Memorandum by the Chief of the Division of Latin American Affairs (Wilson)

Mr. F. J. Lisman, of the Bondholders Protective Committee for Republic of El Salvador External Bonds, called on Mr. Welles. He stated that Mr. Gilson, Chairman of the Committee, had died about [Page 273] ten days ago, following a rather prolonged illness; that the Committee had elected a Mr. Lowber, Trust Officer of the Manufacturers’ Trust Company, to succeed Mr. Gilson as a member of the Committee. It has not yet been decided, according to Mr. Lisman, whether the Chairman of the Committee will be Mr. Lavis or Mr. Lisman.

Mr. Lisman said that the Committee was receiving remittances regularly, and that the money was now in the bank to pay interest on the A and B bonds due January 1, 1935. In this connection he left the attached letter from Mr. Bradford, Secretary of the Committee,56 setting out the increase in customs revenues for July and August over the respective months of last year. Mr. Lisman said that since last March the Committee had been endeavoring to obtain a reply from the Salvadoran Finance Minister on the Committee’s proposal that the existing temporary agreement should be extended to be in effect during the calendar year 1935. He said that the Finance Minister had sent mere acknowledgments but had expressed no views on the proposal. The time is now getting short, and the Committee hopes to avoid the unpleasant situation which would result if by January 1, 1935, when the present agreement expires, there has been no agreement negotiated to cover the immediate future. He said that the Committee felt that it would be impossible to negotiate a permanent arrangement before January 1, 1935, and that in any case it would be preferable to extend the temporary agreement so as to afford sufficient time to negotiate the permanent agreement after the new administration comes into office in Salvador next March. In this connection Mr. Lisman handed Mr. Welles the attached copy of a letter which the Committee proposes to send to the Finance Minister.56

Mr. Welles said that this was in effect the position indicated by Mr. Gilson some time ago. He said that it was obviously in the best interests of all concerned to avoid an embarrassing situation next January. He said that in view of the efforts made by the Bondholders Committee since last March to obtain some indication of the opinion of the Salvadoran Government on the proposal for an extension of the temporary agreement, he would be prepared to send an instruction to Dr. Corrigan to inquire, orally and informally, what the intentions of the Salvadoran Government were in the matter. He said that he felt this was all that the Department could do under existing circumstances. Mr. Lisman said that he would appreciate this action very much and thought it would be decidedly helpful.

Mr. Lisman added, in the course of the conversation, that the Committee hoped the negotiations for the extension of the agreement might take place with the Salvadoran Minister in Washington; otherwise [Page 274] the Committee would have to send someone to Salvador as it had been very careful to keep Mr. Renwick out of any of these negotiations, feeling that otherwise his cordial relations with the Salvadoran Government might be prejudiced.

Edwin C. Wilson
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