816.51/1166

Memorandum by the Associate Adviser on International Economic Affairs ( Collado ) to the Chief of the Finance Division ( Livesey )

Mr. Livesey: Mr. Arturo Bustamante, Under Secretary of Finance of El Salvador, called upon me to explain some of the aspects of the Salvadoran Economic Mission which he heads. He recalled our discussions of last year regarding the Salvadoran public debt and stated that he was authorized to enter into preliminary discussions with the Foreign Bondholders’ Protective Council looking towards a definitive settlement. He stated that he had convinced the Minister of Finance and the President64 that such a settlement was essential, and although he is not empowered to conclude negotiations, he is empowered to work out an arrangement which he would have to return to El Salvador to confirm. He stated that he was anxious to handle the Salvadoran situation in almost exactly the same terms as the Colombian debt has been handled,65 that is, fund the arrears of interest and set new bonds or certificates with an interest rate of perhaps 3%, and a total payment in dollars to be made annually which would include amortization.

[Here follow details on Mr. Bustamante’s approaching appointment with Mr. Dana Munro, President of the Foreign Bondholders Protective Council, and a comment, covered by a later document, on the expense of maintaining a fiscal agency.]

Emilio G. Collado
  1. Maximiliano H. Martínez.
  2. For correspondence on the Colombian debt, see Foreign Relations, 1942, vol. vi, pp. 204 ff.