822.6372/5

The President of the Export-Import Bank (Pierson) to the Secretary of State

My Dear Mr. Secretary: The Export-Import Bank of Washington has received an application from Commander Paul F. Foster, United States Navy, Retired, for a loan with which to exploit sulphur deposits which are alleged to exist on Albemarle Island—one of the Galápagos group owned by the Republic of Ecuador.

Although Commander Foster’s application contemplates the eventual expenditure of $2,000,000 for the construction of wharves, warehouses, living quarters, supplies, radio facilities, mining machinery and equipment, and land rentals—the immediate request is for funds required to investigate the mineral and other income-producing possibilities of Albemarle Island. It is estimated that this will require the expenditure of approximately $125,000.

We are advised that Commander Foster is in a position to obtain an option to lease the island from Sr. Carlos Gil, an Ecuadoran citizen, who claims title thereto by virtue of long, uninterrupted possession; and that permits to extract existing minerals have been or will be received from the appropriate agency of the Ecuadoran Government.

. . . . . . . . . . . . . .

Before any affirmative action is taken upon Commander Foster’s application, formal assurances should be received from the Ecuadoran Government that the investigation and possible exploitation of mineral [Page 853]and other resources of Albemarle Island are with the knowledge and approval of that government; that Sr. Gil has authority to enter into the proposed lease; and that permission will be given to carry on such activities including the construction of wharves, roads, dwellings, landing fields, radio stations and such other facilities as may be required.

Sincerely yours,

Warren Lee Pierson