811.2323/11–846: Telegram

The Ambassador in Peru (Cooper) to the Secretary of State


1163. This morning I called on President Bustamante to extend official invitations to certain dinners and ceremonies incident to visit of units of US Fleet. President accepted our invitations and also is inviting Vice Admiral Fechteler to a luncheon on November 11 at palace. President has been ill for last few days and I was informed that I was first foreign diplomat he had seen since recovering from his illness.

Before leaving, yesterday’s action of the Peruvian Senate in authorizing Government to apply for 30 million dollar Export Import Bank loan was raised and President stated that he had in mind having a conference with me on that subject within next few days. My view is that time has now arrived to arrange for settlement of Peru’s external debt to US and that our position should be that no loan be forthcoming from Export Import Bank or any other US source until Peru’s indebtedness has been satisfactorily arranged for. Frankly, outlook is not good and there is no room for optimistic statements. However, Senate’s action again raises question and a firm stand on our part with reference to further loans could result in satisfactory settlement of Peruvian debt problem. Believe it would be ruinous to our chances of satisfactory settlement for US Government to give Peru any encouragement in Washington respecting 30 million dollar loan or any loan whatsoever until Peru’s external debt is satisfactorily adjusted.88

  1. In telegram 920, November 15, 1946, 7 p.m., the Acting Secretary observed: “Dept. entirely sympathetic your view no prospect favorable action on Peruvian loan application in absence acceptable settlement Peruvian bond default.” (823.51/11–1146)