821.51/2663: Telegram

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

546. Department’s No. 405, November 8, 6 p.m. Manager of National City Bank confirms that loan will mature on December 1 and best that he expects is another renewal for 6 months at 3% interest and with possible $100,000 amortization.

I have never suggested any specific plan of settlement of this so called short time credit. My efforts have been limited strictly to:

(1)
On all appropriate occasions I have called to the attention of President Santos and other Colombian authorities desirability of reaching a settlement because so long as this matter remained outstanding the members of National City Bank–First of Boston group and even perhaps other bankers in the United States would be less [Page 78] bankers [inclined?] than otherwise to extend their operations in this country.
(2)
During my visit last April to Washington National City Bank officers expressed the hope indebtedness to their group might be liquidated by means of an Export-Import Bank loan to Colombia. I stated to them my personal opinion that such an operation was out of the question.
(3)
Also while I was in Washington Turbay informed me he had tentatively suggested to the group that credit be settled on terms mentioned in Department’s telegram under reference. I intimated to him that bankers probably ask better conditions, as for instance a fixed annual payment of approximately $1,450,000 (to include 3% interest) until extinguished. Later I informed Rentschler and Schoepple of National City Bank and Baker and Goodhue of Bank of Manhattan Company of my conversation with Colombian Ambassador and I expressed my personal opinion that this was about maximum Colombian budget would stand. Also in reply to questions by these bankers I observed that only way to get a settlement was actively to pursue negotiations. This apparently they have been reluctant to do and the Colombian Government is content to have this matter run along as it has for years past.

Braden