823.51/2–447: Telegram

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

secret

110. Foreign Minister8 noon today, after advising that Peru had failed through Chavez of Peruvian Embassy at Washington to secure Export-Import Bank loan, again appealed to me to help Peru get a loan before Peru did anything about settling old debt. Foreign Minister stated Bustamante Govt might fall unless loan was immediately forthcoming from the US. He likened Peru to a drowning man asking for immediate help. I pointed out to the Foreign Minister that United States had high regard for Bustamante Govt and that on Dec 11, 1946, I had informed President Bustamante that no loan would be forthcoming until satisfactory settlement of debt (Embtel 1251 Dec 129) and that apparently no effort had been made to arrange satisfactory settlement from that time to date and that if Peru was in earnest [Page 1000] about settling the debt a measure might be passed through the Peruvian Senate with great expedition provided the President took the leadership in sponsoring satisfactory debt settlement. Foreign Minister did not deny this and stated that he hoped I would see the Minister of Finance Echecopar. When Minister of Finance was contacted this afternoon, he stated that he was at this time not ready to take up discussion of debt settlement on account of having to advise with various sources but that in possibly a few days time he would have a proposition formulated.

Cooper