Office of the Historian

ETA–53. Memorandum of Conversation, by Joseph Carwell of the Office of Central American and Panamanian Affairs1

Washington, September 30, 1960

SUBJECT

  • Meeting on Central American Regional Bank

PARTICIPANTS

  • Dr. Lugo Marenco, Minister of Economy (Nicaragua)
  • Lic. Jorge Bueso Arias, Minister of Economy (Honduras)
  • Lic. Roberto Ramirez, President, Central Bank of Honduras
  • Dr. Pedro A. Delgado, Acting Minister of Economy (El Salvador)
  • Dr. Alberto Fuentes Mohr, Special Representative, Minister of Economy (Guatemala)
  • Ing. Mario Dalponte, Economic Counselor, Embassy of El Salvador
  • Dr. Alfonso Rochac, Executive Director, BID
  • Ing. Alfredo Hernandez, BID
  • Lic. Manuel Benfeldt, Minister of Finance (Guatemala)
  • Department of State:
  • ARA-Assistant Secretary Thomas C. Mann; ARA-Mr. Milton Barall;
  • REA-Mr. Alex Rosenson; OAP-Mr. Joseph Carwell

Assistant Secretary Mann opened the meeting with the statement that it is his hope that the United States Government will be able to make available to the proposed Bank $10 million ($5 million from the Development Loan Fund and $5 million from the International Cooperation Administration), and that he understood that ICA might be willing to grant $2 million (non-interest bearing) cash in the present fiscal year, as part of the “capitalization” of the Bank. A Presidential determination for the additional $3 million for the following year would be required. Mr. Mann underscored the fact he could not speak for the DLF and ICA, even less for the Congress of the United States, and that present plans must be considered to be tentative.

Mr. Mann pointed out that regarding the DLF portion of the finances, there are strong policy grounds for not paying out money in advance of actual need, and that Congress has been critical of DLF for channelling too much money through development banks rather than directly. ICA has more flexibility in this regard. Whether the additional $3 million financing Aram ICA will be in the form of a loan or grant, is uncertain. However, Mr. Mann stated, he will try to persuade ICA that it be in the form of a grant.

Mr. Delgado raised the question as to whether it was possible for the United States to increase its contribution to the Bank above $10 million. [Typeset Page 133] Both Mr. Barall and Mr. Rosenson replied that if the Bank places its loans wisely and can justify the need for increased funds, there would probably be no difficulty in finding additional funds.

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Another question raised by Drs. Rochac and Delgado, in view of the known IBRD interest in forming a regional bank to service small industries, was whether it would be inappropriate for the Bank to engage in this type of lending activity. Mr. Mann replied that this was a matter for the Central American representatives to explore directly with the IBRD.

In conclusion, Mr. Mann stated that he thought that during the next two weeks, this group, as the representatives of the proposed Bank, should (1) meet with State, DLF, and ICA to work out the terms regarding loans and grants; (2) draw up a charter for the Bank, and (3) prepare a press release acceptable to the United States Government announcing the formation of the Bank.

  1. Source: Department of State, Central Files, 813.14/9–3060. Confidential. Drafted on October 6.↩