821.61/74: Airgram
The Ambassador in Colombia (Lane) to the Secretary of State
[Received April 9—noon.]
A–274. My telegram No. 572, March 31, 7 p.m.44
President López45 had referred to the agricultural plan casually at a reception on March 27. He had stated in a somewhat joking vein, although obviously serious beneath, that now that the elections are over, the electorate is going to demand of the Government some constructive progress within the country, especially in the field of agriculture. He said he hoped therefore that we would endeavor to assist him and his country. I replied, in the same vein, to the effect that I did not wish to take part in internal politics but that I would be glad to see what could be done to help Colombia.
In view of the forewarning, I had with me the previous correspondence when the President summoned me on March 31. I asked him whether he had any concrete comments in addition to those made by his brother Miguel, as reported in Embassy’s despatch No. 1390, January 13, 1943. The President replied that he had some very concrete comments and proceeded to give them to me:
The people of Colombia consider, because Congress has authorized the issuance of sixty million pesos in economic defense bonds, that the Government is “overflowing” with money. Such is not the case. The following are the figures regarding the Government’s present financial obligations:
| Pesos | |
| 12,000,000 | 1942 deficit |
| 24,000,000 | 1943 estimated deficit |
| 5,000,000 | Debts to various Departments (State Governments) |
| 2,000,000 | Grant to Instituto de Fomento |
| 1,000,000 | Grant to Caja de Ahorros |
| 10,000,000 | Public Works, including buildings and roads |
| 6,000,000 | Miscellaneous appropriations |
| 60,000,000 | Total |
There is always the danger that the estimated deficit for 1943 of 24 million pesos may attain a higher figure, such as 36 million pesos, if conditions caused by the war continue at the present rate. The Government, therefore, finds itself in a financial situation which is critical and which it hopes the United States will find itself in a position to alleviate.
The Government has endeavored to avoid inflation through an increase of 35 percent of income taxes and a compulsory provision that 50 percent of the amount of income tax payments shall be invested in economic defense bonds.
Just as the President took the position in 1939, when a director of the Electric Light Company, that war was inevitable (against the advice of the other directors who tried to persuade him to buy machinery from Switzerland), now he takes the position publicly that the war will end within the next six or twelve months. If he did not take that position publicly, an economic and financial disaster might be expected in Colombia, due to the increasing critical situation of the Government because of lack of importations and consequent decreased revenue. The people of Colombia are in no mood to appreciate the seriousness of the situation. Instead of pulling together, they are indulging in luxurious, individualistic thought without regard for the morrow. In this Administration the President wishes to accomplish two things: (1) improvement in agriculture, and (2) road building. In the latter respect he contemplates the following highways: Medellín–Turbo; Medellín–Cartagena; Bogotá–Rio Hacha; Cali–Buenaventura; as well as lesser highways in the Putomayo.
The ten million dollar credit advanced by the Export-Import Bank to the Banco de la República in 1940 still has five years to run.46 Of this sum, the Banco de la República still has a balance of eight million dollars on hand. It would be of the greatest help to the Colombian Government if the Export-Import Bank, at the request of the Department of State, would extend for a period of eight years as from now a credit of eight million dollars to the Government of Colombia, permitting the Banco de la República to transfer its balance to the credit of the Government. The Banco de la República can well afford to do this, having sufficient reserves, and the extension of this credit to the Government would enable the Government not only to proceed with the liquidation of some of its obligations but also to start constructive work on road-building.
The President said that he would be extremely grateful to the Department for any support which it could give to this situation which, he assured me, he is not exaggerating in any respect.
In setting forth the President’s views as outlined above, the Department may wish to review Annual Economic Review No. 10, dated January 7, 1943, Report No. 160, dated March 16, 1943, and Report No. 185, dated March 29, 1943.47
- Not printed.↩
- Alfonso López.↩
- For correspondence concerning this loan, see Foreign Relations, 1940, vol. v, pp. 695 ff.↩
- None printed.↩