825.51/12–246
Memorandum by the Assistant Secretary of State for American Republic Affairs (Braden)29
confidential
[Washington,] December 2, 1946.
I refer to my memorandum to you of October 1130 regarding the Chilean Fomento application for Export-Import Bank credits.
With regard to the application for credits from the International Bank, I have two observations:
- 1.
- I notice that the application for the latter credits includes the forest industries project which was turned down when the application was made to the Export-Import Bank. I do not know what considerations the United States representative on the International Bank will be instructed to take into account, but it would look very odd if, after having been turned down by Eximbank, Fomento could have the same project approved simply by going across the street to the International Bank, which is also substantially supported by U.S. taxpayers. (These comments refer to such specific projects as this; [Page 619] not to the general question of foreign countries looking to the International rather than to the Eximbank for future development credits.)
- 2.
- My earlier concern about the ability of Chile to service further heavy dollar obligations is naturally greatly increased at the prospect of those obligations being augmented by another $30,000,000 to $40,000,000. I see very little in the proposed new projects which will add to Chile’s capacity to service dollar indebtedness. NAC experts to the contrary, I foresee either difficulty in servicing obligations to the Eximbank (now committed for more than $75,000,000), not to mention doing something on past indebtedness, or much more restrictive import controls in Chile.
Spruille Braden