811.5017/2–2045: Telegram

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

217. Re Embs 250, February 20. Should the Colombian Government be unwilling to authorize the sale otherwise, the Army is agreeable to purchasing the 500,000 bags of coffee under an arrangement that would not make use of the exporters in Colombia. The Army would pay the f.o.b. Colombian seaport equivalent of the Office of Price Administration ceiling prices, without any deduction for import commissions.

In purchasing the coffee the Army would make use of not more than six United States importers. Use of the importers should not in any way interfere with the plans of the Colombian Government not to permit the funds to serve as the basis for further inflation in Colombia, since the Army is agreeable to making payments for the coffee in the United States to any one who may be designated by the Colombian Government. Furthermore, it would in no way affect the price received by the Federation since any compensation the Army would allow the importers would be in the form of a commission over and above the Office of Price Administration ceiling. Under Office of Price Administration regulations such a commission may be paid to import jobbers but may not in any event be passed on to their suppliers.

[Page 876]

In view of the foregoing, it is assumed that the Colombian Government would not object to the use of importers by the Army, especially in view of the fact that it would greatly facilitate the Army’s handling of the coffee. Please confirm this assumption so that the Army may arrange for the nomination of the importers.

The Army believes that the transaction might be consummated more rapidly if the importers made offers to the Federation, but is agreeable, should the Federation so desire, to have the Federation make offers through the importers to the Army. The price will be the same in either case.

Please take all possible steps to expedite this sale, since the Army desires to make plans for shipment of the coffee at the earliest possible moment. Because of the location of the coffee it should be possible to import it long before the million bags that are to be obtained from Brazil. Please inform the Department by telegram of all developments.