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

No. 2144

Sir: I have the honor to transmit herewith for the Department’s files the Spanish text, as published in the local press, of President Baldomir’s message to the Council of State requesting authorization to contract a loan of $20,000,000 with the Export-Import Bank,46 and of the decree authorizing the same which was unanimously approved by the Council of State on February 2, 1943.

The announcement has evoked relatively little editorial comment. El Tiempo, administration organ, characterizes the loan as a “brilliant operation”, calling attention in particular to the advantages obtained in relieving the local bond market of the necessity of absorbing an equivalent amount of internal bonds. La Mañana, (opposition Colorado) which had previously taken a strong adverse position when a loan of $50,000,000 was mentioned in the press, now criticizes the haste with which the matter was concluded, particularly in view of the approaching session of Congress. El Debate (Herrerista and violently anti-Administration) makes similar observations. La Tribuna [Page 784] Popular, consistent opponent of the present administration, takes the occasion to review in critical terms the financial policy of the past four years and concludes with the observation that the incoming administration by a more statesman-like handling of the country’s financial problems might have avoided the necessity of an external loan. In this connection it should be noted that the President-elect, Dr. Amezaga, is Vice-President of the Council of State, which is composed principally of Batllistas and Baldomiristas, i.e. the political groups responsible for his election. In approving the loan without waiting to submit it to the new Congress, the Administration and the members of the Council were presumably motivated by a desire to avoid the inevitable delays incident to organizing the new session rather than by a fear that the project would not be approved.

El Plata (Independent Blanco) comments in generally favorable terms upon the conclusion of the loan, but also expresses the hope that the new administration will follow a conservative financial policy.

Respectfully yours,

William Dawson

[The agreement between the Republic of Uruguay and the Export-Import Bank providing a loan for public works was signed at Washington, February 4, 1943. It provided that the Export-Import Bank extend a credit of $20,000,000 for the purchase of supplies, equipment, and services. This was for roads, bridges, sanitation and sewerage facilities, reservoirs, agriculture and irrigation projects, certain specified airports, and hydroelectric and railroad construction insofar as these did not require war-needed materials from the United States. Uruguay was to present to the Bank statements of withdrawal of funds accompanied by promissory notes. The loan was to be paid in twenty-five semi-annual installments with interest at four percent. The supplies and equipment were to be purchased from the United States. The Bank was to have the right to inspect public works projects and verify records and accounts. Uruguay was to furnish quarterly and other reports, to levy no taxes on the promissory notes, and to make no payment from the loan to firms or persons on the Proclaimed List.]

  1. For résumé of the terms of the loan agreement, see bracketed note, infra.