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

No. 291

Sir: The Department has received a letter dated September 23, 1921, from the Brown Shoe Company, St. Louis, Missouri, (a copy of which is transmitted herewith1) wherein the Company states that its dollar drafts are being repudiated under the recent ruling of the Government of Ecuador, fixing the rate of exchange for sucres, which retroactively affects contracts already entered into and which provide for specific arrangements.

Although the action of the Ecuadorean Government in fixing the rate of exchange, already has been the subject of despatches from the American Legation in Quito and the Consul General in Guayaquil, it has not appeared to the Department until recently that it might be a matter in which this Government should intervene. But, in view of the statements of the Brown Shoe Company, and other reports that have reached the Department as to injuries to American interests that, it is claimed, have resulted from the action of the Ecuadorean Government, it now seems that the situation may be one that should be brought to the attention of that Government.

You are instructed to investigate the matter and if, as alleged, the action of the Ecuadorean Government has resulted in preventing American citizens from exercising their rights to obtain compliance with contracts in force previous to that action by compelling them to accept sucres at less than the market price in discharge of dollar obligations, you will make appropriate representations to the Government of Ecuador, urging that the regulation of exchange, if continued, be carried out in such manner that the rights of Americans under said contracts will not be affected.

I am [etc.]

For the Secretary of State:
F. M. Dearing
  1. Not printed.