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  4. Document 419

911.5325/9–2850: Telegram

The Ambassador in Chile (Bowers) to the Secretary of State

restricted
Santiago, September 28, 1950—7 p. m.

143. Grace officials today orally reached following pooling arrangement within conference structure with CSAV to be confirmed in writing (Embtel 141 September 27)1 for division such south bound cargo from US to Chile as is carried by both Grace and CSAV: for east coast trade 50 percent each; for Gulf Coast trade 35 percent for CSAV but CSAV must provide service to carry this as a minimum; cap coal to be included in CSAV percentage; CSAV to have as additional compensation 25 percent of northbound copper. This agreement subject to two conditions: approval by US Federal Maritime Board2 and elimination by Chilean Government of import permit stamping requirement as applied to Grace.

Grace officials feel they have had to make a tough deal because of weak US bargaining position, but in circumstances believe it is best [Page 798] they could do and a bit better than they thought yesterday they could get.

If Department agrees, Embassy will now look to Chilean Government provide necessary formal assurances re stamping requirement.3

Bowers
  1. Not printed.↩

  2. On May 14, 1951, the Federal Maritime Board dismissed complaints entered by two Danish-owned operators (West Coast Line, Inc., and Rederiet Ocean A/S) against the formal pooling agreements which resulted from these negotiations. The Board held in part that the agreements did not violate the Shipping Act of 1916 (39 Stat. 728) as amended. Text of its ruling is filed under 911.5325/2–951.

    In telegram 10 to Santiago, July 9, 1951, the Department stated the FMB had approved the pooling agreements on July 6. (911.5325/7–951)

    In airgram A–100, October 5, 1951, the Department instructed the Embassy in Santiago to inform the Chilean Government that approval of the pooling agreements by the FMB was an action taken in accordance with the Shipping Act of 1916 and did not reflect a change in U.S. policy. (911.5325/10–551)

    ↩
  3. The Department, in telegram 90 to Santiago, September 29, 1950, agreed the Embassy should continue its efforts to obtain assurances the stamping requirement would be rescinded. (911.5325/9–2850) No indication has been found in Department of State files that Chile complied with this request.↩