Foreign Relations of the United States Diplomatic Papers, 1938, The American Republics, Volume V

722.2315/1113

Memorandum of Conversation, by the Under Secretary of State (Welles)

[Washington,] January 28, 1938.

The Ambassador of Ecuador¹¹ called to see me this morning. He told me first of all, with regard to the Peruvian-Ecuadorian boundary controversy and with reference to my conversation with him and with Dr. Viteri¹² at lunch earlier in the week, that provided the Government of Peru would suggest a prior arbitration by the World Court which would involve the determination of the validity of the Royal Cedula of 1740 and of the Treaty of 1829 between Ecuador [Colombia?] and Peru,¹³ on the one hand, and of the Royal Cedula of 1802¹⁴ and the decree of the local authorities of the incorporation of the territory in dispute as a part of Peru in 1821, on the other hand, the delegation of Ecuador would accept such prior arbitration. This willingness to accept such prior arbitration would be premised upon the subsequent arbitration, once these points were determined, by the President of the United States, of the question of actual possession insofar as the territory in dispute was concerned.

The decision of the delegation of Ecuador was to be regarded as peculiarly significant in view of their previous unwillingness to consider any prior arbitration on the legal points above referred to.

I reminded the Ambassador of what I had so often said before, namely, that while this Government was acting as host to the two delegations, it did not possess the functions of mediator nor of intermediary and that, while I was prepared and had been prepared to do everything I could to facilitate the successful termination of the negotiations, I did not feel authorized by either of the two Governments involved to suggest specific solutions or methods of procedure. I said, however, that Dr. Tudela¹⁵ had requested me to have a talk with him some days ago and that as soon as I could find the time, which I trusted would be within the next few days, I hoped to go over the field with him. If during this conversation I found that there was a desire on the part of Dr. Tudela to discuss a possible compromise solution with regard to a prior arbitration, I would be happy to indicate that from my conversations with the delegates of Ecuador it seemed to me that a favorable attitude existed for such a solution.

I then discussed at some length with the Ambassador recent decrees and pronouncements of the Government of Ecuador affecting American commercial interests in that country. I likewise handed the Ambassador a memorandum¹⁶ summarizing the more important of these questions. I remarked to the Ambassador that, as he and I had so often said, the first need for Ecuador was to settle her boundary controversy with Peru. Once this settlement was found, a foundation of stability would be secured by the Government of Ecuador which had not existed previously and which would permit the development in a healthy manner of the great natural resources of the Republic. I said that, of course, when that time came, Ecuador would need foreign capital and that it was obvious if they now destroyed confidence on the part of foreign capital in the guarantees which it should legitimately enjoy by the abrogation of contractual obligations in a unilateral manner and by the issuance of decrees regarded as excessively onerous and discriminatory by foreign interests now operating in the Republic, the present Government or any future government would have a far more difficult task in interesting foreign capital in investments in the Republic. The Ambassador said that of course he agreed with me entirely, and that the actions recently taken by his Government had been taken haphazardly without due knowledge of the facts involved and apparently solely in order to cater to nationalistic extremists. I asked him whether he thought that the increasing influence of the Italian military mission in Ecuador had any connection with the recent policy of his Government. He replied that he thought it might well be that it had but that he was inclined to think that the recent actions of his Government had been due more to an attempt to obtain support among the emotional masses than to any considered and concerted general policy.

The Ambassador said that he would at once take these various questions up with the President and with the new Foreign Minister, with whom he was on intimate terms, and that he thought he could obtain a reversal of the present tendency.

S[umner] W[elles]

11. Colón Eloy Alfaro.
12. Homero Viteri Lafronte, Chairman of the Ecuadoran delegation to the Washington negotiations.
13. Treaty of September 29, 1829, between Colombia and Peru, Ricard Aranda, Colección de los Tratados del Peru, vol. iii, p. 185.
14. Aurelio Noboa, Colección de Tratados del Ecuador (Guayaquil, 1901), vol. i, pp. 15–21; Frederic González Suárez, Estudio Histórico sobre la Cédula del 15 de julio de 1802 (Quito, 1913).
15. Francisco Tudela, Chairman of the Peruvian delegation to the Washington negotiations.
16. Post, p. 543.