823.2542/10–454
Memorandum by the Deputy Assistant Secretary of State for Inter-American Affairs (Woodward) to the Under Secretary of State (Hoover)
Subject:
- Toquepala Loan
Discussion:
In order to send Mr. Holland the latest information concerning the consideration by the Eximbank of the Toquepala loan, I asked General Edgerton1 on October 3 whether the Eximbank expected soon to make a specific recommendation to the National Advisory Council concerning the action to be taken on the loan application. General Edgerton, who had implied on September 23 that he considered the Eximbank to have sufficient information upon which to complete its study and make a firm recommendation, now said that he was in doubt concerning the sense of the NAC discussion on September 22, in which you took part. I told General Edgerton that I had the distinct impression that it was the consensus that the loan could be made, if the higher figures for the total amount of United States exports of goods and services involved—stated to be over $100 million—should prove to be accurate estimates. I added, however, that I believed you considered it would be desirable to have some further discussion with the American Smelting and Refining representatives concerning the identity, and possibly the amount, of private participation other than their own.
The Bank does not appear to be moving ahead with its study of the application. If the application is to be approved, it is important that action be taken within the next few weeks in order to give an outstanding example of the use of the Eximbank in economic development, prior to the Rio Meeting of Economic and Finance Ministers.
General Edgerton made the general remark that the Eximbank had already given a tentative commitment to participate in the venture to the extent of $60 million and that he thought, after further consideration, the Bank might find it possible to go substantially higher.
On the evening of October 3, by coincidence, I happened to be talking with Mr. Robert Guggenheim, recently-returned Ambassador to Portugal, and he mentioned on his own initiative that the Kennecott Company and A S&R are joining together in financing the Toquepala project. This may indicate that the minority private investors already lined up by A S & R are principally the Kennecott Company. If A S & R has already solicited participation from Kennecott, this might satisfy Secretary Humphrey, who expressed the view on September 22 that [Page 1521] other large United States copper companies might be willing to provide a large part of the capital which is being requested from the Eximbank.
Recommendations:
That you authorize me to make arrangements for Mr. Brownell of A S & R to come to see you, and to see General Edgerton subsequently, “in order to clarify certain points” with respect to the loan application.
That you ask Mr. Brownell who the other prospective private investors are, and form your own opinion as to whether A S & R should be expected to obtain larger private participation.
That you then express your views to General Edgerton, and possibly also to Mr. Humphrey, in order to encourage the Eximbank to make a specific recommendation on the loan application.
Telephone Report
Date and time of call—2:45 pm October 8, 1954
Participants: Mr. Hoover and General Edgerton of Eximbank
Subject: Toquepala loan.
Abstract of conversation: In response to Mr. Hoover’s query about the status of the Toquepala loan, Gen. Edgerton stated that the Eximbank still has it on hand under advisement of the Treasury people and that he hasn’t made any final commitment. The new modifications have been under study and the project is ready for the Executive Committee to work on now. A day or two ago the General had corrected a misunderstanding about total amount of dollar expenditures which now stand at $105 M. for supplies, services at $20 M. and total construction costs $180 M., bringing total probable requirements to $224 M. The minimum the bank would lend would be $60 M. and could probably stretch it to $75. His Board members are going to be away for a while but the General expected that the next week or two would bring the problem to a firm position. Mr. Hoover elicited from him the promise to move a little more quickly.
Gen. Edgerton added that they would be influenced by what they felt was the attitude of NAC and that the Department should not get involved to the extent that the Toquepala people got the idea that they are making their sale in the Department.
- Managing Director, Export-Import Bank.↩