The Ambassador in Venezuela ( Corrigan ) to the Secretary of State

No. 4536

Sir: I have the honor to report that immediately upon my return to Caracas the Foreign Minister called me to the Chancellery to discuss the latest developments in the purchase of the Caracas–Valencia, Railway.

He handed me a memorandum, copy and translation of which are enclosed,97 in which is incorporated the report of the Venezuelan Minister at Madrid, which states that the Spanish Government has given full guarantee that the funds obtained from the sale of the Railway will be blocked in Spain during the time fixed by the interested parties, and that these funds may be invested in Spanish securities of the type which the Institute de Moneda has established for cases of blocking.

The Minister informed me that this undertaking on the part of the Spanish Government had been secured after a considerable amount of diplomatic effort and it was hoped that the arrangement indicated would be satisfactory to the American Government, so that the Venezuelan Government might proceed immediately with its plan to make an outright purchase and avoid complications that might arise out of its acquisition by other means.

I then asked him what would be his attitude toward the undesirable personnel, German nationals, who now operate the railroad and he assured me that all such elements would be eliminated.

The Department has been fully informed by previous despatches, and by recent conversations on the subject while the Ambassador was in the Department of the Embassy’s opinion of the actual or potential danger of leaving this strategic stretch of railroad under the control of enemy nationals. It is hoped that the steps taken by the Venezuelan Government to assure blocking of the funds in Spain will be acceptable to the United States Government.

I would appreciate receiving the Department’s early reply to enable me to inform Dr. Parra-Pérez promptly thereof.

Respectfully yours,

Frank P. Corrigan
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