823.51/1306
The Peruvian Delegation to the Meeting of the Foreign Ministers of the American Republics Held at Panama, September 23–October 3, 1939, to the American Under Secretary of State (Welles)15
The justified fear of Peruvian agriculturalists that they will not be able to find in the near future buyers for cotton and sugar production because they consider the German market lost, which was absorbing from 20% to 25% of our exports (presumably of cotton and sugar exports only) and because they consider the British market doubtful, which was consuming up until now 35% of our exports, has aroused a lack of confidence and uncertainty in the holders of foreign exchange which has placed the stability of our currency in serious danger in the last days of this week.
The Government of Peru considers in the circumstances that the economic assistance which the United States has indicated it is disposed to grant us may be placed in effect immediately to avoid the greater depreciation of the sol which our Reserve Bank already has great difficulty in preventing.
This considerable lack of exchange has already had as its first result the reduction and almost the paralyzation of importation of merchandise from the United States.
An urgent and indispensable measure to remedy this situation would be the opening of a credit in dollars in the Export-Import Bank of Washington for the Reserve Bank of Peru which institution would distribute the credit among the Peruvian importers of North American merchandise. These importers would deposit in the Reserve Bank [Page 780] the equivalent amounts in soles, the liquidation between dollars and soles to be effected at a rate of exchange to be determined.
The amounts thus deposited in the Reserve Bank to the credit of the Export-Import Bank would be balanced periodically in the future on bases that would be studied, one of which could be the value of United States imports of Peruvian products.
- Then at Panama as the United States delegate to the meeting.↩