100. Memorandum From the Deputy Assistant Secretary of State for Economic Affairs (Kalijarvi) to the Assistant Secretary of State for Inter-American Affairs (Holland)1


  • Nicaragua: Request for Limited PL 480 Sales

After careful consideration of the memorandum of the Bureau of Inter-American Affairs of May 14, in conjunction with Managua’s telegram No. 252 of May 9,2 we believe the supplemental information and arguments in favor of a limited PL 480 program for Nicaragua would be insufficient to overcome objections to the program previously raised in the ISC on two previous occasions. Moreover, since the Nicaraguan request for a Title I, PL 480 program was presented, Nicaragua has purchased for dollars substantial quantities of several of the commodities requested, notably white com from the United States and wheat flour from Canada, and can be expected to continue to make such purchases to meet its essential domestic requirements for which it has the necessary dollars.

Aside from the substantive objections to the Nicaraguan proposal, a further procedural difficulty has arisen to obstruct the reopening of this case in the ISC, even on the limited basis proposed by ARA. Largely on account of the adoption of a new price policy for cotton exports, the Department of Agriculture is temporarily confronted by a shortage of appropriated funds with which to finance outstanding Title I, PL 480 programs on which the United States has undertaken negotiations.

We are of the opinion that the Department should explain the foregoing circumstances to the Nicaraguan Government and suggest that it might be more expeditious as far as immediate requirements are concerned, to obtain the commodities desired “on credit” by exploring the possibility of arranging with sellers in the United States to handle Nicaraguan purchases under the CCC export credit program, initiated by the Department of Agriculture on April 25, 1956. (This facility was not available when Nicaragua made its original request for a PL 460 program.) This suggestion has been made by the Department of Agriculture which believes that the Nicaraguan Government should have no serious difficulties in providing [Page 210] such guarantees as might be required in order to qualify under the CCC export credit program.

Regarding future requirements, if an emergency situation should develop with which Nicaragua could not cope with its own resources, we would be prepared to consider a new request for a PL 480 program.

  1. Source: Department of State, Rubottom Files: Lot 59 D 573, P.L. 480, Nicaragua. Official Use Only.
  2. See footnote 2, Document 98.