102.8951: Telegram

The Ambassador in Peru (White) to the Secretary of State

410. Losa requests following be sent Truslow, RDC:

“Reurtel 387, April 19, discussions with Peruvian Government re extension agreements held in abeyance pending Embassy clarification of phrase in your instructions to me reading ‘such proposals should be made unconditionally, that is to say, no attempt should be made to obtain settlement of any pending or other matters as a condition to such extensions. Likewise, you are not authorized to accept changes in these agreements as a condition to Peru’s acceptance of such extensions’.[”]

Other passages telegram 387 and Department’s circular telegram April 19, noon,61 indicate certain responsibilities of Embassy in this matter. See also circular airgram March 30, 9:25 a.m.,62 all of which is important in the light of possible future congressional investigation.

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While Embassy naturally cannot judge RDC renewal instruction in light of general worldwide rubber situation, so far as Peru is concerned, I consider such a handout of psychology [sic], justifying Peru’s fiscal delinquencies and undermining efforts to conduct over-all economic relations in practical manner.

The FEA representative63 feels that in accordance with resolution 21 of Mexico City Conference,64 negotiations for cancellation of flax agreement would be materially helped if rubber and retenone extension agreements are handled by Embassy as correlative part of our responsibility under economic program.

As regards rubber agreement itself, this appears to require that all of $1,200,000 development fund be spent or left in Peru. With only $200,000 spent to date and total needed not likely to exceed $400,000 why should American taxpayers be charged with the balance? Should not also Peruvian Government repay million-odd soles contributed for purchase Maximo Rodriguez land in Madre de Dios, and/or take over any bad loans? Is there not a difference of opinion as to the number of airports to be built, which calls for solution? Doubtless detailed study of contract might raise other points for adjustment. In view of telegram No. 387, Losa does not consider himself authorized to give me his views on these matters.

  1. Not printed; the Department expressed concurrence in the policy of extending the rubber agreements and instructed Embassy officers to effect formal ratification by exchanges of notes (800.6176/4–1945).
  2. Not printed; it quoted the text of a letter sent by the President to 16 departments and agencies regarding centralization of responsibilities for economic activities abroad in an economic counselor or minister in the mission (121.53/3–3045).
  3. Claude Courand, special representative of the Foreign Economic Administration in Lima.
  4. Pan American Union, Final Act of the Inter-American Conference on Problems of War and Peace (Washington, 1945), p. 61.