The Secretary of State to the Minister in Paraguay (Frost)
104. Reference your despatch no. 201 of October 4.34 The Department has carefully reconsidered your urging that the Export-Import Bank accede to the request of the Paraguayan Government for an additional $100,000 credit for the mandioca project, and feels that it must maintain its previous position. As you will recall, the Export-Import Bank originally granted a credit of $400,000 for the mandioca and related agricultural projects and later increased the total to $900,000 to include certain port works. The entire $900,000 is now available for such reasonable allocation as the Paraguayan Government may request. A draft proposal has already been prepared and transmitted to the Paraguayan Minister and to you for the allocation of $400,000 for the port works, as an increase in the present Hebard contract. The remaining $500,000 is entirely unallocated. It is suggested that $100,000 of this total be allocated to the mandioca, perhaps $150,000 to the cold storage project and the balance at this time for feeder roads, which will take some time in their construction. If at a subsequent date the projects of construction, especially of feeder roads, are progressing well and the Paraguayan situation appears to require additional credits, the Department would then be prepared to consider taking the matter up again with the Federal Loan Agency. At the present time the Department cannot take up additional credits with the Federal Loan Agency until some progress is made in carrying out works under credits already extended, and until some real need for additional credits is demonstrated.
- Not printed.↩