822.796/147: Telegram

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

54. Your 77, May 29, 10 a.m. Please telegraph directly to the Department the suggestions Campbell is making to his principals. Please telegraph also your opinion, without consulting Ecuadoran officials, as to the reasons for Sedta offering control to the Ecuadoran Government on its own initiative.

With respect to the probable cost of Sedta, it has been the impression in the Department that Sedta airplanes are not owned by it but are used on a lease basis, so that the airplanes need not constitute a part of any transaction whereby the Government would receive majority control of Sedta. It is our information that Sedta has very little property in Ecuador and that the purchase price would be largely a nominal compensation for the value of the franchise. For the Department’s assistance in appraising this situation, please report your estimate, without consulting any Ecuadoran officials, of the value of the physical investment of Sedta and the extent of personnel to which there might be legal obligations.

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With regard to the German personnel of Sedta once the Government was the controlling owner of the company, it could then discharge such employees as it might see fit.