823.51/2–2147
Memorandum of Telephone Conversation, by Mr. James H. Wright, Special Assistant to the Assistant Secretary of State for American Republic Affairs
| Participants: | Ambassador Prentice Cooper, American Embassy, Lima |
| Assistant Secretary Spruille Braden | |
| Mr. James H. Wright |
Ambassador Cooper telephoned Mr. Braden this morning to refer to his telegram no. 14310 in respect of the Peruvian unilateral offer looking to the resumption of partial service on its defaulted dollar bonds. The Ambassador stated that he wanted to get our reaction as quickly as possible, owing to the fact that Congress would go out of session on February 28. Mr. Braden said that the offer was such a poor one that there was nothing we could do about it and that we did not want to give the Peruvians any encouragement that the offer might be acceptable to the Foreign Bondholders Protective Council, Inc., who would have to be the judge. The low rate of payment was striking and particularly with interest of only ½ per cent, the remainder being dedicated to amortization to buy the bonds on the open market at distressed values. Ambassador Cooper said that was the best the Peruvians could do. Mr. Braden replied that they could do better and everyone knew they could do better, what with a military budget of 45 per cent of the total early outlay. Ambassador Cooper said that he too realized they could do better. Mr. Braden said that we wanted to do everything we possibly could to help Peru and particularly to help the incoming administration, but this was something we could not do anything on. The best thing the Ambassador could do was simply to [Page 1001] state our view that the present offer was too low and then rest our case without further to-do.
- Dated February 19, 1947, not printed.↩