611.2231/395: Telegram

The Minister in Ecuador (Long) to the Secretary of State

41. Department’s telegram No. 25, May 24, 7 p.m. If Department desires now to modify trade agreement the Ministry of Foreign Affairs [Page 618] orally suggests fixing as the annual quota for the United States of 40 million sucres. However, it is now proposed to modify the regulations governing import control, establishing instead of import permits a deposit of 30% of the value of merchandise ordered. He added that if the latter is approved our commerce probably would benefit since most United States exports consist of necessities.

The Government of Ecuador profoundly regrets having to suggest this reduction, but if the 30% method is not approved, the same principle as now suggested in our case will be applied to all countries with which Ecuador has commercial relations.

The Foreign Minister regards the present as a transitory situation likely to exist until exports can be increased which should result if Ecuador obtains a loan.

The Central Bank this afternoon approved 30% plan described above, but it must receive the approval of the Council of State and there is much opposition on the part of Chambers of Commerce. Notwithstanding the opposition the Minister for Foreign Affairs hopes that a decision as to the changes indicated will be made soon, but if matter is not settled prior to June 1 he will give me a note confirming the above mentioned quota for the United States.

Tobar at first proposed 31 million (see despatch No. 459, April 2731) but after a long argument he reluctantly raised figure to 40 million. He repeated the hope that it would not be necessary to make public the modification arrangement for reasons given in my letter of May 2232 to Mr. Duggan.33

Long
  1. Not printed.
  2. Not found in Department files.
  3. Laurence Duggan, Chief of the Division of the American Republics.