The Ambassador in Colombia ( Wiley ) to the Secretary of State
[Received 9 p.m.]
307. Reference my 51 of January 10, 1945.69 The long promised memorandum regarding Colombia’s need for higher United States [Page 877] coffee prices has just been received from President López. This lengthy memorandum of 21 pages justifies the price increase on the basis of United States 1942 agricultural ceiling prices, rising food prices in Colombia, rising coffee production costs, low standard of living levels for Colombian coffee growers, the impossibility of a thorough-going control of internal inflation, the recent arbitrary coffee quota increases, the world wide coffee shortage threatened by the opening of European markets, and the necessity for popular support here of the Colombian Government’s policy of cooperation with the United States. Although no actual statistics for production costs are offered, particular stress is laid on the argument that without an increase in coffee prices the maintenance of the present exchange rate is essential, and that with the increase in coffee exportation the currency circulation is greater, raising in turn the costs of production, but without affording relief to the grower in the form of higher prices per sack.
The Spanish text of the memorandum together with a first draft translation thereof is being forwarded by today’s air mail pouch.70
Repeated to Rio.