Office of the Historian

PA–3. Memorandum from Jackson W. Wilson of the Office of South American Affairs to the Director of the Office of South American Affairs (Bernbaum)1

Washington, May 26, 1958

SUBJECT

  • Paraguay: Recommended Program

1. Political

Continue to maintain correct friendly relations with present regime but

a. avoid showing any special favor for leaders of Government themselves

b. emphasize U.S. friendship for Paraguayan people rather than for Government

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Maintain policy of strict non-intervention in Paraguay’s internal affairs, but

a. Encourage leaders of Government to move toward more democratic forms.

2. Economic

Continue to support Paraguay’s stabilization program with financial assistance for sound development projects but with emphasis on finishing projects now under way.

Export-Import Bank Loans: Sympathetically consider applications for specific documented development projects with Paraguay’s debt carrying capacity. Specifically, support Paraguay’s request for additional $917,500 to complete waterworks project.

Development Loan Fund: Support Paraguayan requests for loans to

a. cover local currency costs of Export-Import Bank projects already under way.

b. cover both dollar and local currency costs of a basic communications system and surfacing of road to Brazil.

c. cover dollar costs of expansion of electric power facilities at Asunción, Encarnación and Villarrica.

d. provide small dollar credits of developmental nature to business and industry through a development bank-type institution.

P.L. 4802 Agreement: Support sale of surplus agricultural products to Paraguay when this will not interfere with normal marketings of other supplying countries.

  1. Source: Department of State, Central Files, 611.34/5–2658. Confidential. Sent through the Officer in Charge of River Plate Affairs, Livingston D. Watrous.↩
  2. For the text of P.L. 480, the Agricultural Trade Development and Assistance Act of 1954, see 68 State 454.↩