Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

390. Telegram From the Secretary of State to the Embassy in Chile¹

Washington, February 24, 1956—5:28 p.m.

355. Department extremely concerned by indications Embtel 472² Herrera considering possibility subsidize essential imports through penalty exchange rates or additional taxes on copper industry. Such discriminatory action by GOC would negate “new deal” copper law and mean GOC not keeping word which led Anaconda and Braden make recent new investments and Anaconda announce plan for further investments. Not overstatement to say most serious result would be discourage noticeable recent heightening private capital interest invest in Chile but also would affect considerations by US of such request as Chile may make for US aid.

If GOC believes will need to subsidize consumers of essential imports if exchange reform enacted and will need additional budgetary resources for that purpose, Embassy should urge that GOC seek non-discriminatory means to accomplish this.

Dulles

1. Source: Department of State, Central Files, 425.006/2–2156. Confidential; Priority. Drafted by Silberstein and approved by Holland.
2. Dated February 21. (Ibid.)