821.51/2347b: Telegram

The Secretary of State to the Ambassador in Colombia (Braden)

68. Personal. From the Under Secretary.25 The Colombian Ambassador today came to see me to state that he had been informed by his [Page 493] Government that at an official interview requested by you yesterday you had informed the Minister of Finance that this Government did not consider that the proposal submitted by the Colombian Government for the settlement of the debt default was satisfactory. It was said that you went on to mention various ways, including the levying of certain new taxes, by which the Colombian proposal might be improved.

In view of the opening of the Colombian Congress tomorrow and of the knowledge in informed quarters of your visit to the Minister of Finance in his office, the Ambassador stated his Government was extremely perturbed that the supposition might arise that the United States Government was injecting itself into the debt discussion and exercising pressure for better terms. This would introduce great complications into the negotiations, making it much more difficult for the Government to negotiate an equitable settlement.

In commenting upon the Ambassador’s statements, I informed him as follows: First of all, as I had explained to him many times and to Dr. Santos when he passed through Washington prior to his participation in the presidential elections, it has consistently been the policy of this Government not to interject or involve itself in the negotiations between governmental entities and the bondholders, its activities being strictly limited to using its informal good offices to help bring about the inauguration of discussions and facilitate their continuance.

Secondly, as I had frequently expressed to the Ambassador and also to Dr. Santos, this Government, because many thousands of American citizens have invested their savings in the obligations of foreign governmental entities, does have an interest in the settlement of the defaults of such obligations which have occurred in the last few years. For this reason, this Government has urged and has done what it could to facilitate discussions between foreign governmental entities and the bondholders to reach an agreement for the resumption of debt service on the bonds held by American citizens.

Thirdly, I stated that no instructions had been sent to you to make any official representations in the matter on behalf of your Government nor to seek an official interview with any member of the Colombian Government. I said that of course we had kept you fully informed of the situation with regard to the debt negotiations so far as the Department was advised thereof, and that you had been authorized in your discretion to express at your dinner to the Minister on July 8 your hope that he personally would study the Council’s observations. I expressed the belief that if you had requested an official interview with the Minister in his office, such an appointment had been sought by you in accordance with your general instructions to do what you considered possible to solve any difficulties that might arise between the two countries and to remove any obstacles to the close and friendly relations [Page 494] which both Governments desire, and that you undoubtedly had not intended to indicate that any official intervention in this question was being undertaken by the Government of the United States. I said that I felt sure that the Ambassador appreciated that any settlement which might be reached in the debt negotiations and which proved satisfactory to both sides would bring about an atmosphere favorable to the economic and financial cooperation in which both our Governments were interested.

The Ambassador expressed his appreciation for the statement that I had made as to the position of this Government, and gave me to understand that my explanation would clear up any misunderstanding which his Government may entertain. However, the fact that the Colombian Government thought it important enough to request the Ambassador to see me indicates the sensitiveness of the Government to any suggestion on our part as to proper terms of settlement, and makes essential the exercise of the greatest discretion in conversations with Colombian officials. For the time being, I feel it would be preferable for you not to initiate any discussions of the debt question unless requested by the Department, and, if the matter is raised by responsible officials to confine your remarks to an expression of the Department’s interest in a settlement to the extent set forth above.

  1. Sumner Welles.