821.24/144: Telegram

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

417. My telegram No. 349, August 14, 11 p.m. President Santos yesterday afternoon informed me Government was not empowered to sign a contract along the lines of Lend-Lease draft contract enclosed with Department’s instruction No. 858, of August 21.49 Moreover, he objected to this form of contract because, (1st) it appeared to be an agreement between belligerents, (2nd) rights of the United States to inspect and to suspend at any time were unacceptable, (3rd) while acknowledging the liberality of the terms, they nevertheless involved annual payments by Colombia of approximately $1,000,000 a year, which, under existing circumstances, was too heavy a burden for Colombia to accept. Therefore, he earnestly begged that I do all possible to obtain a “free loan” of $6,000,000 at normal interest rates to be repaid in full over sufficiently long period of time—he mentioned 30 years—would not unbalance the annual budget.

$200,000 would be for aviation, Coast Guard cutters and some infantry equipment; the balance for expenditure in the country including adequate intelligence service for protection against subversive activities.

He preferred to obtain this money through a foreign loan but if that were not possible he proposed to obtain authorization from Congress for an internal loan. He observed that this latter course unfortunately would bring the criticism that the United States was not assisting this country in its part in heroic hemisphere defense program.

I believe that, although Santos may be reluctant to submit the proposed lend-lease contract to Congress, as he claims would be necessary, the fundamental reasons for his desiring a “free loan” are (a) that he wants the $3,000,000 for expenditures (as previously described by me) in Colombia and (b) point (3) above.

I also feel it is important for us at least to give the appearance of assisting Colombia in defense loan. The $6,000,000 requested by Santos would from our viewpoint be as effective in increasing efficiency of Colombian forces as the $16,200,000 proposal now under consideration and would have the added advantage of no financial loss for the United States.

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