Foreign Relations of the United States, Diplomatic Papers, 1942, The American Republics, Volume V

710.Consultation 3/693

Memorandum by Mr. Emilio G. Collado⁸² to the Under Secretary of State (Welles)

[Washington,] February 28, 1942.

Progress in Carrying Out Economic Arrangements Discussed at the Rio Meeting

Mr. Welles: Reference is made to my memorandum of February 9, 1942⁸³ detailing the economic discussions and agreements at the Rio meeting. The present memorandum is intended to indicate what action has been taken with respect to these matters in the four weeks since the return of the United States Delegation.

Bolivia

1. The Bolivian Government has ratified the arrangement with the Standard Oil companies of Bolivia and New Jersey.

2. The Export-Import Bank and the Department have transmitted suggestions to Mr. Bohan⁸⁴ for the charter and by-laws of the proposed development corporation, and discussions are actively taking place at La Paz.

Brazil

1. The visit of the Minister of Finance^84a will draw to a close next week with the following accomplishments:

a) Broad agreement for a cooperative program for the development of strategic and basic materials involving a $100,000,000 credit agreed to by Mr. Jesse Jones.⁸⁵

b) Arrangement for carrying out the long discussed Itabira iron ore project—this is in its final stages.

c) The rubber project contract has been agreed to by the Minister and Mr. Will Clayton.⁸⁶

d) An organization to stimulate the collection of wild rubber for the United States war effort is being discussed and worked out with the Brazilian mission.

e) A revised lend-lease agreement will be signed with the Ambassador on Tuesday.⁸⁷

Chile

No action pending further developments in Chile.

Costa Rica

The Export-Import Bank has agreed to the extension of a credit of $160,000 for improvements in the San José water supply system. Mr. Wheeler of the Department of Agriculture⁸⁸ is arranging for the Agricultural Attaché⁸⁹ to proceed to San José to discuss the possibility of increasing production of strategic materials and foodstuffs with Dr. Luis Anderson and the Costa Rican Government.

Ecuador

The four point program entered into at Rio⁹⁰ is being rapidly implemented:

a) The waterworks and other improvements in Quito and Guayaquil have been studied by engineer Del Valle who has returned to draft and present his final report.

b) An understanding for the establishment of a development corporation and the extension to it of a credit of $5,000,000 has been reached by Dr. Salazar⁹¹ with the Export-Import Bank.

c) Dr. Salazar has signed with the Secretary of the Treasury a $5,000,000 monetary stabilization agreement.

d) Agreement regarding the $2,000,000 health and sanitation program grant has been worked out with the Office of the Coordinator of Inter-American Affairs and entered into by the Department with Dr. Salazar.

Honduras

The Honduran Minister has presented his Government’s interest in a program of highway construction and establishment of a national bank with issue, commercial, and agricultural mortgage functions. The highway program involves completion of the Inter-American Highway (the Honduran third would amount to $1,000,000),⁹² a highway from the Pacific to Tegucigalpa (about $1,700,000), a highway from Tegucigalpa to the north (total cost estimated at $5,200,000). Discussions are going forward with the Export-Import Bank on the basis of handling the first two items totaling $2,700,000.

Discussions are going forward with the Treasury looking towards the sending of an expert to study the central bank matter regarding which very few details are available in Washington.

Nicaragua

The Ministers of Foreign Affairs and Finance will arrive in Washington at the end of next week to discuss among other things, presumably, the completion of the Inter-American Highway and other highway matters, and a possible increase in the exchange credit to the National Bank. The Department has recommended that the Export-Import Bank consolidate the present two $2,000,000 loans into one $5,000,000 loan to handle the entire highway program, due regard being given to the priorities situation.

Uruguay

The Uruguayan Government has agreed in principle to the terms proposed by the Maritime Commission for the chartering of the refrigerated vessel Laura.

E. G. Collado

82. Special Assistant to the Under Secretary of State.
83. Not printed.
84. Merwin Lee Bohan, Chief, U. S. Economic Mission to Bolivia.
85. Arthur de Souza Costa.
85. Administrator of the Federal Loan Agency; for correspondence on strategic materials, see pp. 674 ff.
86. Deputy Federal Loan Administrator; for correspondence concerning rubber, see pp. 691 ff.
87. March 3, 1942; for text, see p. 815.
88. Leslie A. Wheeler, Director, Office of Foreign Agricultural Relations.
89. Presumably Charles L. Luedtke.
90. For correspondence on this program, see vol. vi, section under Ecuador entitled “Program for economic cooperation between the United States and Ecuador.”
91. Eduardo Salazar Gómez, Ecuadoran Minister-Counselor.
92. For text of agreement between the United States and Honduras regarding the construction of the Inter-American Highway, effected by exchange of notes signed September 9 and October 26, 1942, see Department of State Executive Agreement Series No. 296, or 56 Stat. (pt. 2) 1848.