823.24/11–2944
The Ambassador in Peru (White) to the Secretary of State
[Received December 11.]
Sir: I have the honor to submit the following preliminary reply to the Department’s Secret Instruction No. 3688 of November 23, 1944, requesting that the Peruvian officials be approached discreetly concerning the payment of the $4,000,000 due under the terms of the Lend-Lease agreement.
It having been decided that the best initial course of action would be to approach the Finance Minister informally, the full details of the Department’s communication were made known to Mr. East, who reiterated his previous statement as mentioned in paragraph 3 of the instruction that Peru has the money. He said he must emphasize, however, that these funds are available in Peruvian soles; that the only real difficulty is that of obtaining the necessary dollar exchange. [Page 1516] In this connection, he mentioned the analagous difficulty arising in the case of the delinquent dollar debt. He stated that about $15,000,000 now are available in foreign exchange, and that he would hesitate to recommend to the government that it draw a draft for $4,000,000 at this particular period because it could easily produce undesirable political and economic consequences. He thought it would be best to consider some plan for gradual payment.
All of this, he said, represented his own personal preliminary impressions, but that he would bring up the subject in the meeting of the Council of Ministers tomorrow and make such suggestions as correspond to him as Finance Minister. He observed he had never been anything more than a spectator in the Lend-Lease agreements, since all of them had been arranged by the Junta de Defensa Nacional and the Minister of Foreign Relations. His intervention as Finance Minister consists only of advising the corresponding officials regarding the availability of funds. Mr. East at first requested that none of this information be communicated to Washington for the time being but later acquiesced in the suggestion that the officers in Washington would be as interested in his preliminary impressions as anyone else.
The Minister then advised that this matter be taken up directly with Foreign Minister Solf, either in writing or orally as might be deemed best. He explained that such was the proper course of action in this case because the Minister of Finance and Commerce has not been charged with supervision of Lend-Lease procurements. He thought that both the Minister of Foreign Relations and the Junta de Defensa Nacional would feel that the Embassy had desired to go around behind them or that he had delved into the affairs of other departments if he should take the lead in this affair. However, he considered this informal exchange of views to be in order and stated that he would inform the Council of the conversation. Being familiar with the budgetary situation and the foreign exchange reserve fund, it would be necessary, he said, to advise against writing a check for $4,000,000 in the present circumstances. He again qualified by stating that this was his personal opinion at the moment and that the deliberations of those directly authorized to deal with Lend-Lease affairs might result in some other decision. Mr. East said he had not yet seen or heard of the Department’s note of November 2336 to Ambassador Beltran in Washington, but presumed that it has been received in the Ministry of Foreign Relations.
A formal note has been written to the Foreign Minister enclosing a copy of the Department’s note to Ambassador Beltran, this procedure [Page 1517] appearing to be best adapted to getting the matter before the other interested ministers and the Cabinet Council.
Respectfully,
- Not printed.↩