821.51/2664: Telegram

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

551. My telegram No. 546, November 10, 10 p.m. Manager of National City Bank advises me that about 2 months ago he received a letter from the Minister of Finance in which the latter confirmed a previous promise to endeavor to obtain congressional authorization for the settlement of the group loan and to include $500,000 for amortization in 1942 budget. The Minister has done neither so far but in this letter he includes a self-serving declaration to the effect that the group had been unwilling last January to negotiate.

The manager and bank attorney feel it is important to recommit the Minister definitely to his promise and simultaneously to make clear that they by no means refused to negotiate. I entirely concur with their judgment in this particular. However, the New York Office of the bank appears reluctant to take this action.

I have expressed my purely personal opinion to the manager as follows:

If by so recommitting the Minister negotiations were to be opened they would have to be handled carefully to avoid placing the group [Page 79] in a bad trading position as for instance if they agreed to minimum terms with the Santos Government but the deal were not made legally binding the new administration which takes office next August might try to obtain still further reductions. On the other hand Lopez, in expectancy of his being the next President, might be glad to have Santos assume the responsibility for the settlement and accordingly might lend the necessary congressional support to conclude the matter.

I shall take an appropriate opportunity in the near future to renew my discussion of this affair with the President and Minister of Finance.