Placing myself at your disposal for any clarification regarding the
subject in question, I take pleasure in expressing to you my
distinguished consideration.
[Enclosure—Translation]
The Paraguayan Legation
to the Department of State
Memorandum
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.
[Page 766]
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) |
|
$572,891.15 |
|
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.
Washington,
November 24,
1939.
