811.5017/2–2045: Telegram

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

250. ReDepts 201 of February 17.67 President López requested me to call today to discuss the proposed purchase of 500,000 bags of coffee by the US Army. He said that the Colombian Government would authorize the National Federation of Coffee Producers to sell the entire amount of 500,000 bags at present ceiling prices from its own stocks, [Page 875] such sale to be made within the 1944–5 current quota. It was pointed out to the President that article XVII of the inter-American coffee agreement provided that normal trade channels should be maintained in so far as possible, and that violent protests would undoubtedly be received from local exporters if they were not permitted to participate in this business. The President replied that the exporters did not have the coffee and could not afford to sell at ceiling prices, hence the only way in which the Army could expect to obtain the coffee would be by direct sale from the Federation’s stocks.

The President emphasized that by making the sale through the Federation the dollar receipts could be frozen and thus the danger of giving another impulse to currency inflation could be avoided. He feels strongly on this subject. Please see my No. 4 of January 2.68

The Department’s and Army’s reaction to this offer is requested by telegraph.

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