The Ambassador in Paraguay ( Beaulac ) to the Secretary of State

No. 728

Sir: Supplementing my despatch No. 580 of February 22, 194545 (subject: “Recommending that Export-Import Bank loan be used for agricultural development and construction of transportation facilities in Paraguay”), I have the honor to report that the Minister of Foreign Affairs, Dr. Horacio Chiriani, several weeks ago suggested at a meeting of the Council of Ministers that the Paraguayan Government request an allocation of the $450,000 remaining out of the second 3 million dollar Export-Import Bank credit, in the maimer suggested in my despatch referred to, that is to say, $125,000 for agricultural promotion and $325,000 for highway maintenance and construction.

Dr. Chiriani informs me that the Minister of Agriculture46 objected to giving up any of the $450,000 which he had hoped to obtain for his own department, and that the matter was allowed to rest there.

I have recently been informed by Mr. John Camp, Chief of Party for Stica,47 that the Minister of Agriculture has now given up hope of obtaining a credit from the Export-Import Bank any greater than that needed to cover dollar expenditures in the United States under the agricultural program described in my despatch No. 580.

It is possible, therefore, that the Paraguayan Government may some time in the future request a credit in the amount of $450,000 to be allocated in the manner suggested.

In connection with the foregoing, I have reminded Dr. Juan Plate, Minister of Finance, that Paraguay is in arrears in servicing its indebtedness to the Export-Import Bank. I shall pursue the matter with him and the Foreign Minister. I do not doubt that payment will be forthcoming.

I do not consider that any additional credit should be extended to the Paraguayan Government until service of the credits already granted has been brought up to date, nor do I think the Paraguayan Government will request additional credits until this has been done.

Respectfully yours,

Willard L. Beaulac
  1. Not printed.
  2. Alfonso Dos Santos.
  3. Servicio Técnico Interamericano de Cooperación Agrícola.