Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

PE–42. Memorandum of Conversation, by the Officer in Charge of Peruvian Affairs (Poole)¹

Washington, May 3, 1960

SUBJECT

• Corro de Pasco Corporation vs.
• American Smelting & Refining Company.

PARTICIPANTS

• Fernando Berckemeyer, Ambassador of Peru
• Mr. Rubottom, ARA
• Mr. Coerr, WST
• Mr. Poole, WST/P

Ambassador Berckemeyer stated that President Prado and Prime Minister Beltran were very concerned about the possible consequences of the suit brought by Cerro de Pasco Corporation against American Smelting & Refining Company (AS&R), and that Beltran had asked him to call on Mr. Rubottom to express this concern, as well as the hope that this matter might be settled quietly. The Ambassador said that the suit concerned something that had happened some years ago and that publicity could result in the most terrible scandal, in addition to the fact that it would have grave consequences for both companies as well as American business in general, both in Peru and elsewhere in Latin America. Opposition elements would doubtless play on the theme that if these two American companies are capable of doing this to each other, what might they do to the Peruvians? Matters are made worse by the coincidence in timing with the present difficulties the International Petroleum Company is having over the La Brea y Pariñas Award. The Ambassador said that the danger of a publicity break was increasingly great. He referred to the recent articles in the American Metal Market and said that a good reporter could easily dig out the facts. Also, stockholders might demand information.

The Ambassador stated that he had talked both with the lawyer of AS&R and with Mr. Koenig, President of Cerro de Pasco, and that he had the impression that both companies were willing to negotiate, but that talks were stymied over AS&R’s demand that Cerro drop the suit and Cerro’s refusal to do so. He himself did not think dropping the suit was so vital since Cerro could simply continue to hold it in abeyance. He thought, perhaps that “outside” directors from each company (i.e. directors who are not company executives) might undertake the negotiation or preside over it.

Reverting to President Prado’s and Prime Minister Beltran’s concern, Ambassador Berckemeyer said he knew the Department had been talking to both parties, but asked whether the Department could again call them in to impress on them even more urgently the need for a settlement without publicity.

Mr. Rubottom replied that the Department was also very concerned about the potential consequences of this case and that it had by no means been idle in the matter. He mentioned that Mr. Dillon, Mr. Achilles, Mr. Hager, himself and certain others in the Department and Mr. Waugh had spoken to both parties on several occasions in order to point out the dangers and urge the avoidance of publicity.² He added that Ambassador Chapin was fully conversant with the matter. He said, however, that the Department had to be careful not to give the appearance of taking sides or prejudging the case. In the last talks he had had last week, he stated, he had been told that the parties were at least talking, which he thought represented some progress. Mr. Rubottom then asked whether the Ambassador had any confirmation that Henry Holland had been engaged as attorney for Cerro de Pasco.

Ambassador Berckemeyer (who had earlier reported to the Department that he had heard this was the case) said he could confirm the report. He said his original report came from a director of the company and that he had confirmation from an executive of the company.

Mr. Rubottom felt that Mr. Holland would be especially aware of the potential serious consequences of this case. He mentioned Mr. Holland’s present interests in promoting American investment in Latin America.

Ambassador Berckemeyer agreed.

Mr. Rubottom said he would explore the possibility of a renewed approach on the subject.³

1. Source: Department of State, Central Files, 823.25/5–360. Secret; Limited Distribution.
2. Memoranda of conversations on this subject are in Department of State files 211.2353-Cerro de Pasco and 823.75.
3. Ambassador Berckemeyer had mentioned to a Department officer in a previous conversation that he had some shares in Cerro. On that occasion he said that, while he had not heard from his Government about the dispute, Robert Koenig, President of Cerro, had given him a full rundown. [Footnote is in the source]