811.20 Defense (M) Colombia/14: Telegram

The Secretary of State to the Ambassador in Colombia ( Braden )

538. Following from Metals Reserve:

“Reference is made to telegram no. 610, dated December 473 from the Embassy and to telegrams nos. 460 and 480 dated December 4 and 9 from the Department bearing on the subject of platinum.

Representatives of the largest Colombian producer of platinum, the South American Gold and Platinum Company, have shown concern over reports that the Colombian Government may issue decrees requiring all producers of platinum to sell their production to the Bank [Page 54] of the Republic. Previous telegrams on this subject as well as the text of the agreement sent by the Metals Reserve Company to the Bank of the Republic simply provide that the Metals Reserve will purchase all platinum produced in Colombia and not sold through private channels to the United States.

It does not appear necessary for the production of the South American Gold and Platinum Company to be included in the proposed contract between Metals Reserve Company and the Bank of the Republic since the South American company has satisfactory arrangements with private consumers in this country under which the use of the product can be controlled for defense purposes if necessary. In addition, Metals Reserve does not wish to have to pay the proposed subsidy price of $38 an ounce for this company’s very substantial production, which is understood to amount to two-thirds of that of the entire country.

It is believed that the Colombian Government can establish satisfactory control of the platinum situation without forcing all sellers to sell to the Bank of the Republic through requiring registration along the same lines as in the case of gold sellers. If this is done and if sellers are required to obtain satisfactory letters of credit from United States bank before being permitted to export, continued sales through private channels should be feasible. Metals Reserve Company will, of course, continue to be prepared to purchase platinum not sold to the United States through private channels, provided only the necessary export regulations are put into effect.[”]

Charge Metals Reserve.

  1. Not printed.