Memorandum of Telephone Conversation, by Mr. H. Gerald Smith of the Division of Commercial Policy and Agreements

I telephoned Señor Chavez at his home where he has been confined for several days, to inquire if he had received any new information from his Government concerning the trade agreement.

He said that he had had a telephone conversation on February 18 with the Peruvian Finance Minister25 and with Señor Beltran,26 and that the conversation had been devoted chiefly to the question of cotton. Señor Chavez said that it had been agreed that for the present the Peruvian Government would withhold any further expression of its interest in any plan for the purchase of Peruvian cotton by the Government of the United States. I mentioned to Señor Chavez in this connection that it appeared to be the understanding in the Department of Agriculture that the Peruvian Government had much more interest in a cotton purchase plan than in the trade agreement. Señor Chavez said that he had been trying to see Mr. Wheeler27 to convey to him the information received from Lima as to the attitude of the Peruvian Government on the purchase proposal but had been informed that Mr. Wheeler was out of town and would not return until February 23. Señor Chavez expressed an interest in discussing the cotton question with Mr. Hawkins prior to seeing Mr. Wheeler and I said that I would try to arrange an appointment for February 23 or 24.

Señor Chavez referred to an article appearing in La Prensa of New York on February 20 stating that the matter of quotas on Peruvian cotton was under discussion in the Department of Agriculture and there was a wide divergence of views in that Department on the matter. I told Señor Chavez that I had not seen the article but that I had learned that some information had leaked out on the cotton matter to the press and also that a concerted campaign appeared to be getting under way to prevent any action to liberalize the present cotton quotas. Without indicating any details I mentioned to Señor Chavez that the outlook at present for action on the quotas favorable to Peru did not appear encouraging.

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I asked Señor Chavez if he had any information whether Señor Beltran was planning to return to Washington in the near future and he said that as far as he knew Señor Beltran had no plans along that line. Señor Chavez also said that he planned to leave for Lima on February 28 by plane.

Señor Chavez said that he had received no indication from his Government as yet regarding its attitude on our proposals on the general provisions of the proposed agreement but said that he had written to Lima about a week ago urging that consideration be given to this matter in order that this part of the negotiations might be advanced as rapidly as possible.

  1. David Dasso.
  2. Pedro Beltran was concurrently Commercial Delegate of Peru to the United Kingdom, France, and the United States and member of the International Financial and Economic Advisory Committee, Washington (194043).
  3. Leslie A. Wheeler, Director of Foreign Agricultural Relations, Department of Agriculture.