535. Editorial Note

A letter from C. Douglas Dillon to Ambassador Achilles, dated June 18, informed him that the administration had decided to recommend the enactment of new excise taxes on lead and zinc. Dillon further stated that at the interagency discussions leading to the presentation of the program, the Department of State had pointed out the serious foreign policy implications of the recommended actions, but “in an effort to relieve the difficulties experienced by domestic lead and zinc mines due to low prices the Administration generally decided to support the Department of the Interior proposals.” Dillon closed the letter with the comment that he knew Achilles would have a difficult problem explaining the action to the Peruvian Government and the American mining community in Peru. (Department of State, Central Files, 411.006/5–2857)

Telegram 97 from Lima, August 3, reported that the Peruvian press was devoting major attention to the issue of United States lead and zinc duties. It reads in part: “Normally highly pro-US La Prensa leads paper with stories on house hearings and probable termination stockpiling. Inside are leading editorials referring to ‘mortal blow’ to Peruvian economy, questioning reality of ‘good neighbor policy’, emphasizing harm tariff increases will do to US-Latin American trade and political relations and expressing pain that Department favors them.” (Ibid., 411.004/8–357) Despatch 112 from Lima, August 6, reported further Peruvian press comment on the increase in lead and zinc tariffs. The Embassy considered it certain that if Congress approved lead and zinc tariffs damaging to Peru, the United States would lose at least part of the goodwill it had gained during the drought. Congressional debate had already provided Communist and other anti-United States elements in Peru a chance to denounce United States motives in the economic field. (Ibid., 411.234/8–657) Telegram 149 from Lima, August 17, informed the Department that adverse reaction to the proposed increase in lead and zinc tariffs [Page 1077] continued to grow daily. It reads in part: “Most unfortunate aspect is that Peruvians are increasingly convinced that both our good neighbor and commercial policies are fair weather ones which we are prepared to abandon when they come into conflict with material interest of any powerful US element. This is doing us serious damage on political plane and may well have long-term adverse political effects as well as bringing about retaliatory commercial action against US products.” (Ibid., 411.004/8–1757)