740.22112 R.P./7–2444
The Secretary of State to the Ambassador in Ecuador ( Scotten )
The Secretary of State refers to the Embassy’s report no. 6888 of July 24, 1944 entitled “Monthly Report of Operations on Freezing and Blocked Properties Control”. The report encloses a statement of securities belonging to certain Proclaimed List nationals, indicates that the Blocked Properties Control has adopted a passive attitude with regard to the disposition of such securities, and requests the comments of the Department concerning the fact that the Embassy has not especially urged the forced sale of these securities in view of the Government’s intention of investing all blocked funds in bonds.
Department’s airgram no. A–307 of June 27, 1944 concerning the investment of blocked funds stressed the importance of maintaining blocked funds in a liquid condition. Since the Ecuadoran Government is planning to invest all blocked funds in bonds, the question in this instance resolves itself into a matter of relative liquidity, the [Page 1082] most important consideration being whether the present securities may be considered a liquid investment. If they are prime securities of the type having a ready market the Department believes that no useful purpose would be served by attempting to ascertain whether they are more or less liquid than the Government bonds in which the proceeds would be invested.
The Embassy does not mention the possibility that the securities might give the Proclaimed List nationals a substantial control over the activities of firms which issued the securities. The Department, therefore, assumes that this is not the case. If this assumption is correct and the securities may be considered a liquid investment the advantage of urging the forced sale of the securities in question does not appear to be very great, and the Department would not suggest that the Ecuadoran Government be urged to force the sale of the securities, especially not at this time when the transfers that have been made by the Blocked Properties Control are being questioned in some circles. At the present time it would appear to be more desirable for the Embassy to emphasize the preservation of the transfers that have been made rather than to urge new forced sales of questionable value to the war effort.
- Not printed.↩