833.6463/50: Telegram

The Chargé in Uruguay (Chapin) to the Secretary of State

190. Department’s 77, May 10. Legation’s despatches 939 and 946, May 7 and 10 giving particulars of official Uruguayan request for assistance in the Hydroelectric Project together with the Legation’s observations thereon should reach the Department shortly.

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Since the matter was raised I have again discussed the matter with Guani and he has promised to furnish the technical details of the machinery and equipment desired. As regards delivery he said no date had been set because the Rione had no means of determining how long the construction of the equipment which is to follow special specifications, no doubt originally drawn by German engineers, would take in American plants, but that the turbine and equipment were desired as soon as possible.

I emphasized that Rione’s statement forwarded in my despatch 946, May 10 did not appear to satisfy fully our inquiries with regard to the relationship between the proposed contract and that between the Uruguayan Government and the German syndicate particularly respecting the continued presence of Germans on the project. The Minister for Foreign Affairs informed me that he would clarify this matter in the next few days in a memorandum.

Although the Uruguayan Government has indicated that it would be prepared to consider the contract as a separate one to be completed by American engineers it is not clear from the Department’s telegram whether this assurance would be sufficient or whether the Department predicates its assistance on the grounds that the entire contract be awarded to an American company, thus eliminating German influence entirely. In any case as suggested in my despatch the Legation believes that the Department may desire to insist upon obtaining a copy of the original contract with the German syndicate before making final decision.