822.6341 South American Development Co./111

Memorandum of Telephone Conversation, by the Chief of the Division of the American Republics (Duggan)

I informed Mr. Burden45 that the Under Secretary had gone over the situation confronting the South American Development Company in Ecuador. The Under Secretary had requested me to inform him that while he deeply appreciated the difficult situation now confronting the Company there appeared to be little more that the Department could do at this stage, particularly in view of the so-called Calvo clause46 in the Company’s contract. I stated that the Department and the Legation at Quito of course would continue to follow the situation closely and at any time would be prepared to reconsider its position in the light of new conditions.

Mr. Burden stated that the Board of Directors was meeting at noon today to consider what further steps the Company should take. He stated that the Company’s representative in Ecuador had cabled that the President had declined to agree to the proffered loan of the Anglo-Ecuadoran Oil Company of one million sucres on the ground that it was entirely inadequate. Mr. Burden further stated that in [Page 549] view of the turn of developments he did not believe that the Board of Directors of the Company would for a moment consider loaning the Government the $600,000 requested.

  1. William A. M. Burden, of the South American Development Co.
  2. See Hackworth, Digest of International Law, vol. v, p. 635.