Memorandum by Mr. Ferdinand Mayer, Division of Latin American Affairs, Department of State

The Port Works Company2 desires to obtain an extension of its concession to construct the port works of Asunción, the time of this [Page 324] concession having elapsed. The Paraguayan Government is adverse to granting such extension. The Company has asked the Department to intercede in its behalf with the Paraguayan Government and the Department instructed the Legation at Asunción to support it if it is a strong and desirable American firm.3

Despatch No. 300, April 9, 1918,4 from the Legation at Asunción reports as follows:

The desire of the Port Works Company to have the question arbitrated, to which the Paraguayan Government is adverse because the only question involved is the existence or non-existence of force majeure which, by virtue of Article 3 of the company’s concession is to be determined by the executive power.
The concession forbids, with certain exceptions the operation of any port for importation or exportation within a distance of thirty kilometers from the port of Asunción.
The operation of this article of the concession would be very disadvantageous to the Central Products Company and the Swift Company Frigorificos, involving as it would a charge by the company against the Frigorificos for service never received by them.
The Paraguayan Government appears genuinely interested in the American Frigorificos, and their existence, along with other manufacturing companies, is of first importance to the economic development of Paraguay. Also that Government feels that the Port Works concession is too comprehensive.
The Paraguayan Government does not feel that the Port Works Company has acted frankly or in good faith in this matter.
In the premises the Legation at Asunción does not believe that the Department should give the company any further assistance, suggesting, however, that if the efforts of the company to have their concession extended is unsuccessful, the refimding of the $20,000 gold guarantee might be arranged between the Paraguayan Government and the Port Company.

This report from the Legation is well thought out and well expressed; briefly, it appears to submit that the present and future advantages of the spread of American trade throughout Paraguay would be greatly hampered by the extension of the Port Works concession and that therefore such extension is not desirable.

This division concurs in the sentiments above noted and recommends that the Department tactfully advise the Port Works Company that this Government does not feel able to proceed further in assisting the Port Works Company in obtaining an extension of their concession.

F[erdinand] M[ayer]
  1. i.e., the Construction and Engineering Finance Co.
  2. Instruction no. 79, Jan. 11, 1918; not printed.
  3. Not printed.