310. Telegram 6062 From the Embassy in Peru to the Department of State1

6062. Subj: Marcona Expropriation—Ambassador Speaks with Foreign Ministry Officials.

1. During National Day Ceremonies, Ambassador had opportunity to discuss Marcona expropriation with Foreign Ministry Secretary General Garcia Bedoya and make brief mention of problem to Foreign Minister de la Flor at ceremonial function. Ambassador asked for [Page 839] appointment to discuss problem and all its implications and Secretary General agreed to meeting today, July 30 (time to be determined). Although Foreign Minister is unavailable today (he is in San Jose) he agreed to meeting tomorrow.

2. During conversation with Garcia Bedoya, Ambassador pointed out urgency of establishing orderly process for determination of compensation. He referred to letter he had written to then Acting Foreign Minister Richter (Lima 5979) and danger to continued good and improving relations between two countries as result of expropriation without compensation, citing intense Washington interest in this problem and semi-automatic nature of certain USG legislative and administrative requirements. Ambassador also referred to Mines Minister Fernandez Maldonado’s speech (Lima 6043) at Marcona, which requires clarification by the GOP. Ambassador pointed to strong political tone of speech which raised serious questions, not only with regard to Marcona’s rights to plead its case (through its Peruvian lawyers, etc.) But also to rights before Peruvian law of multinational firms generally. Ambassador referred to important implications of this speech to all present and prospective foreign investors in Peru and to future activities of private banks and international lending institutions in this country. All these points need urgent clarification. Garcia Bedoya said he understood the problem thoroughly and agreed something must be done. Ambassador noted that Acting Foreign Minister’s advance warning had helped to forestall strong instructions from Washington, but that this would be inevitable unless orderly compensation procedures were established immediately.

3. Comment: We are pushing for these promised appointments and have also requested appointment with Prime Minister Morales Bermúdez regarding this matter.

  1. Summary: Dean reported that he had impressed upon García Bedoya the importance of compensation for the expropriation of the Marcona company’s holdings in Peru.

    Source: National Archives, RG 59, Central Foreign Policy File, D750263–0170. Limited Official Use; Immediate. On July 23, Richter informed Dean of the impending expropriation. On July 24, Dean informed Garcia Bedoya of the importance of compensation for Marcona. Dean informed the Department he would write a letter to Richter regarding compensation. (Telegram 5979 from Lima, July 24; ibid., D750255–0990) Although there is no indication Dean discussed the matter with Morales Bermúdez, the Ambassador left a copy of his letter to Richter with Morales Bermdez’s principal aide, and the aide informed Dean that he would raise the matter with Morales Bermúdez. (Telegram 6101 from Lima, July 31; ibid., D750264–1011) On August 4, Dean discussed the expropriation with de la Flor. Dean reported that de la Flor “is now fully aware of the dire implications of the Marcona problem and seems to be seized with the need to begin serious negotiations to resolve it.” (Telegram 6244 from Lima, August 5; ibid., D750269–0205)