821.51/872: Telegram

The Minister in Colombia (Caffery) to the Secretary of State


39. Your 16, March 16, 4 p.m. This incident has adversely affected President Olaya more perhaps than it should. The President holds that he has based his entire political program on cooperation and friendship with us, but now, in view of the action of the bankers, his confidence in American businessmen seems to be a bit shaken. I am, of course, trying to combat this, but I am not convinced that he will continue to support the Barco contract with the same vigor, and he may not veto all the many objectionable articles in the general tariff bill which is now in his hands for signature, which he has promised to do.

The Bank’s statement to the Department that the bankers’ representatives here confused the two $4,000,000 credits, etc., is not true. …

The figures for the settlement of the Supía Marmato claim, as set forth in despatch No. 1779 of October 14, 1930,33 were correctly reported. The amount of the accrued interest is £40,000 sterling. President Olaya knows that the attitude of Lazard was due to pressure from the British Foreign Office. What he chiefly resents is that our bankers, after promising to pay the $4,000,000 upon certain conditions, when the conditions were complied with, at the last moment put forth this British claim.

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The President’s prestige has suffered considerably. For instance, Senator Marulanda this morning remarked that he believed that all of President Olaya’s talk about American friendship was “a lot of bunk”; that Congress, believing his promises, had carried out every condition of the bankers and still the bankers had not paid over the money.

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