740.22112 RP/8–2644

The Ambassador in Ecuador ( Scotten ) to the Secretary of State

No. 2040

Sir: I have the honor to refer to the Department’s confidential instruction No. 802 of August 17, 1944 (File No. 740.22112 RP/7–2444), in which the Embassy was informed that, if certain enemy-owned securities now blocked by the Ecuadoran Government could be considered liquid investments, the Department would not suggest that the Embassy attempt to urge the forced sale of such securities.

It has been ascertained that all the securities blocked and mentioned in the Embassy’s report No. 68 of July 24, 194489 may be considered relatively liquid. Shares in “La Previsora”, Banco Nacional de Crédito are easily disposed of in the Ecuadoran market, the selling rate generally fluctuating between par value and 10% above par. The other investments mentioned are relatively less liquid, the market for them being slow and uncertain. It is estimated, however, that most could be sold at not less than 30% below par. In no case are the blocked securities sufficiently numerous to give the listed owners any substantial control over the issuing firms or entities.

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In view of the Department’s instruction and the facts in the preceding paragraph, the Embassy does not contemplate suggesting to the Ecuadoran authorities that efforts be made to force the sale of the securities in question.

Respectfully yours,

For the Ambassador:
E. Allen Fidel

Economic Analyst
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