822.61334/16a: Telegram
The Secretary of State to the Minister in Ecuador (Hartman)
37. Ecuadorean Minister has approached this Department on behalf of his Government for suggestions as to best means of solving crisis in Ecuadorean cacao. Discussion with Mercantile Bank of [the] Americas and other study has led to following propositions which Department is considering. Your views are desired as to whether propositions meet Ecuadorean situation, and your further suggestions are invited. When proper plan is evolved it will be presented in memorandum to Ecuadorean Minister.
- 1.
- That the Ecuadorean Government allow and induce the Association as well as the local banks to release enough cacao to cover deficit of Mercantile Bank.
- 2.
- That the proceeds from the three sucre export cacao tax be, as far as possible, applied pro rata to the holdings of the Mercantile Bank and the local banks.
- 3.
- That the three sucre tax be also continued beyond October 1921 until such time as the debts of the Association to the Mercantile Bank are paid.
It is the Department’s understanding that local banks have sufficient security already, but that Mercantile Bank has not. Loss on the part of the Mercantile Bank would involve losses and serious disaster to all Ecuadorean interests concerned. Consultation with Consul General at Guayaquil might be appropriate.