822.5151/296

Memorandum by the Assistant Secretary of State ( Welles ) to the Chief of the Division of Latin American Affairs ( Duggan )

I had an interview with the Minister of Ecuador37 this morning and gave him as an aide-mémoire a copy of the attached draft. I spoke with the Minister at some length indicating my belief that the considerations advanced were of the utmost importance and that it was my urgent and very sincere hope that the Government of Ecuador would find some way to avoid embarking upon this restrictive and, in my judgment, suicidal policy.

The Minister said that he was entirely in accord with the point of view which I maintained and added that he would write by air mail to President Páez personally and that he believed that Páez would see the necessity for reconsidering this policy.

The Minister also stated to me that he had received a cable this morning advising that the Government would send a representative [Page 521] to New York to discuss with the bondholders the question of the Guayaquil-Quito Railway controversy.38 Perhaps you will advise the Council on the latter point.

S[umner] W[elles]
[Annex]

The Department of State to the Ecuadoran Legation

Aide-Mémoire

The Department is interested in the report received that Ecuador has decided to reimpose restrictive control over exchange transactions and imports. While it is not desired to interpose in Ecuador’s efforts to solve its trade and payments problems in its own way, this Government hopes that the measures will be temporary. Ecuador’s decision of last year to abolish exchange restrictions was regarded here as an act of economic statesmanship and one of the outstanding steps in fulfillment of the economic resolution adopted at the Montevideo Conference.39 This action gave much encouragement to forces working for the establishment of liberal commercial policy and the removal of obstructions hampering the recovery of international trade. The reimposition of restrictions on trade and exchange by an important trading country like Ecuador is particularly to be regretted at this time in view of the forthcoming Inter-American Conference in Buenos Aires,40 for the agenda of which various proposals have been submitted recognizing the necessity, in the interest of peace, of lessening economic tension by the reduction of barriers to trade and exchange.

  1. Colón Eloy Alfaro.
  2. See pp. 536 ff.
  3. Resolution V, Economic, Commercial, and Tariff Policy, Report of the Delegates of the United States of America to the Seventh International Conference of American States, Montevideo, Uruguay, December 3–26, 1933 (Washington, Government Printing Office, 1934), p. 196.
  4. See section entitled “Inter-American Conference for the Maintenance of Peace, Held at Buenos Aires, December 1–23, 1936,” pp. 3 ff.