810.154/3032
The Ambassador in Honduras ( Erwin ) to the Secretary of State
[Received July 21.]
Sir: I have the honor to refer to my despatch No. 150, of June 21, 1943,24 and to the Department’s instruction No. 1322 of July 6, 1943,25 file No. 810.154/2063, regarding the Honduran consular charge of 3% and the effects of its being collected or not collected on imports for the construction of the Pioneer and Inter-American Highways.
The Department’s instruction No. 1322 states, “The Export-Import Bank informs the Department that, quite apart from any interpretation which the Honduran Government may place on its obligations to the British Foreign Bondholders Council, it considers that it has a second lien on the entire three per cent part of the consular charge on which the British Foreign Bondholders Council holds the first lien, and that if there is any surplus available after full service has been provided on Honduran obligations to the Council, this surplus is subject to the Export-Import Bank’s lien.” …26 “The Department therefore feels that the Honduran Government should not waive the three per cent portion of the consular charge on which the Export-Import Bank has a second lien, quite apart from any obligations which the Honduran Government may have toward the British Foreign Bondholder’s Council in this connection.”
The Embassy has discussed the question with the Acting Minister of Finance, Dr. Urbano Quesada, who stated informally that he did [Page 371] not agree with the Export-Import Bank’s position. He also pointed out that the payment of the 3% charge on imports for the highway would in effect constitute an outright gift by the United States Government to the Honduran Government of two-thirds of the amount of such payment. He outlined again the position forwarded to the Department in the Embassy’s despatch No. 150, and stated that, although technically speaking the 3% could not be waived, there was little likelihood of any complaint from the British Bondholders as long as the semi-annual payments were made.
With regard to the Export-Import Bank’s claim that it has “a second lien on the entire three per cent part of the consular charge …27 and that if there is any surplus available after full service has been provided on Honduran obligations to the Council, this surplus is subject to the Export-Import Bank’s lien”, the Embassy respectfully refers to its despatch No. 2624, of February 12, 1943. It will be noted on pages 3 and 4 of the above-mentioned despatch that Article 6 of the Export-Import Bank contract pledges: “(b) The proceeds of the consular income now pledged in accordance with Legislative Decree No. 66 of March 9, 1926, the same to be available when released from the prior lien of said pledge”. Enclosures Nos. 4 and 528 to despatch No. 2624 contain Article 8 of Decree No. 66 indicating that the proceeds of the 3% charge are to guaranty the payment of the semi-annual bonds of 20,000 pounds sterling each and the expenses for servicing the debt, and that the balance above this amount will be placed at the order of the Honduran Government.
The Acting Minister of Finance interprets the above clauses to mean that the Export-Import Bank does not have a lien on the available surplus after service has been provided on Honduran obligations to the Council, and that its lien on receipts up to 20,000 pounds sterling plus service charges does not take effect until “when released from the prior lien of said pledge.” He implied, however, that the Export-Import Bank contract might possibly be construed, after the release from the prior lien, in such a manner that the Export-Import Bank would receive more than 20,000 pounds plus service charges.
The Embassy would appreciate the receipt of additional instructions indicating the grounds on which the Export-Import Bank claims to have a lien on the present surplus of receipts above the payments for the British debt before presenting the matter formally to the Honduran Government.
Respectfully yours,
- Not printed; it summarized the opinion of the Acting Honduran Minister of Finance (Urbano Quesada) that the entire 8% consular charge could be waived with good reason (812.154/2063).↩
- Not printed.↩
- Omission indicated in the original despatch.↩
- Omission indicated in the original despatch.↩
- Neither printed.↩