833.5151/363
The Consul General at Montevideo (Reed) to the Secretary of State
[Received December 14.]
Sir: I have the honor to refer to my confidential despatch No. 708 of November 1, 1935, entitled “Reporting Further Interview with Import Quota and Exchange Control Authorities”,28 in which it was mentioned that according to figures furnished by the Bank of the Republic for the first nine months of 1935, only 53% of the exchange created by American purchases of Uruguayan goods had been made available at controlled or official rates for imports from the United States or the service of American loans, and that this matter was discussed by the undersigned with officials of the Exchange Control Section [Page 972] of the Bank of the Republic, to whom it was also pointed out that, according to the American viewpoint, debt service should be made from the general fund of exchange created by Uruguay’s exports to all countries, rather than deducted from that produced by American purchases of Uruguayan goods.
No definite reply having been obtained from the Bank officials, investigations were made by a member of this Consulate General to ascertain the situation, and it was learned that the Bank officials preferred not to discuss these matters with diplomatic officers, considering that representation should be made through the Ministry of Foreign Affairs rather than directly to the Bank.
On receipt of this information, a meeting of the Board of Directors of the new American Chamber of Commerce was called at my request, at which the situation was explained by the undersigned, and the desirability of representations by the Chamber was pointed out. The Directors decided to request an immediate interview with the appropriate Bank officials and, with the assistance of the undersigned, prepared a communication to the Bank setting forth the desirability of an increased quota for American goods, in view of the recent increases in Uruguayan exports to the United States.
A delegation from the Chamber of Commerce has now discussed the matter with the officials of the Bank of the Republic and report that there is apparently a possibility of an increase in the quota for American goods, as well as in the list of articles which might be imported from the United States with the benefit of exchange at controlled rates. The Bank officials suggested that the Chamber recommend the articles which it was desired should be included in this list, and the Chamber is therefore circularizing its members in order to ascertain what articles not now receiving controlled exchange might be recommended for that privilege.
The Bank officials stated that the figure previously given out for the quantity of exchange allotted for debt service and imports of American goods was wrong, and that the figure in question was for imports alone. The amount transferred to the United States for debt service, according to their statement, amounted to another 25,000,000 French francs, which brought the total exchange allotted to American interests up to 100% of that created by American purchases of Uruguayan goods. (This figure is confirmed by private investigations subsequently made by this Consulate General, which also show that, adding to these figures the amounts remitted for service of the so-called “amortizable obligations” or “five-year conversion bonds”, the amount of exchange allotted during the first nine months of this [Page 973] year is about 75,000,000 French francs, as compared with under 50,000,000 French francs received for payment of Uruguayan exports to the United States.)
The President of the Chamber, in the interview with the Bank officials, again set forth the American viewpoint with respect to debt service, but was informed that, although theoretically the Bank officials agreed with him, in practice it was necessary for such service to be deducted from the exports to the United States. One of the Bank officials explained that the British Chamber of Commerce had been for the past year sustaining the same point of view as was held by American interests, but that the British had been obliged to give up their efforts on this point. In view of the strong British commercial position in Uruguay, the United States is in an even less favorable situation than is Great Britain to obtain commercial concessions, so that the Bank official emphasized that it was useless to make further representations on this point.
Respectfully yours,
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