Office of the Historian

118. Memorandum of conversation, June 9, between Ambassador Lima and Ball1

June 9, 1961
[Facsimile Page 1]

SUBJECT

  • Salvadoran Political Situation and Need for U.S. Financial Assistance

PARTICIPANTS

  • Ambassador Francisco R. Lima of El Salvador
  • B—Mr. Ball, Under Secretary for Economic Affairs
  • Mr. Schaetzel, Special Assistant
  • OAP—Mr. Gwynn, Officer-In-Charge, Salvadoran Affairs

Ambassador Lima called at his request to make a courtesy visit and briefly discuss substantive problems. In the course of the conversation he made the following points:

1. The existing political situation in El Salvador is still very dangerous, with the present Government lacking a broad base of popular [Typeset Page 283] support and facing serious threats from the extremes of both right and left.

2. The country is facing serious economic problems which are aggravating the situation.

3. The Salvadoran economy is highly dependent upon the world market price of coffee.

4. The Government is anti-Communist, pro-US, and in the face of strong resistance by the entrenched interests is demonstrating its expressed intention of implementing social reform, in line with the principles of the Act of Bogota and the Alianza para Progreso.

5. It anticipates that it will be able to obtain U.S. assistance in attaining these objectives in due course, but it is vitally important for the existing Government to be able to obtain US financial assistance now, both to help in resolving Salvador’s current economic problems and to provide tangible evidence [Facsimile Page 2] to the Salvadoran public of U.S. support for the present Government and its objectives.

6. The Government appreciates the US$4 million Exim Bank-DLF loan for airport expansion recently announced.

7. The Government is agreeing to a proposed IMF program for solving its current balance-of-payments problem.

8. He expressed the hope that US agencies such as the Exim Bank would continue to consider pending Salvadoran applications for U.S. balance-of-payments assistance measures as highly urgent and would continue to expedite consideration of these.

9. He suggested that the U.S. consider using El Salvador as a model for carrying out the President’s Alianza para Progreso program.

Mr. Ball indicated that he considered this last an interesting offer and stated that the Department would endeavor to assist El Salvador in its pending applications to other U.S. agencies for balance-of-payments assistance measures.

  1. Salvadoran political situation and need for U.S. financial assistance. Limited Official Use. 2 pp. DOS, CF, 716.00/6–961.↩