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

840.51 Frozen Credits/8393

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

No. 3721

Quito, November 4, 1942.
[Received November 18.]

Sir: I have the honor to report that a conference was held this morning by the Ambassador, the Minister of Finance, and the writer, at which time the question of freezing controls was discussed. The Minister of Finance explained that he did not consider there was sufficient time to effectively revise the existing legislation and establish the new system of administration prior to his leaving for Washington. It was pointed out that it had been hoped that new legislation could have been adopted in order that the freezing controls in Ecuador might be made more effective prior to his departure.

Mr. Illingworth explained that it was his desire to place the freezing controls under the jurisdiction of the Office of Priorities and Distribution of Importations. He added that the Director General of this office¹¹ had recently returned from Guayaquil, where he had made a detailed survey of the situation, and that he had found the Guayaquil office in a very disorganized state. It will apparently be necessary to replace a large part of the present staff of the Guayaquil office. Furthermore, the Director General will leave for Washington on November 9 in order to take up various matters prior to the arrival of the Minister of Finance. The necessity for replacing most of the Guayaquil staff of the Office of Priorities and the absence of the Director General from Ecuador would, in the opinion of the Minister, make it difficult to put into effect new legislation and regulations of a drastic character.

As indicated in the Embassy’s telegram no. 861 of October 16, 12 [11] p.m.,¹² Mr. King, of the Consulate General, and Mr. Reid of this office, worked up a draft revision of Decree No. 171 of February 9, and also a complete set of regulations to implement the revised decree. This work was done in cooperation with Mr. Friedmann, the technical adviser to the Minister of Finance, and the material was prepared both in English and Spanish. Insofar as possible all of the recommendations contained in the resolutions approved by the Inter-American Conference on Economic and Financial Controls¹³ were incorporated with few unimportant exceptions in either the revised decree law or the regulations. In addition a memorandum explaining the purposes of the decree law and regulations was drafted and all of this material was submitted to the Minister of Finance through Mr. Friedmann. Copies of the suggested decree law, the regulations and of the memorandum are attached.¹²

The Minister of Finance today stated “You may be sure that I will adopt regulations which will make the control of blocked accounts, et cetera, effective, and this will be done before the end of the year.” It is felt that the Minister is definitely sympathetic to a much more rigid decree law and effective administrative control. He indicated that there might be small points in the draft decree law and regulations which he would find necessary to change, but intimated that the contents in general met with his approval.

While it is to be regretted that immediate action can not be expected on the revised control measures, it is felt that the Minister of Finance is entirely sincere in his statement to the effect that measures will definitely be taken upon his return to Ecuador.

Respectfully submitted,

For the Ambassador:

Howard H. Tewksbury

Commercial Attaché

11. Paul Thur de Koos.
12. Not printed.
13. For correspondence concerning this Conference, see vol. v, pp. 58 ff.
12. Not printed.