The Ambassador in Uruguay (Dawson) to the Secretary of State
[Received 5:23 p.m.]
270. The Uruguayan Government is considering a program of public works as a means of solving in part the unemployment problem which will become serious as increasing numbers of laborers are thrown out of work because of shortage of essential materials. The financing of such public works will be difficult in view of the fiscal situation. According to reports believed reliable 1941 closed with a deficit of from 12 to 15 million pesos and a still larger deficit is anticipated for 1942.
In order to maintain political stability it is most important that work be found for the unemployed and I believe that the Government will be compelled to resort to public works and particularly such works as road building which do not require imported materials. In view of our desire to assist Uruguay and our inability to supply it with enough raw materials to prevent serious unemployment, it occurs to me that we might be prepared to offer the Government financial assistance for public works. To be effective such assistance should be of a very generous nature as respects terms.
I should appreciate early advices from the Department as to whether our Government could consider lending appropriate assistance and in this event whether I am authorized to discuss the matter with Guani32 and/or the President.33 I believe that this would be an appropriate time for a spontaneous gesture on our part along these lines.