711.23/7–947
Memorandum of Conversation, by Mr. James Espy of the Division of North and West Coast Affairs
| Participants: | Dr. Enrique García Sayán, Minister of Foreign Affairs, Peru |
| Señor Jorge Prado, Peruvian Ambassador to the U.S. | |
| Señor Juan Chavez, former Peruvian Commercial Counselor | |
| Señor Carlos Alzamora, Peruvian Commercial Counselor | |
| Mr. Willard L. Thorp, Assistant Secretary | |
| Mr. Norman T. Ness, Director OFD | |
| Mr. James H. Wright, Acting Director, ARA | |
| The Honorable Prentice Cooper, U.S. Ambassador to Peru | |
| Mr. James Espy, NWC |
A meeting was held this afternoon at 3:30 p.m. in Assistant Secretary Thorp’s office for the purpose of discussing the economic and financial problems of Peru which the Foreign Minister had indicated he desired to take up with the Department.
The Minister presented briefly the present financial and economic [Page 1012] situation in Peru stressing the current difficult foreign exchange position. In remedy he said Peru was in need of loans from the U.S. He explained that what would be particularly helpful would be dollar credits to help finance a number of industries in the country.
Mr. Thorp asked the Minister what projects the Peruvian Government had in mind. In reply the Minister said that he had not brought with him to the meeting all the material that had been prepared on the subject but that offhand he could mention such enterprises as irrigation, railroads, petroleum and coal. He then went on to say that the Banco Industrial of Peru had applications for loans aggregating an amount of some $30 million dollars which had been received from small enterprises in the country. He inquired whether an open credit could be granted by the Export-Import Bank to the Banco Industrial in approximately this amount for re-loaning, by the latter Institution, to the enterprises.
Mr. Ness informed the Minister there would be no possibility of such a credit from the Export-Import Bank for the reason that it was against the Bank’s policy to make available such open credits. He explained that the Bank only made loans for specific projects.
The discussion then turned to the $30 million dollar line of credit which had been previously established for Peru by the Export-Import Bank but which the Peruvian Government had been informed could not be drawn upon until a satisfactory settlement had been made of the Peruvian Foreign Debt in this country. The Minister asked whether this credit which had lapsed as of December 31, 1946 could be re-established and used by Peru. In reply he was informed that such was not feasible.
Mr. Thorp then said that the Department had consulted the Export-Import Bank during the past few days and that it had been decided that the Bank would now be prepared to give appropriate consideration, on their economic merits, to applications for loans made by the Peruvian Government. Mr. Thorp added that this was, of course, no assurance of the granting of loans by the Export-Import Bank to Peru but that, in effect, it lifted the previous ban and that Peru was to be considered as one of the countries whose loan applications could now be presented to the Bank. The Minister expressed his gratification on hearing this announcement.
The question then arose whether some sort of formal communication should be addressed to the Peruvian Government to this effect. It was suggested that possibly the Export-Import Bank could send a letter to the Peruvian Ambassador. Mr. Thorp and Mr. Ness expressed doubt as to the appropriateness of such action but it was agreed [Page 1013] that the matter would be broached, later in the day, to Mr. Martin26 of the Bank.
Ambassador Cooper then said that speaking on behalf of Peru he believed the question of timing was of great importance. He pointed out that the Peruvian Congress would meet on July 28th and that, naturally, the Peruvian Government would want to go before it with something concrete in the way of evidences of a financial character. This point was left with the understanding that the door had now opened for the application for credits by the Peruvian Government to the Export-Import Bank and that the next step would be for the Peruvian Government, if it so wished, to submit sound project applications.
Following the discussions on this subject, Mr. Thorp referred to the recent import restrictions imposed by the Peruvian Government and inquired whether the Peruvian Government proposed to initiate further restrictions. Mr. Thorp explained that this question did not imply criticism or representations in the matter but that we hoped, as provided by the United States-Peruvian Trade Agreement, consultations would first be held between the two Governments before any further restrictions would be placed on imports from the U.S. The Minister said that he could give no assurances that there would be no further restrictions but upon his return to Peru, he would immediately get in touch with the Ministers of Finance and National Economy and bring this to their attention.
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- William McChesney Martin, President of the Export-Import Bank.↩