810.20 Defense/1286a: Telegram

The Secretary of State to the Minister in Paraguay (Frost)

76. The Minister of Paraguay in Washington believes that action on the basic agreement covering the transfer of war matériel under the provisions of the Lend Lease act would be greatly expedited were the President of Paraguay clearly to state his wishes to the Minister of Foreign Affairs. The views which you were instructed to present in the Department’s telegram no. 75 of August 13, 6 p.m. have been approved by the Minister of Paraguay here who has expressed the intention to follow a similar line in his direct and personal communications to the President.

The Paraguayan Minister also suggested that you inform the President that the payment of $300,000, by which the Paraguayan Government would discharge completely its obligations to pay for the matériel covered by the basic agreement could be discharged either in cash or in articles of defense at the choice of the Paraguayan Government. He was informed that the Department has made careful studies which have revealed the impracticability of receiving payments in commodities and in view of this the payments in cash, stipulated in the basic agreement have been reduced to such amounts as, in the opinion of the economic experts of this Government, would occasion no difficulty to Paraguay. If the President or Paraguayan officials should refer to this matter, you will please express to them this Government’s views as set forth above.