Policy in Action

U.S. neglect, real or imagined, of local economic problems was one of the major charges thrown at Vice President Nixon along with stones and spittle on his turbulent good-will swing through Latin America. After Nixon returned home, one of the main points in U.S. reappraisal of Latin American relations was that reasonable U.S. aid should be promptly and cheerfully given. Last week the U.S. cut through red tape and delay to lend Chile $25 million and Colombia $103 million.

Of Colombia's $103 million, $78 million came from the Export-Import Bank, the rest from 13 private banks. Announced purpose of the loan was "to assist in maintaining Colombia's essential imports from the U.S." Colombia is suffering from a 3,000,000-bag coffee surplus. Without the dollars the coffee could bring in, the country can hardly keep up with its current U.S. commercial debts. The choice, outlined in April by Colombian Foreign Affairs Minister Carlos Sanz de Santamaria: either the U.S. could grant a loan or Colombia would have to risk wrecking world coffee prices by dumping its surplus. In effect, the U.S. loan helped save the world coffee market.

Approval of Chile's $25 million came so rapidly that details--including formal signing of the loan agreement--have yet to be ironed out. The Export-Import Bank will probably put up $15 million; the rest will most likely come from Mutual Security Agency coffers. Even the use to which the money will be put is not certain, but basically the loan's function will be to provide a dollar prop for Chile's sagging peso, hard hit by a world slump in copper prices. Last week the peso was so shaky (off from 493 to the dollar to 780 at the free-trade rate since April, 1956) that Chileans were forced to stop all imports from the U.S. by ordering importers, before taking delivery, to deposit 10,000% of the import item's value in an escrow account for 90 days.

This file is automatically generated by a robot program, so reader's discretion is required.