The Secretary of State to the Embassy in Chile 1


349. No distribution outside Department. From Assistant Secretary Miller. Defense Mobilizer Wilson convened top level conference this morning at which Thorp, Brown and I present for Dept to discuss extremely critical copper situation. Requirements defense program such that US estimated to have 60,000 ton deficit first two quarters this year. As one possibility acquiring additional copper suggestion was put forward by some officials present at meeting that US shld consider offering Chile higher prices than 271/2 cents per pound for part of Chile’s retained 20 percent of US cos production. Depts reps strongly discouraged this idea on ground 1) that polit situation re copper so touchy in Chile that any move along this line might upset present relatively satisfactory copper agreement and 2) we cld probably not obtain enough copper to make any appreciable impact our shortages so as to warrant taking risks which we foresaw in Chile.

Our recommendation was that best course for us wld be to encourage increased production by US cos in Chile and that to this end we shld try to get Chile Govt to adopt soonest necessary laws and regs re revised tax and exchange treatment for copper cos.

We will have another meeting next week with reps Kennecott and Anaconda to discuss these problems in greater detail. Tele immed your estimate chances enactment laws re tax and exchange treatment and [Page 670] whether there is anything Emb can do to expedite. Also any gen observations you may have re possibility obtain additional Chile copper.

Since defense production officials virtually keeping track each ton of copper produced in free world Emb is requested for next few months supplement its already excellent reporting re copper situation by forwarding detailed current info Chile copper situation in gen.2

  1. Drafted and signed for the Secretary by Mr. Miller.
  2. In telegram 392, from Santiago, dated Jan. 28, 1952, Ambassador Bowers suggested that one possible way to obtain more copper from Chile was to amend the United States–Chile copper agreement of 1951 to enable the United States to purchase 90 percent rather than 80 percent of the total Chilean production. He also stated that the Embassy did not see any way that it could “effectively enter picture with govt to seek early enactment tax and exchange law.” (825.2542/1–2852)