The Minister in Paraguay (Howard) to the Secretary of State14
Sir: I have the honor to refer to my confidential despatch No. 1253, August 21, 1940,15 particularly points 6, 7 and 8 thereof, and to inform the Department that upon receipt of the Department’s telegram No. 27, August 20, 1940, I called upon President Estigarribia to convey the Department’s request for the postponement of the conversations of our Army and Navy officers with those of Paraguay.
He acceded to the request, saying that the date suggested, September 9, would be entirely satisfactory, but he stated that time was important.
He then went on to state that the fifth column was attempting to spread propaganda in the army. He added that he was aware of these activities and did not fear them but that he did not intend to permit them to continue. He further added that he intended to take energetic measures but that before so doing he desired a complete accord with our Government.
In strict confidence he then told me that as a preliminary measure he would shortly call in the German and Italian ministers and admonish them regarding their activities in Paraguay.
I thanked the President for acceding to the Department’s request and for the information given me and attempted to take my departure. However, he detained me saying that another matter which greatly preoccupied him was the finances of the Government. He stated that they were working on a plan to relieve the situation and desired my opinion thereon. He stated that next week Mr. Pablo Max Insfran, the Minister of Public Works, would call on me to discuss the matter. I replied that I should be glad to render any assistance properly [Page 156] within my power and departed without receiving further information on the matter.
For several days past, unconfirmed rumors have reached me to the effect that the Paraguayan Government intended to present to our Government a plan for further financial assistance.16 I presume this is the matter to which the President had reference. If such should prove to be the case it would seem likely that it is the desire and probably the intention that the matter of hemisphere defense and financial stability of the Paraguayan Government be considered as more or less related.