Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

492. Memorandum of a Conversation, Department of State, Washington, May 26, 1955²

Washington, May 26, 1955

SUBJECT

• Paraguay–Uruguay–Bolivia Relations

PARTICIPANTS

• Paraguayan Ambassador Enciso-Velloso
• Paraguayan First Secretary de Silva
• Assistant Secretary Holland
• OSA—L.D. Watrous

Ambassador Enciso called on Mr. Holland and told the latter that he had been instructed by his Government to inform the Department of Paraguay’s desire for closer economic and cultural relations among Paraguay, Uruguay, and Bolivia. He said he thought the Department might already have heard of a move in this direction, and was told that this was the case.³ The Ambassador then asked Mr. Holland what he thought of the idea. Mr. Holland replied that, naturally, we welcomed greater closeness in the “family.”

(Comment: From either unwillingness or ignorance, Enciso did not go into any details of the proposed entente. Nor did he mention its possible political implication.)

The Ambassador philosophized a bit concerning Paraguay’s geographical position and the freedom of the Paraguayan Government from pressures tending to draw it into the orbits of its larger neighbors.

(Comment: The realities of Paraguayan geography are evident enough. It is not so clear why Enciso felt he had to deny the existence in Paraguay of pro-Argentine and pro-Brazilian factions—unless it was in recognition of the fact that he is known to belong to the former.)

Ambassador Enciso expressed his gratitude for the waterworks loan,⁴ after which he and Mr. Holland exchanged generalized remarks on the Inter-American system and 20th century capitalism.

2. Source: Department of State, Central Files, 720.00/5–2655. Secret. Drafted by Watrous, Officer in Charge of River Plate Affairs.
3. Earlier that day, the Department had received, via air pouch, despatch 295 from Asunción, dated March 25, in which Ambassador Ageton reported that the Paraguayan Foreign Minister, Hipolito Sanchez Quell, was engaged in secret negotiations with Bolivian and Uruguayan diplomatic representatives over closer economic ties. Ageton suggested that the negotiations might, “precipitate a serious shake-up in the Paraguayan Government, since the leftist and pro-Argentine wing of the Colorado Party, particularly Epifanio Mendez Fleitas and Tomás Romero Pereira, may regard this action as anti-Argentine and use it as a pretext for forcing a change in the Cabinet, particularly the dropping of present Foreign Minister Sanchez, who has no strong following, either political or military.” (Ibid., 734.00/3–2555)
4. On September 2, 1954, the Export-Import Bank approved a credit of up to $7.2 million to assist Paraguay in financing the purchase of U.S. services and equipment necessary for the installation of a central water supply system in Asuncion. See Export-Import Bank of Washington, Nineteenth Semiannual Report to Congress for the Period July-December 1954 (Washington, 1955), pp. 13–14.