The Ambassador in Chile ( Bowers ) to the Secretary of State
[Received 3:40 p.m.]
1038. Minister of Finance Ramírez and officials of Chilean Nitrate Sales Corporation informed Economic Counselor39 last night that Corporation’s representatives in U.S. had been formally notified by FEA that all negotiations for further purchase of nitrates would be discontinued. Ramírez manifested great indignation and surprise at such action and expressed hope that it did not reflect official policy of U.S. Govt. He stated some 90,000 metric tons of nitrates had been shipped to U.S. since June 30 on strength of assurances received from WSA40 to effect that one million tons would be purchased during next contract year and that necessary space had been allocated.
Ramírez and Corporation officials said that shipments had been made without agreement as to price relying on good faith of U.S. and that FEA action was grossly unfair and contrary to previous assurances.
I strongly feel that failure to negotiate new sales agreement on fair basis will precipitate economic crisis here and seriously endanger good relations with this country. I therefore urge that drastic action reportedly taken by FEA be immediately reconsidered.