821.51/2636: Telegram

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

223. Reference is made to the Department’s telegram no. 210 of July 25, 9 p.m., and to your reply no. 299 of July 28, 9 p.m.3 On July 29 the Treasury Department handed Turbay a draft agreement between the Colombian Stabilization Fund, the Bank of the Republic, and the Government of Colombia on the one hand, and the Secretary of the Treasury of the United States on the other, providing for a $3,000,000 stabilization fund operation. A full copy of this draft agreement is going forward to you air mail but in as much as Turbay leaves Washington this afternoon by airplane for Bogotá where he should arrive the morning of August 2, it is thought that certain details would be of interest to you.

The draft agreement itself in paragraph 6 thereof includes certain commitments on the part of Colombia with a view to maintaining stability of the United States dollar-Colombian peso rate of exchange; that no important change will be made in the Colombian exchange control system without an opportunity for consultation by the United States; that diligence will be exercised by Colombia in the issuance of import permits and exchange approvals to avoid in so far as possible undue delays in payments for imports from the United States or in other remittances to the United States.

In addition to the commitments in the draft agreement Dr. Turbay immediately following the meeting which was held in the Treasury Department was handed in this Department a note which it was requested he address to the Secretary of State confirming the following:

Import licenses or exchange approvals would be kept commensurate with exchange availabilities to avoid unpaid backlog periods.
Retroactive exchange decrees or regulations detrimental to the United States would not be promulgated.
Colombia would seek to avoid undue delay in the payments of legitimate United States exchange requirements.
Colombia recognizing that the stabilization loan and credits from other United States Government agencies have important stabilizing influence on Colombian exchange would not divert funds so procured to countries whose interests are inimical to those of the United States or Colombia and there would be consultation on this point when there might be a difference of views.

Ambassador Turbay was told that these commitments were in continuation of the conversations you had already held successfully with the Minister of Finance on related subjects. For the most part it only summarized what the Minister had already told you but in explanation of point 4 which had not been presented by you to the Minister of Finance in just that form, he was told that the United States obviously could not mention Germany, Japan, or Italy in a formal note of this kind but that the Department wished to have point 4 on record so that if any later questions were asked by the press or in Congress the Department would be in a position adequately to answer these inquiries or attacks. Dr. Turbay was told that this Department was very happy to recommend that the Treasury authorize the $3,000,000 stabilization amount in view of Colombia’s fine cooperation with us, but for the sake of the record had to have something to stand on. Turbay offered no objection and seemed very happy about the whole affair.

This information is being sent in order that you may be fully informed should Turbay or the Minister of Finance raise the subject.

It was considered inadvisable in these stabilization discussions to bring up the subject of the Agricultural Mortgage Bank, the petroleum laws, or the corporation law since you had already adequately covered these points in your talks with the Minister of Finance.

  1. Neither printed.