822.51/877: Telegram
The Minister in Ecuador (Long) to the Secretary of State
[Received June 1—12:49 a.m.]
82. I have just received a call from the President who says that the labor unions have been well organized and are making a united front demand for a raise in wages due to the depreciation of the sucre from April 24 to date from 15 to 19 to the dollar.
If Dr. Cordova does nothing he fears that an attempt will be made to overthrow the Government, backed in part by laborers who really seek to reduce the cost of living, but workers are directed by agitators.
The President left me a memorandum in Spanish a translation of which reads as follows.
“Ecuador urgently needs at present a million dollars in order to arrange its internal economy. Although the March cacao crop was a failure it appears certain that this will be compensated in December. It is necessary to pay commercial creditors of the United States for merchandise orders placed without considering the loss of that March crop.
The Government of Ecuador does not desire to issue any decree artificially regulating the situation but prefers that payments be made in [Page 875] the normal manner abroad without however being a drain on the gold reserves of the central bank; for which reason it desires this loan whether it be given to the Government or to the central bank with the guarantee of the Government, which would pay to the central bank all of its receipts of foreign exchange originating from the consular invoice fees deducting only that part necessary for the payment of salaries of the diplomatic personnel, which is small. President Cordova has personally visited the Legation to make this proposal since he fears that the exaggerated rise of the dollar may bring on political difficulty which would be hard to control. President Cordova believes that many people have purchased dollars in order to speculate and believes that the announcement that the Export-Import Bank is studying the possibility of making available this million dollars and that the notice be published in the press will oblige the actual holders of dollars in the country to offer them for sale normalizing the situation probably without the necessity of having to use all of the loan.”
The Minister for Foreign Affairs told me that the President was under great pressure to declare a moratorium or to take other radical steps but feeling present emergency will be relieved if the next cacao crop is good as indicated; also consular tax produces around $700,000 annually, that it would be better to seek a loan. If there is any probability thereof announcement would gratify President and might help exchange. Actual funds might be made available after Fetter’s61 arrival assuming that he will fly down about June 14.
- Frank W. Fetter, detailed as adviser to the Central Bank of Ecuador.↩