823.51/2–2547

Memorandum of Telephone Conversation, by Mr. Alexander Schnee of the Division of North and West Coast Affairs

Participants: Ambassador Cooper, Lima, Peru
Mr. Wells—NWC
Mr. Schnee—NWC

Ambassador Cooper called at 5:45 to report that he had been informed by the Finance Minister that the maximum terms which Peru could offer in an effort to reach a debt settlement would provide for annuities totalling 3%. Peru would be willing to maintain amortization at thereby leaving 2–½% for interest. The Finance Minister said that, although he personally might be willing to increase the [Page 1004] annuities to 3–½% in order to meet the Council’s offer of 3% interest and ½% amortization, he was convinced that the Senate would not approve a debt settlement providing for annuities in excess of 3%. On the basis of personal conversations with some of the leading Senators, the Ambassador agrees with the Finance Minister that the extra half per cent could not be forced through the Senate.

The Ambassador commented to the effect that he thought the Council would make a mistake if it rejected this latest offer. Although he has not supported any proposal other than that advocated by the Council, after a long period of negotiations he is now convinced that the current Peruvian proposal should be accepted.

With reference to the Department’s Telegram 90 of February 24, the Ambassador has been assured by the Finance Minister that the President fully understands that any settlement of the external dollar debt does not carry any assurance whatsoever that a loan or credit will necessarily follow. While he does not consider that it will help the negotiations, the Ambassador will, as instructed, see the President tomorrow (February 26) and inform him of the substance of the telegram.

Mr. Wells said he thought the Ambassador had handled this matter very well and that it now appears that there is nothing more we could do at this time.