"Chilean Nitrate Exports to the United States during World War II: International Business and the U.S. Wartime Bureaucracy"

During World War II, as in World War I, chemical nitrogen had immense strategic value. Nitrogen is a crucial input in the production of explosives for the military, and fertilizer for food production. Even before Pearl Harbor, the U.S. government recognized that Chilean nitrates would be an essential supplement to domestic nitrogen production. From 1940-1945, the U.S. pursued a two-pronged approach to secure sufficient nitrogen: 1) negotiation of procurement contracts for Chilean nitrates, and 2) government-financed expansion of domestic synthetic nitrogen production capacity. In a fundamental sense, the strategy can be viewed as a success, because nitrogen supplies were sufficient for enormous increases in ordnance production and agricultural output. However, to contemporaries this was far from a foregone conclusion. In 1942, when many of the new U.S. chemical plants were still under construction, Chilean imports were of vital importance. Chilean negotiators, executives of the Chilean Nitrate and Iodine Sales Corporation (COVENSA), were deeply concerned about the expansion of U.S. synthetic capacity, which they felt posed a mortal threat to future Chilean participation in the U.S. market. They pressed the U.S. for post-war commitments from 1942 forward, without success. On the U.S. side, myriad government agencies and private sector actors, with differing preferences, strove to influence the negotiations with the Chilean interests. This paper examines the difficult negotiations over the sale of Chilean nitrates to the United States during the war, the critical role those imports played during the most uncertain period of the war, and the inability of Chile to secure U.S. concessions about the future disposition of government-owned nitrogen plants. This study utilizes records from archives in Washington and Santiago, including those of the War Production Board, the War Food Administration, and COVENSA.