conda, Copper Corporation. It was agreed that the problem was two-
fold. First, the question of control over shipments of raw copper,
principally in bar or ingot form, to the Argentine market to the end
that this copper would not reach the hands of pro-Axis entities. The
unanimous opinion regarding this feature was that Anaconda should
continue to make sales only from New York and that these would re-
ceive the approval of the Embassy in Buenos Aires through their local
representative before they were consummated.
   The second factor has to do with the sales in Argentina of Chileanr
 semi-manufactured copper by the Fa'bricas y Maestranzas del Ej'rcito
 de Chile (Chilean Army Workshops). The practice in brief is as fol-
 lows: By Chilean law the North American producing companies in
 that country are required to sell in Chilean pesos the copper needed by
 domestic industry. Presumably this means for domestic consumption.
 Consequently, the Chilean Army Workshops are able to buy from
 Anaconda and probably from Braden Copper Company, in those cases
 where fire-refined copper is satisfactory, all of their needs to meet
 the Chilean market demands. However, a very lucrative business both
 for intermediaries and the Chilean Army Workshops has recently de-
 veloped by reason of the following practice. Since Anaconda will not
 sell in Chile and since in New York they will only sell to regular copper
 consumers, intermediaries dealing largely on a speculative basis are
 unable to make their purchases direct. Hence, they contract with the
 Chilean Army Workshops to purchase fixed tonnages of semi-manu-
 factured copper. Occasionally this is in the form of wire of rela-
 tively large gauge, at other times it is in strip or sheets. Recently,
 however, since the income from the business is so attractive, it is under-
 stood that the greater amount of this copper is worked but very little,
 such as being rolled into very thick sheets or strips. Under this situa-
 tion the Chilean Army Workshops have been able to purchase fairly
 substantial quantities of copper from Anaconda. They then work it as
 above indicated and sell it in turn to the intermediary, who exports the
 product to Argentina.
 There is little or no control over the sales of this copper once it
 reaches the Argentine market and the practice is clearly an abuse by
 all of those engaged in the transaction.
 Consequently, I venture to suggest that the Department may wish
 to advise the Chilean Government that it considers that future sales
 of semi-manufactured copper by the Chilean Army Workshops to in-
 termediaries not normally consumers of copper and subsequent expor-
tation of this copper to Argentina, should be discontinued inasmuch as:
  1. The practice is detrimental to the war effort of the UTnited States,
as a) the United States needs every ton of Chilean copper available;
     454238---63--5



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