833.5151/170
The Consul General at Montevideo ( Reed ) to the Secretary of State
[Received June 14.]
Sir: I have the honor to refer to my strictly confidential despatch No. 495 of May 16, 1934,11 entitled “Allotment of Exchange to American Interests”, and in continuation thereof to give the figures for the first four months of 1934, as well as the totals of the exports from Uruguay to the United States for the same period for comparison therewith.
In the despatch above referred to, it was stated that there was some doubt as to how the new basic figure for exchange allotments to the United States (which was apparently due as a result of increased Uruguayan exports to the United States) should be obtained. It has been learned from an official of the Exchange Control Commission that the formula used by the Commission is still the original one, according to which the exchange to be allotted to American interests should be 231% of the value of the Uruguayan exports to the United States during any given period. In other words, the allotting of exchange is to vary immediately with American purchases, and to be equalized as promptly as possible, instead of in a subsequent period. This policy has not been followed by the Control Commission, however, either for the year 1933 or for the first four months of 1934. It is believed that the Commission’s failure to do so is the reason for the non-publication of figures for 1933. The Commerce Committee of the American Association of Uruguay, acting on this assumption, has decided to request from the Control Commission a statement of the exchange allotted to American interests during the second half of 1933 and the basis thereof (a similar statement for the first six months of 1933 having been received). As mentioned in my previous despatch, the total amount of exchange allotted to American interests in 1933 was 10,441,019 pesos, while 231% of the value of Uruguayan exports to the United States in 1933 equals 12,820,500 pesos.
For the first four months of 1934, the total amount of exchange allotted to American interests was 2,618,804 pesos, which was converted to dollars 2,044,263. The inadequacy of this allotment is apparent when it is compared with the value of the exports to the United [Page 649] States during the same period, which, according to Uruguayan official statistics were valued at 2,628,750 pesos, 231% of which would be 6,072,313 pesos, which is apparently the amount of exchange that should have been allotted.
The exchange allotted month by month, in pesos, the rate used, and the total in dollars, is given herewith:
[Here follows statistical table, not printed.]
On April 9, 1934, the Exchange Control Commission took over the distribution of the so-called “compensated exchange”, fixing its price at 40% above the cost to the Uruguayan buyer of official exchange. The figures obtained from the Control Commission now include the amount of “compensated” exchange allotted, in addition to that granted at the official rate. As this Consulate General has learned that the figures for the total exchange granted for American interests in the past also included “compensated” exchange, the totals for the months of January, February and March have been broken down into official and “compensated” exchange in order that they may be compared with the figures for April and with future totals. It is noted that a very important part, nearly half, of the exchange distributed to American interests for general imports (not including petroleum products) was in the form of compensated exchange, which explains the complaints of importers of American goods that they were individually receiving very little official exchange. From these figures, there was only exchange amounting to 501,230 pesos granted for American goods, (except petroleum products) during the first four months of 1934. The reason for the separate classification of petroleum products has been explained in previous despatches from the Legation and this Consulate General, and is due to the fact that the Control Commission charges such products, not to the quota of the country of origin, but according to the nationality of the handling company. Information obtained in the past by this Consulate General has indicated that much of these commodities imported into Uruguay by American-owned companies were not of American origin, and the Commerce Committee has not, as yet, accepted this procedure, tending to favor the practice of allotting exchange according to the country of origin of the merchandise. It has not formally protested to the Exchange Control Commission, however, deeming it desirable to await some statement of policy from the State Department which might serve as guidance. The detailed figures of exchange distributed to American interests during the first four months of 1934 were as follows:
[Here follows statistical table, not printed.]
Respectfully yours,
- Not printed.↩