821.51/2577
Memorandum by the Acting Chief of the Division of the American Republics (Bonsal) to the Under Secretary of State (Welles)
Mr. Welles: I telephoned Francis White last night regarding the Colombian situation. He had received a letter to the effect that the Colombian Government insists that a further temporary settlement is legally impossible. The letter also stated that the Department saw no reason to question this position.
I also told Mr. White that the Colombian Ambassador has been authorized by President Santos to send a letter to the Department stating that the clause in the decree of last July relative to the suspension of debt service in case of a decrease in revenues is not to be construed as a contractual condition to the disadvantage of the bondholders. In other words, a suspension of service would be a breach of contract.
Mr. White will be in Washington Monday morning to discuss this question with the Department. I said that I would endeavor to arrange for him to see you and would appreciate your informing me when you could do so. It would, of course, be highly undesirable for the Council to issue a statement opposing the permanent settlement now offered by the Colombian Government and in general approved by the Department.