825.51/10–247
Memorandum of Conversation, by the Assistant Chief of the Division of North and West Coast Affairs (Mills)
| Participants: | Señor Nieto del Rio, Chilean Ambassador |
| Norman Armour, Assistant Secretary | |
| Roberto Vergara, Chilean Representative of the Fomento Corporation | |
| Norman Ness, OFD | |
| Sheldon T. Mills, NWC |
Accompanied by the Chilean Ambassador, Señor Nieto del Rio, Roberto Vergara, head of the New York Office of the Fomento Corporation, called on Assistant Secretary Armour today. He explained to Mr. Armour that during a recent visit to Chile he had prepared for the Finance Minister, Jorge Alessandri Rodriguez, a memorandum [Page 546] recommending a settlement with the foreign bondholders. Señor Alessandri had instructed him to try to reach such a settlement. Before approaching Rogers of the Bondholders Council, however, Señor Vergara wished to obtain the reaction of the Department of State and a promise of its cooperation. He outlined the plan which he would present to Rogers, namely amortization payments of 1% per year and interest payments to a rising scale starting at 1% in 1947, l–½ in 1948, 2% in 1949 and 1950, 2–½% in 1951 and 1952, and a final figure of 3% in 1953 and thereafter. The plan contains other “stipulations,” including cancellation of back interest, the return to the amortization fund of $27 millions diverted to other uses, and the retention of the present fiscal agents.
Señor Vergara was in Washington on October 1 and 2 when he discussed the plan with Mr. Mills and other officers of NWC. Also prior to today’s meeting he had discussed it with Mr. Ness and Messrs. Corliss and Livesey of OFD. These departmental officers were in agreement that the Vergara plan was a most encouraging development and that, if Mr. Armour agreed, this should be conveyed to Mr. Vergara.
Mr. Armour expressed to Mr. Vergara his satisfaction in hearing that a serious attempt would be made to settle the debt problem. Mr. Ness suggested that an officer in OFD this afternoon telephone to Rogers of the Bondholders Council and advise him that the Department knew Vergara well and had confidence in his integrity, and that the Department had studied the proposals which Vergara would lay before him and felt that they offered a solution to the long standing disagreement between Chile and the Bondholders Council. Mr. Ness suggested that after a discussion with Vergara, Rogers probably would come to Washington at which time the Department could consider with him the terms of the Vergara plan.
Mr. Armour approved this proposed procedure.