File No. 422.11G93/971

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

[Telegram]

Department’s August 9, 6 p.m. received Saturday. At request of the Minister for Foreign Affairs I called upon him Sunday forenoon. After extended interview on the subject of cacao importations from Ecuador to United States and resumption of deposits for service of Guayaquil & Quito Railway bonds, I suggested that he furnish memorandum definitely stating his Government’s attitude. He agreed to do so and yesterday afternoon I received his unofficial memorandum of which the following is substance.

Ecuadoran Minister for Foreign Affairs has not received information as to the terms of agreement reached in Washington relating to payments to bondholders and daily deposits. In a private and unofficial way the Minister states that on August 8th Minister of Hacienda ordered setting aside funds for daily deposits. Since such being the case, daily deposits will not probably exceed 1,000 sucres per diem and will not be sufficient for Colombia [Ecuador?] to pay one coupon. It is suggested [Page 418] that 75 per cent of the proceeds of the sale of 250,000 quintals cacao now in Guayaquil owned by auxiliary cacao association can, by agreement between the Ecuadoran Government and the association, be applied to the payment of one coupon.

This will enable Ecuador to draw against the 25 per cent surplus and assist in increasing imports and hence daily deposits. Yesterday afternoon newspapers published cable from New York containing information of the suspension of cacao importation. This news has produced much bitter comment.

The Minister for Foreign Affairs called at the Legation last night and inquired as to the truth of the cable published regarding suspension of cacao importation and instructions to consuls. I could not verify the statement because of confidential character of Department’s telegram, and hence suggested that he inquire of Consul General at Guayaquil through governor.

Evidently he is concerned regarding possible action to-day, as he has been instructed to appear and answer questions affecting international relations. Will telegraph further developments.

Hartman