821.51 Cooperation Program/7: Telegram
The Ambassador in Colombia (Braden) to the Secretary of State
[Received 9:45 p.m.]
197. For Duggan. Department’s 138, June 5. I consider it essential insofar as possible that Export-Import Bank obtain commitments from Turbay to adjust several matters mentioned in Clayton’s [Page 71] letter to Under Secretary of May 12 forwarded with Department’s instruction no. 69999 including also mention of desirability for reform in petroleum law. Moreover I feel that of ten to twelve million to be loaned no more than six or seven million should be made available this year and balance should be earmarked for next year.
In connection with foregoing and referring to my telegram No. 160 of May 191 am reliably informed that no less than 115,000 yards of cotton textiles have been ordered in Japan by the Department of Cundinamarca although such products were not included in the list attached to report number 515 of March [May] 5.1 Likewise no less than $40,000 in electric light bulbs have been ordered in Japan and Japanese are with some success making drive to obtain agents in Colombia for a wide variety of manufactured and consumer goods. The office of Exchange Control on July [June?] 5 added a number of articles to the already ample list of products which can be imported from Japan on free exchange basis, among those were porcelain ware, buttons, wool yarn and additional agricultural machinery. All of this has been done under the guise of obtaining raw materials for national industry but only a part of the products exempted from compensation may be so classified and the balance are obtainable without undue delay in the United States.
As stated in my telegram No. 160, it is definitely against our interests to use exchange resulting from American purchases and loans to stimulate sale of Japanese manufactured and consumer goods thus indirectly supplying Japan with foreign exchange and giving them opening in this market from which it will be difficult to dislodge them. I urge we be adamant in not lending a cent until Colombia is committed to confining Japan to a bona fide trade basis. In other words, this country in all fairness should only purchase from Japan those articles which cannot be obtained in the United States.
While I have repeatedly in a discreet manner broached matters discussed in paragraph No. 1 above to the authorities here, I have not recently touched upon the Japanese because several important persons appear to be getting side commissions thereon whereas bank can discuss all these situations without embarrassment. Consequently in view of defense and necessity for maintaining cordial relations with the Colombian authorities by the Department and this Embassy, I recommend Export-Import Bank assume all responsibility for the presentation of and insistence on all our aforementioned requirements.