Memorandum by the Adviser of the Office of Financial and Development Policy (Livesey) to the Chief of the Division of Caribbean and Central American Affairs (Cochran)


… Late in the afternoon of December 10 the Council telegraphed the British Council as follows:

“American representatives in Salvador telephone no settlement possible if customs lien is retained but believe prompt settlement likely if lien waived. I am withholding telegram which would support your 3% suggestion as think it undesirable to make any concession if settlement impossible. Would you not be willing to withdraw insistence on preserving lien if provision is made for automatic priority restoration applicable to all series if any lien established later for other debt. This provision appears to us equivalent to lien. Responsibility for delaying service resumption in these circumstances seems grave. Signed Rogers.”

It will be seen that the American Council proposes to support the British request for a 3% interest rate on arrears instead of the Salvadoran proposal of a 2% rate in case the British Council drops its insistence on a customs lien. The negotiation may of course break down on this point even if the British waive the customs lien.

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