The Acting Secretary of State to the Embassy in Chile
A–92. With respect to Embassy despatch No. 325, September 12, 1951,1 the Department approves the strong protests registered by the Embassy against the possible sale of copper to countries in the Soviet sphere. The Embassy is authorized to continue to make representations to the Chilean Government, if such action is necessary, to secure compliance with the commitment it accepted in the copper agreement of May 1951 with respect to its 20 percent of the production of the Amer-can companies, to wit: “that the copper not shipped to the US will be used by Chile or sold to other friendly countries only for their essential needs; that the Chilean Government will take all the necessary measures to assure that such copper will not be re-exported; and that no sales will be made to countries which are potential enemies or satellites of potential enemies”. Nevertheless, it is hoped that this particular problem is no longer acute and that the intervention of President González, as reported in Embtel 158, September 18,1 and in letter from Ambassador Bowers to Asst. Secretary Miller, September 21,1 has already been effective in blocking possible sales to countries under Soviet domination. The Embassy could then turn its efforts to the establishment of proper means of screening shipments and coordinating the efforts of the two governments to assure that the eventual consumption of copper produced in Chile will not benefit the iron-curtain countries.
A very real problem exists with respect to Chile’s disposal of her 20 percent within authorized channels. At present, in addition to the backlog produced by its failure to establish procedures for the export of the full 20 percent of the production of the American companies since May 8, the Chileans have claimed, in the International Materials Conference, the right to dispose of 27,000 additional tons for which it says decrees had been issued prior to the effective date of the copper agreement. The Embassy is requested to obtain accurate data on the production of the American companies between May 8 and August 31 (or later, if possible); the amount shipped by Chile as part of its 20 percent; and the balance still due Chile to complete its 20 percent. Verification of Chile’s claim to 27,000 tons is also requested. Withdrawal in a short period of time of such large amounts from the normal shipments to the US would have a serious effect on the US rearmament effort and jeopardize the continued acceptance of the agreement by the U.S. Upon receipt of the above information from the Embassy, the [Page 1289]Department will make an effort to space the shipment of Chile’s quota of copper so as not to interfere with the overall plans of the Office of Defense Mobilization.