File No. 422.11G93/956

The Minister in Ecuador ( Hartman) to the Secretary of State

[Telegram]

Department’s June 6, 6 p.m. At the request of the Minister for Foreign Affairs, I called at Foreign Office Saturday. The Minister [Page 412] informed me that he had received telegram from Ecuadoran Minister at Washington, stating that the Secretary of State of the United States had notified him on June 6 that the Government of Ecuador must resume deposits and set aside funds to cover arrear interest Guayaquil & Quito Railway bonds, and if not done, importation of cacao from Ecuador into the United Kingdom [States?] would be prohibited after June 15. He reaffirmed the desire of his Government to pay all his [its] obligations, but stated that present circumstances have prevented doing it.

He attributes decreased revenues to the restrictions of the Allied powers to Ecuadoran commerce and says that the revenues are not sufficient to pay ordinary administrative expenses, notwithstanding annual economies of 5,000,000 sucres, all other expenses having been eliminated except railway construction, which has been reduced to a minimum. He therefore claimed present inability to pay.

I endeavored obtain a definite promise as to when deposits would be resumed and payments on delinquent interest made, same to” be secured by 50 per cent of export duties on all cacao exported in the event of restrictions being removed, but this point was repeatedly evaded. However, afterwards he said that if Ecuador could obtain unrestricted commerce it could for the time being and until the end of the present economic crisis occasioned by the war make the service of the partial payment bonds.

At my suggestion, the substance of his statements and proposals was reduced to written memorandum and delivered to me with his request that the substance be cabled to the Department, and he orally expressed his belief that the matter could be satisfactorily arranged, but said that the time fixed for answer is very short. He says that if the order of prohibition is made, the matter being of such an importance to Ecuador, he will be compelled to give publicity to the entire matter which will result in bitter criticism of the United States by the press and people of Ecuador.

Hartman