The Ambassador in Paraguay ( Frost ) to the Secretary of State

No. 1448

Sir: I have the honor to refer to the Department’s Instruction No. 972 dated August 17th, 1943, (file No. 611.3431) enclosing for transmission to the Ministry of Finance a revised text of the general provisions and related notes regarding the proposed trade agreement between the United States and Paraguay.

The revised text was submitted to the Foreign Office with an unofficial translation on August 30, 1943, and on numerous occasions since that time the Minister of Hacienda and officials in the Foreign Office have been contacted by First Secretary Montgomery to obtain the approval of the revision, in view of the current belief that no action would be taken until the completion of negotiation of a trade agreement with Argentina. Assurances had been given me repeatedly by the Foreign Minister that the two agreements were not interrelated, and by the Minister of Hacienda that the matter of the American-Paraguayan agreement would be cleared up prior to his departure for Buenos Aires.

However, after the closing of the Foreign Office on October 23, the Embassy received Note No. 718 dated October 22, 1943 with a copy of a memorandum of the Ministry of Hacienda containing observations made by that Department regarding various articles of the revised draft. Copies of this note and its enclosure are enclosed herewith.72 No indication was previously given by the Ministry of Hacienda that the draft was not to be approved unconditionally, and no opportunity was given to discuss it either with the Ministry of Hacienda or the members of the Interdepartmental Committee prior to the departure of the Minister for Buenos Aires accompanied by Mr. Julio Bajac, the [Page 708] leading Foreign Office official dealing with the American-Paraguayan trade agreement.

In view of the manner in which the Minister of Hacienda has handled this matter, I cannot escape the feeling that the delay has been deliberate so as to avoid the necessity for action prior to the Paraguayan-Argentine negotiations. There was ample time to permit consideration and a decision so that it could be submitted to the Department for approval or comment prior to October 25, had the Minister desired to facilitate that course.

There is also enclosed a copy of the unofficial translation73 that was sent by the Embassy to the Foreign Office with the revised draft.

Respectfully yours,

Wesley Frost
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