422.11G93/1726
The Minister in Ecuador ( Gonzalez ) to the Secretary of State
[Received August 14.]
Sir: I have the honor to refer to the Department’s telegram No. 28 of August 1, 1 p.m., 1936, informing me of the substance of a further conversation held with the Ecuadorean Minister in Washington concerning The G. & Q. Railway. It is noted that the Ecuadorean Minister was informed that if the Council were in a position to recommend to the bondholders the acceptance of a settlement, it would be in the interests of the Ecuadorean Government, whereas were the Council confronted by a fait accompli as concerns important particulars, it might then find itself unable to recommend acceptance.
In view of the fact that the Minister of Public Works had informed me that he would withhold action in the matter of continuing the suit against the Railway pending confirmation from me that the Department had indicated to the Ecuadorean Minister that it perceived no objection thereto, as reported in my telegram No. 38 of July 31, 11 a.m., 1936, and that the Ecuadorean Minister had not yet reported to his Government the substance of his further conversations with the Department when an endeavor was made to correct this impression, I deemed it necessary to bring this information to the attention of the Minister of Public Works yesterday. I prepared the attached memorandum83 which I permitted him to read, but I left no copy of it with him. The Department will observe that I simply added that a situation might develop as a result of the continuation of the suit which would be incompatible with the friendly consultation with the Council looking to an amicable settlement of this long-standing problem. My primary purpose was to point out that if such a situation arose it would nullify the Government’s desire to seek an amicable settlement through consultation with the Council. I made no request of him that his Government should desist in the suit.
The Minister of Public Works told me that he would take up the matter with the President. He advised me today that he had not had an opportunity to go into the matter thoroughly with the President, but he intimated that the latter was convinced from reports received from the Ecuadorean Minister in Washington and Mr. Sherwell of the Manufacturers Trust Company that the Department had no serious objection to the prosecution of the suit and, furthermore, that [Page 550] bankruptcy proceedings were the only possible solution of the problem. He agreed to inform me as soon as he had more definite information on the subject.
Respectfully yours,
- Not printed.↩