811.20 (D) Regulations/2314: Telegram

The Ambassador in Peru (Norweb) to the Secretary of State

181. Referring to the Department’s telegram No. 99, May 15, 8 p.m. The contents of the Department’s telegram under reference [Page 526] were brought to the attention of the Minister of Finance this afternoon who discussed the matter in an entirely unofficial and personal way. The Minister stated that this matter would have to be discussed with the Cabinet and the President and a reply would not be available before Wednesday or Thursday of next week. The Minister’s personal opinion is that the Government, because of a number of existing contracts, may prefer not to negotiate for the producers. Owing to the fact that these contracts are with the Japanese he undoubtedly has in mind the fear that the stoppage of imports of cotton now amounting to over 1 million dollars per month by the Japanese in retaliation could create a serious political situation for the administration.

Nevertheless, the Minister while making no commitment recommended that a representative of Metals Reserve should come to Peru to negotiate with individual producers directly but that the Government would lend all facilities for that purpose including those of the official mining and industrial banks.

The Minister inquired whether the United States would be willing to restrict the use by the Japanese of dollar credits through American banks for the purchase of Peruvian minerals. The Minister remarked: “If we are bucking them let us do it in a thorough manner and make it look like a united front”; rather than make it appear as if Peru were “out in front”.

In view of the foregoing and my 180 of today there now seems to be some hesitancy on the part of the Peruvian Government in view of the local reaction to the recent proposal for the use of friendly offices in the boundary dispute,51 which has resulted in strong criticism of the administration’s foreign policy.

  1. For correspondence pertaining to the boundary dispute between Ecuador and Peru, see vol. vi, pp. 212 ff.