The Minister in Ecuador (Bading) to the Secretary of State
[Received May 7—7:30 p.m.]
15. Referring to the Department’s telegram of May 4, 5 p.m., second paragraph.8 It is believed that the delay has been due to unsettled political conditions here and to the Ecuadorean Government’s awaiting the outcome of negotiations between the association and Mr. Stabler9 in Guayaquil. The Legation has just learned that an agreement has been reached, Mr. Stabler reporting by telegraph May 1st that an agreement not yet signed on that date provides that Association of Agriculturists cedes to the Mercantile Bank 1,666,085 sucres being balance 66 percent tax since law of 1921 and sums collected prior to this last month and free titles to association real estate valued today at 350,000 sucres. Association deposits Banco Comercial 1,271,566 sucres being balance 34 percent tax since law of ‘21 same not to be withdrawn until authorized by Congress which association obligates itself to try to obtain next session (in August). Association remains in existence with reduced expenses until the end of the year so as to collect legally. It is estimated that tax should produce 1,600,000 sucres including April deposits, so bank should receive a total of from 4,800,000 to 5,000,000 sucres, approximately one million dollars.
Stabler has requested that the Department be informed of the necessity of action by Congress in order that the American Government may point out to the Ecuadorean Government the advisability of early passage of the act by Congress as the association cannot use 34 percent, amounting to 1,815,566 sucres or over one-third of the total amount involved without such authority.
Since the bank and the association apparently have reached this final settlement it is presumed that the Department will desire to await the reply of the Ecuadorean Government to the Department’s last note on the subject before taking any further action. I shall again urge the Ecuadorean Minister for Foreign Affairs to send a prompt reply.