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

No. 1807

Sir: I have the honor to refer to my airgram A–81 and my despatch no. 1642 both of September 26, 1942,41 and to previous correspondence concerning the desire of the Uruguayan Government to obtain a loan for financing public works.

Reference is made also to the Department’s telegram no. 610 of October 10 stating, in reply to my query, that it prefers that the official request for a loan be taken up in Washington through the Uruguayan Ambassador.

As explained in the closing paragraph of my despatch no. 1642, this point had been left in abeyance in the memorandum which I handed President Baldomir on September 24.

Following the receipt of the Department’s telegram no. 610, I prepared a supplementary memorandum recalling the suggestion that the Uruguayan Government prepare a program requiring very much smaller quantities of iron and steel and adding that, as respects [Page 725] financial assistance desired in carrying out this program, the Department of State suggested that appropriate official negotiations be initiated in Washington through the Uruguayan Embassy. (A copy and an English translation of this memorandum are enclosed for the Department’s files.42)

This supplementary memorandum (together with a copy of the memorandum of September 24) was handed to Dr. Guani, who had been absent in Chile at the time of my interview with the President. I requested Dr. Guani to bring the matter to the President’s attention.

A few days ago, the Director of Public Credit, Sr. Juan Ferrando, telephoned me on another matter and mentioned incidentally that a memorandum was being prepared by direction of the President regarding a revised public works program and would be sent me shortly. I took occasion to inform him that the memorandum should be transmitted to the Uruguayan Ambassador in Washington through whom the official request for aid in financing was to be made. (A copy of the memorandum will, however, be sent me for my information.)

Yesterday, I had an opportunity to see the President and I took advantage of the interview to make it very clear that the next step in the loan discussions should be taken in Washington.

The President gave me to understand that appropriate instructions would be sent to Ambassador Blanco43 in due course. He referred again to the flexibility of the Government’s public works program and the consequent possibility of adjusting the work in large measure to the materials which may be available at the particular time. He stressed the need for assistance with a view to stimulating and strengthening the local bond market which is being called upon to take considerable quantities of Government securities. The Government will rely on Uruguayan sources for the great bulk of its financing but desires some assistance from us in order to prevent any undue depression of the domestic market.

As already stated in my despatch no. 1642, I feel strongly that, in view of the circumstances surrounding the proposed loan and the purpose for which it is desired, any contract between the Uruguayan Government and the Export-Import Bank should give the Government sufficient latitude to use the funds when and where needed.

Respectfully yours,

William Dawson
  1. Latter not printed.
  2. Not printed.
  3. Juan Carlos Blanco, Urguayan Ambassador in the United States.