633.116/114
The Minister in Uruguay (Dawson) to
the Secretary of State
No. 248
Montevideo, June 30, 1938.
[Received July
11.]
Sir: I have the honor to refer to the
Department’s instruction No. 10 of March 23, 1938 (no file number)
enclosing a draft memorandum in which it was suggested that the
Uruguayan Government make known to our Government certain information
regarding foreign exchange transactions. Reference is made also to my
despatch No. 157 of May 13, 1938, transmitting a reply received from the
Foreign Office and suggesting that in view of the unsatisfactory nature
of this reply it would be advisable for me to request the authorization
of the Minister of Foreign Affairs to pursue the matter further with the
officials of the Bank of the Republic.
This course of action having been approved by the Department in its
telegram No. 21 of June 6, 1938, I saw the Acting Minister of Foreign
Affairs, Sr. Ubaldo Ramón Guerra, on June 9 and, after pointing out
wherein the reply of the Bank of the Republic to the Legation’s request
for information was unsatisfactory, inquired if he would have any
objection to my taking up the matter direct with the Bank. As I had
anticipated, the Minister not only said that he would be very glad to
have me do this but he even called up the President [Page 952] of the Bank, Sr. Jorge West, and
arranged himself for my interview with that official.
I saw Sr. West on the morning of June 10 and had a very cordial
conversation with him. I pointed out that, while the Bank had very
courteously furnished information at various times, the Legation did not
have all the data desired by the Department. I told him that it was not
my intention to question the accuracy of the Bank’s figures but to get
as complete, exact and recent information as possible for the
Department’s assistance in studying our trade relations with Uruguay. I
left with Sr. West a statement in English and Spanish covering the data
desired by the Department, and he said that he would be happy to have
the available figures sent me as soon as possible.
The Bank’s reply was received today in the form of a memorandum
accompanied by tables.66 I enclose copies of the tables and a copy and
translation of the memorandum. These copies and the translation are
being prepared hastily in order to catch the next outgoing air pouch,
and the Legation and Consulate General have not yet had time to make a
careful study of the figures furnished by the Bank. This study will be
made during the next few days and any further comments which may prove
necessary or pertinent will be transmitted to the Department in due
course.
Respectfully yours,
[Enclosure—Translation]
The Bank of the Republic of
Uruguay to the American
Legation
Memorandum
There are attached the following tables in compliance with the
request contained in No. 1 (i. e. Point 1 of the Department’s
memorandum):
- (a)
- Exchange purchased on account of exports, according to
countries, including both official and controlled exchange,
since up to December 4, 1937 operations were in official
exchange. These tables cover the years 1936, 1937 and the
months of January to May of 1938, for those exports the
destination of which has been confirmed.
- (b)
- Exchange purchased during 1937 and the months of January
to May 1938 for accounts other than exports. It has not been
possible to prepare a table covering 1936 because the
pertinent data for that period are not complete.
- (c)
- Exchange sold during the years 1936, 1937 and the months
from January to May of 1938. This table includes imports and
other accounts, such as debentures of foreign companies
established in Uruguay, financial services of the same, and
other transfers of a [Page 953] commercial character. In other columns of this same table
are set forth financial services according to countries,
including the obligations of the State as a result of its
foreign debt, the First and Second Series Bonds of the Caja
Autónoma de Amortization, and Treasury notes. All the
figures of this table include controlled and official
exchange.
- It is not possible to give the details of sales of
exchange in the free market because these operations are not
controlled by the Bank.
We shall now give a brief statement of the source from which data
furnished are obtained and the requirements which must be met in
connection with export and import operations:
Exports.
The control of these operations is entrusted to the Control Office
for Exports, established by decree of April 4, 1935. Its duties
consist in issuing permits for shipments abroad. For this purpose it
demands a bank certificate to the effect that the corresponding
exchange has been negotiated in accordance with the provisions
governing the class of merchandise exported, and it ascertains at
the same time whether the prices at which exchange has been sold
agree with the true prices. For this purpose it has technical
specialists who in addition to checking the merchandise, carry out
inspections to satisfy themselves regarding all details of the
transaction.
The bank certificate above referred to must bear evidence of the
authorization of the Bank of the Republic, which, before granting
it, verifies whether the export shipment has been duly declared in
the tables of “exchange purchased.”
These tables after being carefully examined as respects all details,
go to the Section for Exchange Control of the Bank of the Republic,
which is charged with keeping account of the exports and imports by
countries. The said office demands from exporters written
confirmation of the destination of the merchandise and when this has
been registered it credits to the respective country the amount of
exchange as respects each export shipment.
Imports.
The Bank of the Republic is charged with determining exchange quotas
for the different countries, and in certain cases by
classifications, the distribution to individuals being carried out
by the Direction of Services of Import Control and Individual
Distribution of Exchange (“Dirección de Servicios de Control de
Importatión y Distributión Individual de Divisas”—referred to below
as DISCIDID).
The Bank of the Republic determines quotas according to the volume of
exports to each country and in the proportion corresponding
thereto.
Within the limits of the quota established, the DISCIDID effects the
individual distribution, keeping a list in which there are recorded
[Page 954] the number of the
import application, name of the applicant, kind of merchandise, and
amount.
The Bank of the Republic then checks the sales of controlled exchange
made by (commercial) banks for imports against the lists prepared by
the DISCIDID and, being found to be correct, it debits the different
countries with the amount of exchange sales.
If when the shipping documents are presented it should be found that
the origin of the merchandise is not that for which the required
advance import application was granted, steps are taken to make the
necessary rectification.
According to the note found at the foot of Table C (showing exchange
sold) imports with free or uncontrolled exchange have not been taken
into account, which imports are rather considerable in amount and
under which regime nearly all imports from the United States during
the current year have been made.
