811.20 Defense (M)/6016: Telegram

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

271. Reference Department’s telegram No. 200, March 27, 10 p.m.69 In a long conference the Minister of Finance indicated his approval in principle to the proposal for the purchase of Ecuador’s entire rubber production by the Rubber Reserve Company. I am confidentially informed that before discussing this matter with me the Minister of Finance discussed it with the President70 and his opinions were authoritative.

He stated that in order to construct a portion of trunk road to the principal rubber producing area a fund in excess of $500,000 would be advisable and suggested $1,000,000 but he thought this should be verified by technical studies. He also proposed that a bonus of 7½ cents be paid to the Government on annual purchases in excess of 1,000 tons and a 10 cents bonus on annual purchases in excess of 1500 tons. This would facilitate amortization of the larger cash advance.

The Minister of Finance requested a quota for tires for Ecuador but if this is not possible he requested assurance that tires would be allocated to Ecuador to cover needs for essential public service as provided to Americans in the United States plus needs for public transportation in Ecuador. This assurance is necessary to support the Government when announcing a monopoly on the sale of rubber in view of the reported offers by Argentina which includes the supplying of tires.

For the same reason he would appreciate receiving details as to the prices agreed upon in the contracts with other Latin American countries for rubber of a quality similar to that of Ecuador. He also asks if price of 35 cents (reference Department’s telegram No. 168, March 7 [17], 9 p.m.) applies to “Andulla” type or to “Maroma” grade and what will be price for washed and pressed rubber.

  1. Not printed; according to this telegram the plan of the Rubber Reserve Company was to purchase through 1946, and this long-range plan offset any immediate price disadvantage.
  2. Carlos Arroyo del Río.