811.516 Export-Import Bank/11–1948: Telegram

The Acting Secretary of State to the Embassy in Colombia


533. For info Emb. Eximbank Board has considered thoroughly Colombian Govt credit application. Board believes that in present financial and economic circumstances a loan could provide only [Page 473] temporary assistance and repayment might be difficult but that, if Colombians were to take essential fiscal and monetary steps including balancing budget, restricting credit, reducing import demand, revising exchange rate, improving exchange controls, etc., along lines agreed upon by representatives International Monetary Fund and Colombian Govt, a credit could be extended for productive purposes which would have permanent benefit and could more readily be repaid. Before such a credit were established Colombian Govt would need to agree with Bank upon program for utilization of credit setting forth specific categories of goods to be purchased and specific industries or purposes to which such goods were to be devoted.

Board has requested that Emb make oral statement to Colombian Govt along following lines:

Eximbank Board has been giving serious consideration to Colombian Govt loan application. Board does not feel that it can reach sound decision either for or against credit pending action in Colombia on pending proposals for solution Colombia’s internal and international financial problems. Board has inquired incidentally as to when final settlement of defaulted departmental and municipal bonds is expected. Board is inclined, if effective fiscal, monetary and exchange program should be enacted by Colombian Govt, toward consideration credit of not more than $20 million for purchase of capital goods to be used in development of Colombian economy provided that prior to approval of credit Colombian Government can delineate program satisfactory to Bank for utilization of credit indicating specific categories of goods to be purchased and specific industries or purposes to which such goods are to be devoted.”1

  1. In telegram 535, November 19, not printed, the Acting Secretary stated: “Deptel 533 you should unless you perceive objection also convey thought not mentioned reftel that Dept’s attitude on economic cooperation will be definitely influenced by ColGovt’s attitude toward existing international agreements” (811.516 Export Import Bank/11–1948).