800.8820/1008

The Ambassador in Peru ( Norweb ) to the Secretary of State

No. 5985

Sir: I have the honor to inform the Department regarding the course of continued discussions with Finance Minister East concerning the use of Peruvian ocean carriers in the United States trade.

Mr. East did not modify his position that chartering is unacceptable,1 but reiterated Peru will place two vessels in this trade on a permanent basis without diverting them for other uses. They will be [Page 713] under the direct administration of the Peruvian Steamship Company which is owned by the Government. He expressed no further interest in importing wheat from the United States. Other Peruvian and foreign bottoms will be used for the Argentine trade.

The Minister was in possession of a telegram from the Peruvian Embassy in Washington indicating 6,500 tons of wool had been tentatively spoken of as a satisfactory amount to consider. This sum differs from his previous estimate of 700 to 800 tons which evidently represented only alpaca wool. In any case the 6,500 tons were described as of the 1943 clip and is the amount Peru desires to ship in 1943. This quantity does not include a 2,500 ton carry-over from 1942 which the Minister believes can be disposed of in markets outside the United States.

A summary of the Minister’s views was reported in telegram No. 133 of January 28, 5 p.m., 1943,2 to which the Embassy added its recommendation that the amount of admissible wool be diminished proportionally to his reduction from four to two vessels. Mr. East resisted the suggestion regarding the proportional decrease for wool; remarked it might be best to sell the wool in Mexico, whence inquiries had been received; and observed that the entire problem had been disposed of in our last conference. He even ventured that in the future it would be convenient to have the statements of the American Government in writing so that there could be no question of what was previously said.

After reminding him there is no misunderstanding, that negotiations are impossible if one of the participants insists on the adoption of his entire program without considering the desires of the other, we finally agreed heartily the only difference consists of Mr. East’s pressure for the maximum amount of wool while the American authorities were endeavoring to obtain as many vessels as possible.

He requested that the American Government assign a reasonable percentage of space for such cargo as the Peruvian authorities should desire to ship northward and agreed to the reasonableness of a similar provision regarding southbound cargo of interest to the United States. He based his request for space reservation on information regarding the arrangement with Argentina and could see no reason why similar treatment could not be given Peru, even though Argentina had accepted the charter provision and Peru will not.

He expressed the desire that the United States afford the customary facilities extended to Allied ships in war time.

Presumably the next move will be taken in Washington, but should any new developments occur in Lima, the Department will be informed promptly.

Respectfully yours,

R. Henry Norweb
  1. The Ambassador had reported in his despatch No. 5758, January 5, 1943, that Peru opposed chartering because it considered her vessels as the only independent tie to the outside world, and regarded W. R. Grace and Company as dominated by the War Shipping Administration (800.8820/929). However, in his despatch No. 5709 of December 31, 1942, the Ambassador had noted Peru’s willingness to allow chartering her vessels on the condition that the United States agree to purchase 700 to 800 tons of surplus wool and to provide certain gold mining supplies (800.8820/917).
  2. Not printed.