CHILE PROPOSED TREATY OF FRIENDSHIP, COMMERCE AND CONSULAR Rights BETWEEN

THE UNITED STATES AND CHILE

Date and number

Subject

Page

1927 Aug. 19

(765)

517

519

Oct. 6

(146)

520

Oct. 14

(52)

523

Oct. 24

(161)

To the Ambassador in Chile

Instructions to ascertain whether Chile is disposed to enter
into a general treaty of friendship, commerce and consular
rights, providing for unconditional most-favored-nation treat-
ment.
From the Ambassador in Chile (tel.)

Report that Foreign Office officials indicated the possible
exception of both Bolivia and Peru from most-favored-nation
treatment, and that they desire the submittal of a draft treaty
on the general lines of the U. S.-German commercial treaty of
December 8, 1923.
To the Ambassador in Chile (tel.)

Detailed instructions for preparing a draft treaty on the
basis of the German treaty; advice that the Department is
studying the exception of Bolivia and Peru.
From the Ambassador in Chile (tel.)

Request for instructions as to whether or not to present
draft treaty to Foreign Office.
To the Ambassador in Chile (tel.)

Request for opinion whether the negotiations would be prej-
udiced if submittal of draft treaty were postponed until the
middle of November in order that Department may give
further consideration to the question of including substance
of Senate reservation regarding national treatment of shipping.
From the Ambassador in Chile (tel.)

Opinion that postponement is desirable and will promote
ultimate success.
To the Ambassador in Chile

Transmittal of draft treaty for presentation to Foreign
Office, with explanation of the more important differences be-
tween the draft and German treaty, for information and use
in discussions with Chilean officials; instructions not to present
draft until Department so advises.

523

Oct. 27

(56)

523

Oct. 30

(164)

524

Nov. 2

(788)

REPRESENTATIONS TO THE CHILEAN GOVERNMENT REGARDING PROPOSED LEGIS

LATION FAVORING CHILEAN MERCANTILE MARINE

1927 Aug. 22

(109)

526

From the Ambassador in Chile (tel.)

Request for specific instructions concerning Grace Line's desire that Ambassador make informal representations to Chilean Government against the injury likely to result to co mercial interests by reason of a plan for preferential customs duties on importations in national vessels, now under consideration by a Chilean commission, for the purpose of promoting a national merchant marine,

REPRESENTATIONS TO THE CHILEAN GOVERNMENT REGARDING PROPOSED LEGIS

LATION FAVORING CHILEAN MERCANTILE MARINE-Continued

Date and number

Subject

Page

1927 Aug. 25

(111)

527

528

Aug. 30

(115)

528

Aug. 31

(37)

529

Sept. 1

(118)

From the Ambassador in Chile (tel.)

Synopsis of proposed shipping law, which provides for (1)
repayment of Panama Canal tolls, (2) premium to shippers of
nitrate in Chilean vessels, (3) 10 percent reduction in customs
duties on imports in Chilean vessels, (4) loans to Chilean com-
panies for the purchase of new vessels, (5) effective date of
January 1, 1928; desire of Grace Line manager that protest be
made, especially with regard to points (1) and (2); request for
instructions.
From the Ambassador in Chile (tel.)

Information that a project of law embodying all points except
point (2) has been submitted to Congress; renewal of request
for instructions.
To the Ambassador in Chile (tel.)

Belief that objection may properly be made to point (3) and
also to preferential export duties or bounties if measures such as
those contemplated in point (2) are brought up again; instruc-
tions to try to dissuade Chilean Government from applying
these contemplated discriminatory measures; instructions to
discuss point (1), indicating that the United States would view
with concern any step which would tend to substitute for the
present regime of equality in the use of Canal one of special
advantage; information that Department has no objections
to point (4).
From the Ambassador in Chile (tel.)

Information that proposed law omitted point (2) because
section 17 of nitrate law already empowers the President to pay
bounties to producers who ship in Chilean vessels.
From the Ambassador in Chile (tel.)

Opinion that a possible tariff reduction under discussion, as
well as the proposed shipping law, would stimulate American
export trade at least until Chile purchases new ships and estab-
lishes services to Europe; assumption that in spite of this
consideration, Department wishes Ambassador to comply
with its telegram No. 37 of August 31.
To the Ambassador in Chile (tel.)

Instructions to continue efforts to dissuade Chilean Govern-
ment from applying discriminatory import duties in favor of
national vessels and bounties provided under section 17 of the
nitrate law; request for information as to whether contem-
plated payments of 7 pesos per metric ton to Chilean ships for
nitrate carried to the United States, Canada, and Cuba, would
be made to shippers or shipowners.
From the Ambassador in Chile (tel.)

Issuance by the President of a decree under sections 17 and
33 of nitrate law, to become effective upon official publication,
providing specific bounties for nitrate shipments, according to
destination; information that the bounty is to be paid to ship
and not to producer, and request that this point be corrected
in telegrams Nos. 111 of August 25, and 118 of September 1.

530

Sept. 2

(120)

531

Sept. 14

(41)

532

Sept. 17

(133)

REPRESENTATIONS TO THE CHILEAN GOVERNMENT REGARDING PROPOSED LEGIS

LATION FAVORING CHILEAN MERCANTILE MARINE-Continued

Date and number

Subject

Page

1927 Sept. 20

(136)

532

533

Sept. 21

(141)

534

Oct. 28

(163)

From the Ambassador in Chile (tel.)

Report of discussions with Chilean officials and diplomatic
colleagues concerning the ship subsidy bill; opinion that before
final passage, Canal tolls provision, and possibly preferential
duties and bounties, will be stricken out and will be replaced by
a provision for lump sum subvention to companies.
From the Ambassador in Chile (tel.)

Report of further representations; opinion that ship subsidy
law will either be redrafted or replaced by a substitute law
granting lump sum subvention or payments for maintenance
service on designated routes.
From the Ambassador in Chile (tel.)

Synopsis of substitute ship subsidy bill, providing for (1)
subventions to Chilean companies which have maintained a
regular service through the Canal, (2) share by Government
in profits and management, (3) loans for the purchase of new
ships, (4) 10 percent increase in consular duties to cover ex-
penses occasioned by this law, (5) effective date, January 1,
1928; opinion that new bill is unobjectionable, but request for
instructions.
From the Chargé in Chile (tel.)

Information that Congress will convene in special session
November 15 and that Chargé has renewed representations
concerning effect on American interests of the proposed legisla-
tion and tariff revision.
To the Chargé in Chile (tel.)

Instructions to advise appropriate authorities that the enact-
ment of shipping or tariff legislation discriminatory to American
ships will eliminate the only basis on which the President is
empowered to continue in suspension the U. S. law providing
for a discriminatory duty of 10 percent on goods imported in
foreign ships.
Memorandum by the Secretary of State

Conversation in which the Chilean Ambassador advised that
his Government intends to abandon plan for discriminatory
duties and refund of Canal tolls, and stated that if any shipping
legislation is enacted, it will probably be in the nature of
a straight subsidy.

535

Nov. 9

(172)

536

537

REPRESENTATIONS TO THE CHILEAN GOVERNMENT REGARDING EFFECTS OF

PROPOSED COAL LAW ON AMERICAN INTERESTS

1927 Sept. 1

(119)

537

From the Ambassador in Chile (tel.)

Receipt by Chilean Congress of a proposed law to aid the
coal industry, which includes a provision for heavy increased
duties on coal and crude petroleum.
To the Ambassador in Chile (tel.)

Instructions to make informal representations against enact-
ment of proposed law, because the heavy progressive duty on
oil will injure American copper interests in Chile.

538

Oct. 10

(50)

REPRESENTATIONS TO THE CHILEAN GOVERNMENT REGARDING EFFECTS OF

PROPOSED COAL LAW ON AMERICAN INTERESTS-Continued

Date and number

Subject

Page

1927 Oct. 19

(151)

538

539

Nov. 1

(58)

539

Nov. 2

(168)

From the Ambassador in Chile (tel.)

Assurance to Foreign Office by Minister of Hacienda that he
will make changes in the law which will save American inter-
ests from injury.
To the Ambassador in Chile (tel.)

Instructions to investigate and report status of the coal bill,
in view of information from American interests that Chilean
Government is paying little attention to protests made by their
representative in Chile, and recent approval of the measure by
the Joint Committee of the Chilean Congress.
From the Ambassador in Chile (tel.)

Information that Chilean Government shows unwillingness
to modify the proposed measure, but that Ambassador has
made further representations and will take additional steps
immediately.
From the Chargé in Chile (tel.)

Passage of coal bill by Chamber of Deputies, November 15.
From the Ambassador in Chile (tel.)

Continued efforts to secure modification of proposed law;
understanding that, as a mark of good will, the President may
be authorized to suspend or modify application of the law, if
in his judgment wise; Foreign Office assurance that the entire
situation will be thoroughly studied.

(Footnote: Information that the coal law was signed by the President on January 9, 1928.)

540

Nov. 16

(176) Dec. 10

(1

540

REPRESENTATIONS TO THE CHILEAN GOVERNMENT REGARDING EFFECTS OF PRO

POSED INSURANCE LEGISLATION ON AMERICAN INTERESTS

1927 May 5

(19)

541

May 13

(64)

542

To the Ambassador in Chile (tel.)

Instructions to inquire of Foreign Office concerning Finance
Minister's intention to nationalize insurance, thereby elimi-
nating foreign companies, and to advise Department as to extent
to which proposed measure appears to be confiscatory.
From the Ambassador in Chile (tel.)

Informal representations to Foreign Minister both prior and
subsequent to receipt of Department's telegram No. 19 of
May 5; opinion that project does not appear to be confiscatory
except in the respect that it destroys property rights by pro-
hibiting the continuance of a business which was established
in the past at considerable expense.
From the Ambassador in Chile (tel.)

Advice that the insurance bill, modified and made more
drastic, has been sent to Congress; information that revised
bill permits foreign companies now doing business in Chile to
reorganize as national companies, and that section 59 imposes
a heavy tax, as well as fines for failure to pay such tax, on
policies taken out in foreign companies by foreign owners of
property in Chile; request for instructions.

543

Aug. 1

(97)

REPRESENTATIONS TO THE CHILEAN GOVERNMENT REGARDING EFFECTS OF

PROPOSED INSURANCE LEGISLATION ON AMERICAN INTERESTS—Continued

Date and number

Subject

Page

1927 Aug. 8

(31)

545

Sept. 12

(129)

545

546

Sept. 14

(42)

546

Sept. 19

(135)

To the Ambassador in Chile (tel.)

Belief that protest may not be made on grounds of violation
of international law; suggestion that Ambassador may wish to
urge the elimination of article 59 because it would interfere
with free and mutually beneficial intercourse between the
United States and Chile.
From the Ambassador in Chile (tel.)

Information that Joint Committee has sent amended bill
to Chamber of Deputies; understanding that foreign com-
panies will be permitted to function, without reorganizing as
national companies, on condition that they invest in easily
liquidated Chilean securities or property and pay a tax on
premiums 50 percent greater than the tax paid by national
companies, and that article 59 has been modified and renum-
bered 46; request for instructions as to possible protest against
the taxation.
To the Ambassador in Chile (tel.)

Advice that Department can perceive no good basis for a
protest.
From the Ambassador in Chile (tel.)

Belief of most insurance agencies that the requirement of
increased deposits and heavier taxes, even though discrimina-
tory, will be offset by a large increase in business and profits.
From the Ambassador in Chile (tel.)

Information that insurance bill will come before Senate
when special session of Congress opens about October 6; request
for instructions whether Department's attitude toward protest
would be affected by the legal contention that if insurance
contracts on personal property can be taxed, other contracts
affecting personal property, such as mortgages and assign-
ments, can also be taxed.
To the Ambassador in Chile (tel.)

Advice that no ground exists for formal protest because of
lack of discrimination against American firms; authorization
to urge informally that the provision be eliminated because it
would interfere with business between the two countries.
From the Chargé in Chile (tel.)

Passage by Senate, November 16, of bill with modifications
which are reported to be acceptable to foreign companies;
amendment of article 46 to permit insurance of properties in
Chile with local branches of foreign insurance companies, or,
if the risk is unacceptable, to permit the local companies to
place the insurance abroad without being subject to tax.
From the Ambassador in Chile

547

Sept. 21

(138)

547

Sept. 27

(47)

548

Nov. 17

(179)

548

Nov. 29 (1256)

59 Prometage mobbin by Chamber of Deputies, November 23, with

minor change; information that the amendment of article 46
reported in telegram No. 179, November 17, eliminated the
most harmful feature of the bili as far as the foreign companies
are concerned.