821.51/2674: Telegram

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

445. Your 582, November 26, 1 p.m. Counsel of the National City Bank has called the attention of the Department to draft legislation [Page 81] pending in the Colombian Congress which would empower the Finance Minister to make a settlement of this matter on the basis of 3 percent interest and 10-year amortization. The legislation, described as “Article 17” is reported to have been read at least once already in the Lower House with final action expected by next week.

In view of this expected legislation and general hopefulness of the Bank’s Colombian branch managers, the Bank is prepared to agree to an extension for 6 months to May 31, 1942 at the present rate of interest and with $100,000 amortization—that is, half of the $200,000 annual amortization provided in the proposed budget.

During the 6 months period negotiations would take place under the above-mentioned pending legislation for a permanent settlement. The Bank would be prepared to settle on the basis of total annual payments of approximately $1,435,000 including interest at 3 percent. During the first year this would provide an amortization of approximately $1,000,000, which would be stepped up as the amount needed for interest diminished. In addition to this basis of settlement, the Bank would require that in the first year there be an additional payment of $500,000 which the Bank states has been promised to it but not carried out.

Hull