811.51/4476: Telegram

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

572. Your despatch no. 3307, July 24, 1942; Department’s telegram no. 506, July 9, 1942, 9 p.m., and your unnumbered telegram of August 5, 11 a.m.9 The proposed decree submitted with your above-mentioned despatch provides that the Minister of Finance may determine whether dollars delivered to the Banco Central del Ecuador may be converted into sucres. It was stressed in the Department’s abovementioned telegram of July 9 that currency held in the Central Bank on that date would be accepted by the United States Treasury Department upon the basis of controls outlined in that telegram being instituted and effectively enforced. It was stated that any other currency should be forwarded to the United States through the Central Bank on a collection basis, except for amounts under $50 received from travellers from the United States and except for remittances under $50 received in Ecuador from Ecuadoran citizens working in Panama upon presentation of a letter and the postmarked envelope indicating that [Page 419] the funds were forwarded from Panama. The Department and Treasury strongly urge that the proposed decree be amended to provide that such currency be accepted by the Central Bank on a collection basis only. No assurances can be given the Central Bank that any currency, except currency held by the Central Bank on July 9, 1942 and amounts under $50 accepted from travellers from the United States and remittances under $50 from Panama as described above, will be accepted for redemption in the United States. In this connection you should point out to the appropriate Ecuadoran authorities that practically all of the other American Republics have instituted United States currency controls supplementing those established by this Government and that those controls provide that currency will be accepted on a collection basis only.

Relative to your inquiry concerning the provision which would allow travellers entering Ecuador from the United States to carry with them amounts of $50 in any one month, it is the view of the Department and the Treasury Department that such provision is not objectionable.

With reference to your unnumbered telegram of August 5, 11 a.m., the matter has been discussed with Treasury and it is felt that the questions raised by you must be answered in the negative. Should this Government accept currency converted by the local Ecuadoran agency, either for free or blocked sucres, special privileges would be accorded to Ecuador which have not been accorded to the other American republics which have already instituted appropriate controls over the movement of dollar currency. It is believed that this Government would be open to criticism if it should thus discriminate at this time between the other American republics in favor of Ecuador. In addition, the U.S. Treasury alone is in a position to determine whether currency is counterfeit.

  1. Telegrams not printed.