
Memorandum of Conversation, by the Chief of the Division of North and West Coast Affairs (Mills)
| Participants: | Sr. Felix Nieto del Rio, Chilean Ambassador |
| Mr. Miller, Asst. Secy, of State | |
| Mr. Mills, NWC |
The principal purpose of the Ambassador’s visit was to discuss the status of the Chilean loan application. Mr. Miller stated that he had been working night and day to push the matter along. He had just received a report from Mr. Malenbaum,1 in Mr. Thorp’s section of the Department, to the effect that the NAC working group might complete its study today or tomorrow, that the report would then be mimeographed, which would take a little time, then circulated to the staff of the National Advisory Council, and that a staff committee of the NAC would be gotten together as soon as possible to consider and act on the report. He added that the NAC staff was so busy this week with the annual meetings of the International Monetary Fund and the International Bank that a staff committee could not be gotten together [Page 602] before the beginning of next week, but he hoped that at that time such a staff committee would act without further delay.
The Ambassador said he had heard that the representatives of Commerce, the Federal Reserve and the Treasury on the working group are opposed to the loan. Mr. Miller replied that there is some opposition, it is true, and, in fact, a SEC observer on the NAC staff, whose house he is sharing, expressed opposition to the loan stating he is not convinced that Chile’s dollar position is as bad as has been represented. Mr. Miller added that he had convinced his friend from the SEC that a loan to Chile is absolutely necessary. Mr. Mills stated he had been informed that there has been some feeling in the Treasury that the type of loan requested by Chile is more properly a stabilization type loan and therefore a matter for Treasury consideration and action rather than for action by the Eximbank; he added that according to his information the Treasury probably will agree, however, that the powers of the Eximbank are broad enough to make such a loan.
The Ambassador was not told anything regarding the probable amount of the loan which, if not changed, will be recommended by the working group, namely $15 millions before the end of this year to be available quite readily and $10 millions next year “if” the balance of payments situation of Chile then requires it. This compares with $50 millions which is the figure which Roberto Vergara has tentatively suggested.2
[Here follows brief discussion of Chilean desire to make a purchase of airplanes3 and other material.]
- Wilfred Malenbaum, Chief of the Division of Investment and Economic Development↩
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In telegram 325, October 7, to Santiago (not printed), the Department transmitted the text of a press release announcing, on October 8, the Eximbank’s authorization of a $25 million credit to Chile to assist in financing Chile’s 1949 imports of U.S. equipment, materials, and services essential for the continuation of Chilean economic development; $15 million was to he made available immediately, with additional advances of $10 million to be made as and if needed (811.516 Export-Import Bank/10–749).
On October 28, the Eximbank also announced authorization of a $2.75 million credit to the Chilean Corporacción de Fomerito de la Producción, an autonomous government-owned corporation designed to stimulate general economic development, for use in developing an iron ore deposit owned by a subsidiary of Bethlehem Steel Company (811.516 Export-Import Bank/10–2749).
↩ - On October 6, in telegram 507, from Santiago (not printed), Ambassador Bowers recommended that the Department of State approve the issuance of an export license for the purchase of the planes. On the following day, the Department, in telegram 330, to Santiago (not printed), replied that it would issue the necessary license if the purchase should be consummated, adding that it considered such a large, unproductive expenditure during a period of acute dollar shortage in Chile a move of doubtful wisdom (711.00111 Licenses/25).↩