The Ambassador in Honduras (Erwin)58 to the Secretary of State

No. 194

Sir: I have the honor to refer to the Department’s instruction No. 1139, February 20, 1943, the Department’s airgram No. 262, 6:30 pm, May 21, 1943, and the Embassy’s airgram No. 256, of June 11, 11:00 am, 1943,59 concerning the visit of the Financial Mission sent to Honduras by the United States Treasury Department at the request of the Honduran Government.

The Financial Mission arrived in Tegucigalpa on May 31, 1943, and consisted of Mr. E. M. Bernstein and Mr. John S. De Beers, representing the Treasury Department, Mr. A. T. Esgate, representing the Farm Credit Administration, and Mr. Robert A. Triffen, representing the Board of Governors of the Federal Reserve System. They were met by Mr. Jorge Coello, Assistant Chief of Protocol of the Honduran Foreign Office, Mr. Virgilio Galvez, Chief Clerk of the Honduran Ministry of Finance, and Mr. Robert Whedbee of the Embassy staff. Due to the absence of the Acting Minister of Finance from Tegucigalpa, no appointments were arranged for May 31, and the Mission spent the afternoon in discussion with members of the Embassy staff. On the morning of June 1, the Mission, accompanied by Mr. Coello, of the Foreign Office, and Messrs. Faust60 and Whedbee [Page 390] of the Embassy, called on President Carías, Foreign Minister Dr. Salvador Aguirre, and Acting Minister of Finance Dr. Urbano Quesada. The Mission was received quite cordially, and Dr. Quesada offered the full cooperation of his Ministry in furnishing any information which the Mission desired.

The Mission spent the next week interviewing important Honduran Government officials, bankers, merchants, agriculturalists, and the directors of the various United States’ Government activities in Honduras. Most of the second week of the Mission’s stay in Honduras was spent at important cities on the north coast of Honduras interviewing important persons in that area. Mr. Bernstein returned to the United States on June 11, and Mr. Esgate on June 16. Mr. Triffen and Mr. De Beers remained in Honduras until July 2, during which time they interviewed various officials and made a trip to Choluteca.

It is understood that the Mission took detailed notes of their various interviews, which are presumably available to the Department and therefore it appears unnecessary to review them at this time.

The Mission had not reached any definite conclusions as to what its recommendations would be when the members left Honduras. They indicated to the Embassy and to various Honduran officials however, that they were particularly interested in the question of the possible formation of a Central Bank, whose functions might be: (1) the control of foreign exchange, (2) the issuance and regulation of currency, (3) the supervision of private banks, (4) a repository of Government funds, (5) the repository of private bank reserves, (6) the discounting of bills, and perhaps (7) a source of loans to the Honduran Government. The Central Bank might also have a separate section devoted to agricultural credit, which would be subsidized from the present Governmental revenues for the Exchange Fund and the Cumulative Fund.

Members of the Mission planned to stop in Nicaragua and El Salvador briefly before returning to the United States in order to talk to officials connected with Governmental banking enterprises in those countries.

Respectfully yours,

John D. Erwin
  1. The American Legation in Honduras was raised to the status of Embassy on April 27, 1943, when Minister John D. Erwin presented his credentials as Ambassador.
  2. None printed.
  3. John B. Faust, Second Secretary of Embassy and Consul.