823.51/145: Telegram

The Ambassador in Peru (Norweb) to the Secretary of State

1066. Reference Department’s telegram No. 881, August 5, 10 p.m. For the Under Secretary. The subject has been discussed recently with the President and the Finance Minister. Possibly the President’s radio statement, reported in my despatch No. 7409 of July 2075 and repeated in his annual message to Congress, was a result. In paraphrase he said: “We have totally cancelled many foreign obligations, no foreign loans have been floated and the settlement of the foreign debt is under study depending on the goodwill of our creditors to reach an honest and equitable agreement. No part of the credit opened 3 years ago by the Export-Import Bank for $25,000,000 has been used”.76

On the basis of this statement, I recently requested that I be provided with some offer for settlement to take with me on my contemplated trip to Washington in September (see my letter to Mr. Bonsal dated August 2).75 The President informed me he would discuss the subject with the Finance Minister who stated early this week that he is giving attention to the matter and hopes to have something for me to present to Washington for discussion. He also mentioned that the Council of Ministers had given him authority immediately to effect complete payment of the entire postal debt without further temporizing with partial payments in monthly or quarterly installments. Although there is no budgetal provision for payment of the postal debt he proposes to sell public works bonds in an amount sufficient to effect the full payment.77

Accordingly there seems to be some sound basis for belief that the President and associated Peruvian authorities are giving serious thought to the problem of regularizing the financial position of the Government. Consequently strengthened by your telegram under [Page 751] acknowledgment I shall be in a position with some prospects of progress again to confer with the President on the question of Peru’s financial obligations to the United States.

  1. Not printed.
  2. See Foreign Relations, 1940, vol. v, pp. 1135 ff.
  3. Not printed.
  4. In despatch No. 7665, August 20, 1943, the Ambassador reported that the Minister contemplated selling the bonds on the open market in sufficient amount to cover the agreed postal debt to the United States of $308,000 (811.71223/57).