823.51/2–2547
Memorandum of Telephone Conversation, by the Chief of the Division of North and West Coast Affairs (Wells)
I telephoned the Ambassador15 a summary of the Bondholders’ Council’s comments and counter offer to the Peruvian proposal which [Page 1003] the Ambassador telephoned to the Under Secretary yesterday. The terms compare as follows:
| Peruvian Offer | Council’s Counter Offer | |||
| Interest | Amortization | Interest | Amortization | |
| 1% | 1% | 1947 | 1% | ½% |
| 1–¼% | 1% | 1948 | ½% | |
| 1–½% | 1% | 1949 | increasing | ½% |
| 1–¾% | 1% | 1950 | ½% | |
| 2% and thereafter | 1% | 1951 | to | ½% |
| 1952 | 3% and thereafter | ½% | ||
I added that a telegram is already on the wires and suggested that he await its receipt before communicating the Council’s counterproposal to the Peruvian Government.
The Ambassador at considerable length reviewed his arguments for acceptance of the Peruvian proposal. He appeared to feel strongly that the Peruvian offer represents the maximum, especially since there is only a hope for future credits even should the offer be accepted by the Bondholders’ Council, and that it is extremely doubtful whether another proposal would have any chance of approval by Congress this session. Therefore, for these reasons (and while realizing the Embassy is only an intermediary) he asked whether he should, in transmitting the Bondholders’ counterproposal, encourage the Peruvian Government to push its own offer through Congress and take chances on its being ultimately accepted by the Council. I replied, “No, I wouldn’t do that”, and suggested that he merely transmit the Council’s counterproposal and ascertain the reaction. He agreed.
- The Ambassador in Peru.↩