The Chargé in Colombia (Dawson) to the Acting Secretary of State

No. 5668

Sir: With reference to the Legation’s telegram No. 58 of June 19, 9 p.m., and its despatch No. 5666 of June 20, 1933,39 regarding the plans of the Colombian National Government for payment of interest on its external funded debt during the current year, I have the honor to report that I am reliably informed that the scrip to be issued during the current year in payment of two-thirds of the interest due on the foreign funded debt may be made interest-bearing instead of noninterest-bearing as originally contemplated, and that consideration is being given to the possibility of having the scrip amortized in four annual increments beginning December 31, 1934, instead of merely making it amortizable in four years or less.

In connection with the consideration by President Olaya and Dr. Esteban Jaramillo, Minister of Finance and Public Credit, of possible refunding operations to cover the foreign debt not only of the National Government but also of the various departments and municipalities, the former informed me when I saw him on June 19 that if the National Government assumed the foreign obligations of subordinate governmental entities it would insist on the allocation by them to the National Government of sufficient revenues to cover service of their portion of the total debt. He contemplated that revenues assigned would be such as local taxes on beer, other alcoholic beverages, etc. Dr. Olaya remarked that he thought a refunding of the entire Colombian foreign debt would result in a material reduction of the total capital and service charges in view of the present quotations in foreign markets of Colombian bonds.

Respectfully yours,

Allan Dawson
  1. Despatch No. 5666 not printed.