The Ambassador in Uruguay (Dawson) to the Secretary of State

No. 1185

Sir: I have the honor to refer to recent correspondence concerning the utilization and operation of Uruguayan ships and in particular to the Department’s telegram No. 303 of May 27 and my telegram No. 454 of June 3.

As reported in my telegram No. 454, I discussed the matter on June 2 with Dr. Guani in the sense of the Department’s instructions. He told me frankly and categorically that the Government was not disposed for the time being to make any change in its policy of operating the vessels itself through the National Port Administration. As stated in my telegram No. 433 of May 29, he had given me to understand a few days previously that the President and Admiral Rodriguez Luis were annoyed and felt that Moore-McCormack had sought to bring pressure on the Government in various ways in order to obtain the Uruguayan vessels. In our conversation of June 2, Dr. Guani reverted to our earlier talk in terms which made it very plain that the Government is in no frame of mind to give favorable consideration to any proposal from Moore-McCormack whom it blames in good part for the circumstance that for a time so many American vessels were sailing from Buenos Aires without stopping at Montevideo for cargo. His final comment was that Moore-McCormack should not press the matter further and that the best thing the firm could do would be to “remain quiet”. He said that he would so inform the Uruguayan Embassy in Washington through which the firm’s latest proposal had been transmitted. (In this connection, I may state that Moore-McCormack have recently opened their own office in Montevideo under an American manager, a move which, it is hoped, will tend gradually to improve their position here.)

In view of my conversation with Dr. Guani, I considered it distinctly inadvisable to pursue further the question of the Moore-McCormack proposal or even to suggest for the time being the possibility of an offer for charter or purchase of the vessels by the United States on the basis set forth in the Department’s telegram No. 324 of June 4. I am satisfied that for the moment nothing would be accomplished and useless irritation might be caused by further efforts to obtain the vessels, in the absence of some indication that the Government [Page 708] may be prepared to reconsider its determination to operate the ships itself. I am the more convinced of the present inadvisability of such efforts in view of what the Naval Attaché tells me of his conversations with naval officers and officials of the Port Administration. He has the distinct impression that they are very “touchy” on the subject of the vessels and strongly in favor of continued Uruguayan operation.

This does not, however, preclude suitable efforts on our part to induce the Uruguayans to operate the ships expeditiously and efficiently. I have talked with Dr. Guani along these lines and on June 11 I took advantage of an opportunity to impress on Admiral Rodriguez Luis the seriousness of the shipping situation and the great importance of more effective utilization of Uruguay’s tonnage. The Naval Attaché is assisting me in endeavoring to obtain the cooperation of the Uruguayan authorities in this manner.

Present Situation as regards Uruguayan Vessels.

As was duly reported by the Naval Attaché and noted in my telegram No. 433 of May 29, two of the Uruguayan vessels, the Colonia and the Presidente Terra finally sailed for United States east coast ports on May 24.

Repairs on the Maldonado (which is reported to have been in bad shape) were recently completed. The vessel has made a successful trial run, is to begin loading tomorrow, and is scheduled to sail for the United States about July 2.

After considerable delay (which appears to have been due largely to hestitation or procrastination on the part of Dr. Guani), the Tacoma is now being turned over by the Navy to the National Port Administration with orders to proceed to place it in operation. The Naval Attaché informs me that no inspection has been made thus far to determine the condition of the vessel with particular reference to damage which may have been done by the former German crew. The Naval Attaché has repeatedly urged that such an inspection be made promptly. He now understands that it will be made within a few days as soon as the National Port Administration takes the vessel over from the Navy.

A further vessel, the Punta del Este (the former Dutch Vredenburg), will shortly be put into service. This is not one of the immobilized vessels taken over by the Uruguayan Government but a ship which went on the rocks off Punta del Este in 1939, was salvaged by the National Port Administration, and has been repaired in the Uruguayan Naval Dockyard. Incidentally, American experts agree that the Uruguayan Navy has done a remarkably good job in repairing what appeared to be little more than a useless hulk.

Respectfully yours,

William Dawson