The Paraguayan Minister (Fernandez) to the Under Secretary of State (Welles)

Dear Sir: I take pleasure in sending you, herewith, the memorandum, which you had the goodness to request of me, relative to the increase of the credit to the Bank of the Republic of Paraguay.

Placing myself at your disposal for any clarification regarding the subject in question, I take pleasure in expressing to you my distinguished consideration.

Horacio A. Fernández

The Paraguayan Legation to the Department of State


At the Consultative Meeting held at Panama by the Foreign Ministers of the American Republics,10 on October 3, the Resolution was approved declaring that “it is desirable and necessary, now more than ever, in view of present circumstances, that close and sincere cooperation be established among the American Republics in order to protect their economic and financial structure, maintain their fiscal equilibrium, assure the stability of their currencies, promote and expand their industries, intensify their agriculture and develop their commerce.”11

The United States, in carrying out its policy of financial cooperation with the American Republics, anticipated the resolutions passed at the Conference of Panama.

Paraguay is one of the countries which has received the financial collaboration of the United States Government, through the granting of special credits intended for the execution of public works and to meet the needs of the trade between the two countries.

The Bank of the Republic of Paraguay has at its disposal a credit extended by the Export-Import Bank of Washington amounting to $500,000, intended for the purpose of stimulating the expansion of Paraguayan foreign commerce and economic relations with the United States, and to meet the commercial obligations with the said country and, likewise, to regulate the fluctuations of the rate of exchange.

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The granting of this loan to the Bank of the Republic of Paraguay was concluded before European events had reached a crisis, and it can be affirmed, that in determining the amount thereof the dislocations created by the European war in the régime of international commerce could not be taken into account.

The European war has caused great disturbances in commercial relations. International trade has been restricted and some traditional markets of Paraguay have been closed, not only to importation but to exportation.

This diversion of the trade of Paraguay will be intensified until the United States will become the most important commercial center of acquisition, a circumstance which must be taken into account in connection with the Bank of the Republic, an official institution charged with facilitating dollar exchange to pay for imports.

Previous permits for imports from the United States give the following figures since the date on which the Comptroller of Imports was established:

June $63,445.55
July $74,701.72
August $138,946.74
September $141,818.49
October $153,978.65 (until October 17)

A noticeable increase is observed in the volume of imports from the United States since just before the war.

This month the amount of the permits will be much larger and the proportion will increase if the European war lasts a long time.

In view of the foregoing circumstances, and as a measure of foresight, it would be necessary for the credit of $500,000 extended to the Bank of the Republic, and which will be used to meet the payments for the purchases made in the United States and guarantee the stability of the currency indispensable for the security of engagements contracted in the United States, to be increased in the amount of $500,000 more, under the same conditions as the previous one.

The Bank of the Republic has scarcely begun to make use of the said credit and will soon have to do so on a larger scale in order to facilitate to Paraguayan commerce its purchases in the United States. In former years, without the canalization of the commerce of Paraguay toward the United States having occurred, it reached an average amount of $650,000.

  1. See pp. 15 ff.
  2. Report of the Delegate of the United States of America to the Meeting of the Foreign Ministers of the American Republics Held at Panamá, September 23–October 3, 1989 (Washington, Government Printing Office, 1940), p. 50.