823.51/2–2447
Memorandum of Telephone Conversation, by Mr. Alexander Schnee of the Division of North and West Coast Affairs
| Participants: | Ambassador Cooper, American Embassy, Lima, Peru |
| Mr. Livesey—OFD | |
| Mr. Schnee—NWC |
Early this afternoon Ambassador Cooper called Under Secretary Clayton11 to report terms of a debt settlement which the present Peruvian Administration has under consideration. As Mr. Clayton was not clear as to whether the terms of settlement referred to interest only or interest and amortization, he requested that a call be put through to Ambassador Cooper to clarify this question.
The Ambassador informed me that the terms of settlement were as follows:
| Interest | Amortization | |
| 1947 | 1% | 1% |
| 1948 | 1–¼% | 1% |
| 1949 | 1–½% | 1% |
| 1950 | 1–¾% | 1% |
| 1951 and thereafter | 2% | 1% |
The Government would buy in the bonds at the market value or at par if they reached that figure.
The Ambassador stated that the Peruvian Government understands that it will not receive a loan from this Government as a quid pro quo for the debt settlement, but that the Government is endeavoring to bring about a settlement of the debt because it recognizes the necessity of restoring its credit position. The Ambassador expressed the opinion that the Council should accept this offer which is superior to the offer reported in the Embassy’s Telegram 143 of February 19,12 and, according to the Ambassador, is in some respects better than the Montero Bernales’ offer. The Ambassador thought the Council should bear in mind the fact that the bondholders had received no service at all for seventeen years. The Ambassador believes the present Finance Minister is very competent and considers it important that this matter be settled before the adjournment of the Peruvian Congress on February 28.
[Page 1002]Several times during the conversation I pointed out to the Ambassador the fact that the Department could only transmit the terms suggested by the Peruvian Government to the Council which alone could accept or refuse an offer by the Peruvian Government.