The Minister in Ecuador (Hartman) to the Secretary of State
[Received December 7.]
Sir: Referring to the Department’s instruction No. 291, of October 19, 1921, with which there was transmitted a copy of a letter from the Brown Shoe Co., of St. Louis, Missouri, dated September 23, 1921, “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”, I have the honor to submit the following preliminary report.
Upon reading said instruction, it appeared to me advisable to have an informal interview on the subject with the Minister for Foreign Affairs, with a view to ascertaining his views in the matter.
Accordingly, I called upon him at the Foreign Office on Monday, November 14th, and brought the matter to his attention informally.
From what he said during the interview, it was apparent to me that he is in accord with the claim of Ecuadorean debtors that they have the right to compel acceptance by their creditors in the United States of sucres at the rate of 2.60 in payment of their dollar drafts, even though the market rate of exchange is much greater, and even though the contract creating the indebtedness was made before the passage of the law authorizing the fixing of an official rate of exchange.
In answer to an inquiry from me as to whether he knew of any case, involving the question, having been tried and decided by any Ecuadorean Court, he replied that he did not.
In view of his attitude I prepared and delivered my note No. 445, of November 16, 1921, of which the enclosed is a copy. Upon receipt of the Minister’s answer, I will make further report to the Department.
I have [etc.]