821.51/2574

Memorandum by the Adviser on Political Relations ( Duggan ) to the Under Secretary of State ( Welles )

Mr. Welles: Mr. Traphagen will be unable to come to Washington tomorrow on the Colombian debt matter. He has scheduled two meetings for which persons are coming from out of town. The first really convenient day for him would be Saturday of this week. I have, therefore, notified Mr. Jones that the proposed meeting for tomorrow is off.

Mr. Traphagen gave no indication that he could be persuaded to use his influence with the Executive Committee of the Council to support the Colombian debt settlement as embodied in the Colombian decree. He not only showed some feeling that at the meeting in your office on July 6 the interest rate had been dropped to 3 percent from 3½ percent, which the Department had previously indicated it thought fair, but he also remonstrated that the settlement would not be worth much if it contained the clause providing for suspension in case of financial stringency. If the Colombian Government now thought such a clause necessary he then favored a temporary settlement.

Mr. Traphagen said that if it were urgent that a meeting be held, he would suggest that Mr. White attend in his stead. He, Mr. Traphagen, was not anxious again to become involved in the Colombian debt settlement and Mr. White, with whom he had recently discussed the matter, could present his views.

It was left that I would call Mr. Traphagen back if it was desired that he come to Washington later this week.

Mr. Traphagen’s attitude was disappointing from the standpoint of holding out hope that he might serve as a vehicle to persuade the rest of the Executive Committee of the desirability of the Colombian settlement. I very much doubt whether a conference with him would be of any use.

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With regard to Mr. Traphagen’s suggestion of a further temporary settlement, the Colombian Ambassador maintains, and there would seem to be support for his contention, that the Government is no longer empowered to enter into a temporary settlement.

May I have your further instructions?

Laurence Duggan