825.2542/8–2950

The Assistant Secretary of State for Inter-American Affairs (Miller) to the Ambassador in Chile (Bowers)

confidential

Dear Mr. Ambassador: Receipt is acknowledged with thanks of your letters of August 4, August 11 and August 18.1

I have read with great interest your informative account of the dispute concerning the religious education bill now before the Chilean Congress and of events related thereto.

As regards the copper tax, at present writing, we are still waiting for the Senate to take up the scrap metal bill (S. 5327) to which Senator McMahon2 will introduce an amendment suspending the copper tax for one year.3 The amendment has a fair chance of approval by a vote on the floor of the Senate. I had lunch with Ambassador Nieto last week and went over this matter with him in detail. He has followed the course of the legislation very actively with the help of the Davies law firm4 which has been in close touch with Senator Danaher,5 the lobbyist for Revere Copper and Brass, who are extremely interested in continuing the exemption from the tax.6 Nieto was very complimentary of the Department for its work on this matter and congratulated us on the very favorable editorials in the New York Times, Washington Post and Washington Star, which we had a hand in recently. He said that he was completely satisfied that regardless of the outcome of the legislation the Department and the Embassy had done everything possible to secure a favorable outcome. He also admitted that the matter was of no economic consequence now that copper had gone up to 24 cents a pound, but that it was of psychological importance and of political importance to the President.

Nieto also seems to be resigned, as I think we all have to be, to the fact that it is going to be impossible permanently to exempt copper [Page 793] by special legislation from the regular statutory duty on copper. If we have this much trouble continuing the exemption for a year at a time when copper is in short supply and prices are soaring, it stands to reason that we cannot hope to keep the tax off permanently. Consequently, if we fail in our efforts in this session to continue the exemption for another year, we can at least have the consolation that the psychological blow to Chile will fall at the time when the Chilean economy can most easily absorb it and when Chile can most easily adjust to the reversion to the statutory rate of duty.7

[Here follow discussions of the naval sales program and of the Fifth General Assembly of the Pan American Institute of Geography and History.]

With my very best wishes,

Sincerely yours,

Edward G. Miller, Jr.
  1. None printed.
  2. Brien McMahon of Connecticut.
  3. That is, an amendment from the floor. On August 8, 1950, the Senate Finance Committee had rejected extension of the suspension (which had expired on June 30) by a vote of 9 to 4.
  4. Davies, Richberg, Beebe, Landa, and Richardson, attorneys for the Chilean Embassy.
  5. Former Senator John A. Danaher of Connecticut.
  6. In a memorandum of a conversation held March 30, 1950, between two officials of Kennecott Copper Corporation (Charles R. Cox, President, and Arthur Page, Director), Mr. Miller and Sheldon T. Mills, Director of the Office of North and West Coast Affairs, the latter had said in part:

    “Messrs. Cox and Page stated that because of the fact that they had important interests in the Western States Kennecott could not press for a continuation of the exemption of the two cent per lb. excise tariff on copper. At the same time they were very pleased to have the Administration take this stand. In the opinion of Mr. Page the two cent excise tax did not make much if any difference.” (825.00/3–3050)

  7. The text of President Truman’s letter regarding the imported copper excise tax, delivered to Ambassador Nieto August 31, 1950, and released to the press September 1, is contained in the Department of State Bulletin, September 18, 1950, p. 470.