821.51 Cooperation Program/7a: Telegram

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

145. The Export-Import Bank on June 6 approved a resolution for the extension of credits of up to $12,000,000 to Colombia, all specific projects to be subject to the approval of the Bank. Details will be worked out with Ambassador Turbay.

The Bank will again request the Department to take up with the Colombian Government the several issues regarding exchange control, the dollar indebtedness of the Agricultural Mortgage Bank and the Municipality of Bogotá, and so forth, of which you are aware. The Bank expects that these will be settled to our satisfaction, but will not include them as specific conditions to the credit.

Ambassador Turbay has indicated that his Government is interested in having him discuss with the Treasury a possible monetary or stabilization operation, and the Department has requested the Treasury Department to go into the matter. The Secretary of the Treasury will see Turbay early in the week, and preliminary discussions will begin then, although the Treasury cannot move rapidly until legislation now pending for the extension of the Stabilization Fund beyond June 30, 1941 is adopted. The Treasury has asked a number of specific questions regarding points of the Colombian exchange arrangements not entirely clarified in the recent excellent reporting of the Embassy:

Relations of the Exchange Stabilization Fund to the Exchange Control Office.
What are the resources of the Exchange Stabilization Fund and for what purposes does it allocate foreign exchange.
Has the Embassy any further facts regarding the allocation of dollars for Japanese imports in Class I, for payment of the 5-year Italian compensation notes, and in any other similar arrangements.