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

No. 761

Sir: Referring to my despatch No. 752, of November 17, 1921, respecting the claim of Ecuadorian debtors that they have the right to compel acceptance by their creditors in the United States of sucres at the official rate of 2.60 in payment of 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, I have the honor to make the following additional report:

On yesterday afternoon I received note No. 50, of November 30th. from the Minister for Foreign Affairs (copies and translation enclosed) in answer to my note No. 445, of November 16, 1921.

In this connection, I have to advise the Department that, under date November 24, 1921, a new decree fixing the official rate of exchange at 3.60 was signed by the President. Triplicate copies of this decree, with translation, are herewith enclosed.3

I have [etc.]

Chas. S. Hartman
[Page 876]

The Ecuadoran Minister for Foreign Affairs ( Ponce ) to the American Minister ( Hartman )

No. 50

Mr. Minister: I have before me the esteemed note of Your Excellency, No. 445, of the 16th instant, received the 17th.

In the conversation which I had with Your Excellency on the 14th, I stated to Your Excellency: (a) That the Government of Ecuador, by virtue of a Law, was obligated to fix the rate of exchange: (b) that, in fulfilment of this duty, the Government had fixed it, in an Executive Decree: (c) that, as a general rule, payments in Ecuador must conform to this Decree; but that it pertains to the Judicial Power to judge and decide the controversies which arise in particular cases, taking into consideration the special circumstances of each case, such as the conditions of the contract as regards the place of payment, the currency in which the latter is to be made, etc., and taking into consideration the rules of Private International Law for the determination of the law which in each case should be applied, when the controversy is relative to contracts celebrated in one country for execution in another; and (d) that the rate of exchange fixed in the Executive Decree is applicable, in my opinion, to payments posterior to its date, even when they result from debts contracted previously. I added that the President of the Republic was occupied in studying all the data necessary to fix, in a new Decree, the maximum rate of exchange, in a manner corresponding to the present circumstances of our international commerce.

I now take pleasure in communicating to Your Excellency that on the 24th of this month the Executive Decree was issued, and was promulgated on the following day in No. 360 of the Registro Oficial, copy of which I am transmitting to Your Excellency.5

I renew [etc.]

N. Clemente Ponce
  1. Not printed.
  2. Not printed.