811.20 Defense (M) Chile/217: Telegram
The Secretary of State to the Ambassador in Chile ( Bowers )
865. For Graham from Metals Reserve. Your cable July 24,77 under terms Over-all Agreement only question now open is review of prices and we believe discussions should be confined strictly to price changes or matters related directly thereto such as sack charges, freights, delivery points, etc.
While not wishing finally to close door on question of gold mines and while requesting your further views on this subject present reaction of agencies here including State Department is adverse to any change. Incidentally feel it would be very embarrassing if further encouragement given and then export of equipment and supplies prohibited [Page 61] for gold mines which seems most likely. State Department also communicating with Embassy on this gold ore question.
Although we ask you do not make final commitment for moment believe we can gain acceptance here of points you have said you would recommend if this would settle the matter but prefer if possible omit Los Vilos as acceptable port as impossible under present shipping conditions to arrange vessels call at minor ports and we would thus either have to pay higher local transshipment to larger ports or leave stocks there until end of war.
Assume you have definitely disposed of Chilean proposals 4, 5 and 6 and assume from your letter 170 you consider proposal number 3 impractical. [Metals Reserve.]