811.5017/2–745: Telegram

The Acting Secretary of State to the Ambassador in Colombia ( Wiley )

167. ReEmbs 187, February 7. The offer of the Colombian Government to sell coffee to the Army has been discussed with the Office of The Quartermaster General which states that, although it needs the coffee badly and would be willing to arrange payment in such a way that the funds could be kept in this country by the Colombian Government, it is impossible for the Army to purchase supplies on the basis of prices that may prevail at some time in the future. The Office points out that similar proposals have been made concerning many other commodities and have universally been declined. The Army would prefer to purchase the coffee through regular trade channels and thus to facilitate maintenance of the normal and usual operation of the coffee trade in accordance with article XVII of the Inter-American Coffee Agreement.

The Embassy is requested to bring the substance of the foregoing to the attention of the Colombian Government, pointing out that, although the Army appreciates the offer of President López, it is impossible to accept the price provisions thereof. The Embassy is also requested to bring again to the attention of President López the Army’s urgent need for and desire to purchase Colombian coffee and to inquire whether the Colombian Government is agreeable to authorizing the Federation to sell coffee to the Army at present ceiling prices. It would appear that the Colombian Government, should it wish to do so, could keep the funds on deposit with banks in this country and delay using them as a basis for credit or monetary expansion in Colombia until such time as it may desire.