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

No. 2360

Sir: I have the honor to refer to my telegram no. 337 of March 24, 3 p.m., and to previous correspondence concerning changes desired by the Uruguayan Government in the loan agreement recently signed by Dr. Guani with the Export-Import Bank.

I met President Amezaga yesterday evening at a social gathering and had with him an informal conversation in the course of which he referred to the loan. He said that while he fully appreciated that the agreement followed the lines of similar contracts negotiated by the Export-Import Bank, including that with the Rione, nevertheless in the case of an agreement entered into by the Uruguayan Government itself it would be extremely difficult for political reasons to accept its provisions without amendment.

He stressed in particular the provision in clause 9 giving the Export-Import Bank the right “through its designated representative or representatives to inspect any approved project or projects and to receive and verify all the necessary information regarding all records and accounts relative thereto”. It may be recalled that as reported in my despatch no. 2306 of March 15, 1943, the Herrerista Debate, in violent articles condemning the loan agreement, referred specifically to the designation by the Bank of a “fiscal” (representative with supervisory functions) for the purpose of controlling expenditures under the loan.

In our conversation of last evening President Amezaga said that he hoped very much that matters could be adjusted satisfactorily [Page 791] and that he believed that this could be accomplished if the Export-Import Bank would designate the Bank of the Republic as its representative for the purposes envisaged in clause 9. It may be noted that in the changes proposed by the Foreign Office in its note of March 19 (enclosures nos. 1 and 2 to my despatch no. 2340), it was suggested that clause 9 be amended to read as follows:

“Si el Eximbank, lo considerase necesario, de tiempo en tiempo o en forma regular, cada trimestre vencido, podrá requerir una información, o estado detallado de las inversiones realizadas con cargo a esos recursos, para los fines especificados en los proyectos aprobados y requerir que esas informaciones sean verificadas por el Banco de la República O. del Uruguay. (underscoring by Embassy).

“La República, a pedido del Eximbank, podrá suministrar cualquier información adicional relativa al desarrollo total o parcial de cualquier proyecto aprobado bajo este convenio.”60

In his conversation, the President made it quite clear that he considers Dr. Guani responsible for the situation which has arisen. He said that Dr. Guani had failed to inform the Government fully and had acted independently because of his desire to handle the whole matter himself.

In the interest of our relations with Uruguay and for Dr. Guani’s sake also, I trust that some satisfactory solution may be worked out.

Respectfully yours,

William Dawson
  1. Translation: “If it be considered necessary, the Eximbank could, from time to time or regularly each quarter, require a report or detailed statement of the expenditures chargeable to these resources, for the purposes specified in the approved projects and require that these reports be verified by the Bank of the Republic of Uruguay.

    Upon request of the Eximbank, the Republic could provide any additional information relative to the total or partial development of any project approved under this agreement.”