Foreign Relations of the United States, 1961–1963, American Republics; Cuba 1961–1962; Cuban Missile Crisis and Aftermath, Volumes X/XI/XII, Microfiche Supplement

62. Memorandum of conversation, September 18, between Rusk and Ambassador Sanz de Santamaría¹

September 18, 1962, 2:15 p.m.

SUBJECT

• Colombian Request for $60 Million Balance-of-Payments Loan and Counterpart Release

PARTICIPANTS

• The Secretary
• Ambassador Sanz de Santamaría of Colombia
• José Camacho-Lorenzana, Minister, Colombian Embassy
• Mr. Thompson, ARA/WST

Ambassador Sanz made a farewell call on the Secretary this afternoon. He explained that he would be going to New York this weekend, would sign the coffee agreement on September 28 and return to Colombia the following day to assume his new duties as Finance Minister. He said he wished to thank the Secretary for the many courtesies extended to him during his mission in Washington. The Secretary said that the occasion of Ambassador Sanz’ call was a sad one in many ways. He said he was sure Ambassador Sanz was aware that he was leaving many friends in Washington, including the Rusks.

Ambassador Sanz said he hoped the Secretary was aware of the fine job Ambassador Freeman has been doing in Colombia. He said he mentioned this particularly because Ambassador Freeman has now been in Bogota for two years. According to U.S. practice, this might indicate that the time has come for his transfer. The Ambassador hoped that this would not occur. He said that Ambassador Freeman’s thorough knowledge of Colombian affairs and his relationship with Colombian leaders would be of great help to him in his (Sanz’) new assignment and that he would hope to be able to count on working with him for some time to come. The Secretary said he welcomed these remarks since Ambassador Freeman is an old friend. He said he had great confidence in Ambassador Freeman and had not given any thought to his transfer.

Ambassador Sanz pointed out that he will be assuming a difficult task as Finance Minister. The World Bank and the International Monetary Fund have been insisting upon the need for exchange reform in Colombia. President Lleras believed that it would be unwise to add the impact of such a measure to the political uncertainty attendant upon the national elections and the inauguration of a new government. It now remains for the new government to carry out this step. The Ambassador said he had already invited the Fund to send representatives to Colombia to begin work on a new stand-by agreement. They will arrive with him, spend approximately two weeks, and then return to Washington to obtain IMF approval of the new agreement. Ambassador Sanz stressed that he was fully prepared to carry out the IMF recommendations on exchange reform in the hope that traditional monetary techniques would have good effects. He said that President Valencia was aware of his views on this matter. The Ambassador said he wished to emphasize how important U.S. support would be in this effort. While the DAC meeting in Paris had gone well, he said he had no real confidence in European support. The Europeans simply do not have the United States’ interest in Latin America. As a result it will be principally the United States, the IBRD and the IDB who will be moving in support of Colombia’s development effort.

The Ambassador said that the timing of U.S. support would be extremely important and that he hoped it would not arrive too late. He noted that Colombia is requesting an additional $60 million in balance-of-payments assistance and that Colombia will need the release of peso counterpart in order to offset the budgetary effects of devaluation. He said that December would be too late for this assistance. Colombia hoped to clean the slate in 1962 with regard to the old obligations which have caused the current balance-of-payments problem and to make a real beginning on the development effort in 1963. The Secretary assured the Ambassador that we would give very careful consideration to the Colombian request.

The Ambassador suggested that the Secretary attend the signing of the coffee agreement in New York on September 28 and concluded his visit with a reiteration of his standing invitation to the Secretary to visit Colombia.

1. Farewell call of Ambassador; Colombian request for $60 million balance-of-payments loan and counterpart release. Confidential. 2 pp. DOS, Secretary’s Memoranda of Conversation: Lot 65 D 330.