821.51/2517: Telegram

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

163. As the Minister of Finance8a advised me on June 14 the Council of Ministers in extraordinary session today approved measures [Page 703] proposed by the Ministry of Finance for reorganizing the national economy and decrees promulgated under authority of extraordinary powers act will be issued and effective as of tomorrow.

The measures involve modifications in existent banking legislation and comprehend the following subjects:

Refunding and consolidation of internal public debt which will be serviced by contract with the Bank of the Republic at reduced interest rates of 4 and 6%. The Bank of the Republic will make a loan to the nation of 20,000,000 pesos largely from proceeds derived from Export and Import Bank loan.

A new section will be created in the Agricultural Credit Bank with a capital of 5,000,000 pesos derived from the above funds for the purpose of making short and long term loans to agriculturalists and live-stockmen. The nation will subscribe 2,000,000 additional capital to other sections of the Agricultural Bank and this bank will be able to make 20-year mortgage loans and 6-year agricultural or industrial security loans. It can accept as security for agricultural loans future crops from permanent plantations. Commercial banks will be permitted to buy unlimited amounts of the Agricultural Bank’s bonds maturing in less than 18 months and permitted to buy amounts of the longer term bonds up to 40% of their capital and reserve the bonds to be rediscountable.

Braden
  1. Carlos Lleras Restrepo.