Memorandum of Telephone Conversation, by the Assistant Secretary of State for American Republic Affairs (Braden)


Ambassador Cooper telephoned to me at approximately 4:45 this afternoon. He said that he, Donnelly, and others had had luncheon today with President Bustamante. The President had informed him that speed was of the essence and that, therefore, the Peruvian authorities were rapidly preparing a unilateral offer to be presented next Thursday, and that in making this offer, they had to take into account not only Peru’s ability but what they could get through Congress.

The Ambassador went on to say that not only the President but also Haya de la Torre and others were very much concerned about the Argentine loan to Chile. On the other hand, however, they had been given to understand by Argentina that she was willing to make a loan to Peru and, after all, Argentina had the two things that Peru needed most, to wit, money and food; that, of course, Peru did not wish to join a bloc, but it was necessary for her to get a loan. In fact, the Ambassador thought that one of the reasons why Haya de la Torre had cancelled his trip to Cleveland was that he did not wish to run the danger of returning to Peru without a loan.

The Ambassador had tried to impress on the President the idea of paying 3 per cent even though ½ Per cent of this would have to be in the form of scrip.

I replied that insofar as a unilateral offer was concerned, I would keep to hell and gone “as far away from it as I possibly could”, and that in my opinion the Peruvians were being very short-sighted and would do themselves much injury. The Ambassador replied that the [Page 1265] President had said that the debt was not of his making (sic), to which I observed that it was the making of the Peruvian government whether it was done by one of his predecessors or not and it was their obligation. The Ambassador agreed with me but said that they definitely had the debt on their agenda. I said that they ought to have it on their conscience.

The Ambassador reverted to the possibility of an Argentine loan. I said that that would probably work to the disadvantage of both parties in the end but that was their business and not mine, and if the Peruvians wanted to make such a loan “to go to it”. I reiterated that as far as the unilateral offer was concerned, the Peruvians would be making a sad mistake.

The Ambassador also referred to the Sechura matter as being under way.

I expressed my appreciation to the Ambassador for his having called, and wished him a Happy New Year which he reciprocated.

Spruille Braden