834.51/10–346: Telegram

The Acting Secretary of State to the Ambassador in Paraguay ( Beaulac )

confidential

215. Embtel 425 Sept 28,433 Oct 3,40 434 Oct 3. Eximbank denial Paraguayan $1 million loan based on considered opinion re Paraguay’s capacity service increased debt burden.

Eximbank considers Paraguay’s economic prospects far from satisfactory. Analysis Paraguay’s wartime balance of payments reveals increased gold and foreign exchange position due in large part to heavy borrowing—US, Brazil, Argentina, and that with serious diminution value exports due to world market conditions, climatic or other factors, debt service commitments already assumed likely to prove excessive. Other weighty considerations were Paraguay’s delays Eximbank debt service remittances, failure to establish organization or provide funds for systematic maintenance existing highways, and unauthorized use Eximbank credits for highway maintenance.

Dept carefully considered Emb reports referred to and concluded information contained or other factors did not justify pressing for favorable consideration.

Exambank informed Paraguayan Embassy Oct 2 denial loan application.

Acheson
  1. Neither printed.