Foreign Relations of the United States: Diplomatic Papers, 1944, The American Republics, Volume VII

810.24/494

Memorandum of Conversation, by the Assistant Chief of the American Republics Requirements Division (Effland)

[Washington,] March 25, 1944.

Participants:	Mr. Fowler, TA28
	Mr. Leddy, TA
	Mr. Keeler, TA
	Mr. Cochran, CCA29
	Mr. Lawson, American Embassy—Managua30
	Mr. Effland, RAR

Mr. Lawson gave the following background for the new import permit system: (1) the system is almost identical with that in operation prior to the decentralization plan; (2) the import permit system rather than exchange control as such was adopted because it proved more effective as a means of administering exchange distribution; (3) the system was designed by the Nicaraguans to favor trade with the United States, since exchange was being wasted on purchases of shabby goods from Mexico; (4) administration of the system is in the hands of an American; (5) the Embassy has excellent relations with the Nicaraguan authorities and has merely to suggest a change if discrimination appears.

Discussion brought out the fact that the Junta de Control publishes daily a list of permits approved, which tends to prevent discrimination.

Mr. Effland stated the FEA³¹ arguments, principally the danger of a precedent which other Central American Governments might follow under less fortunate circumstances.

Mr. Fowler felt that there was no substantive distinction between exchange control and the import permit system. No one could suggest a system to replace the present one, which would solve the peculiar Nicaraguan problem.

Everyone was in agreement that (1) we should rollback decentralization, and (2) no protest should be made against the new import permit system, although we shall reserve our rights under the trade agreement (this specifically provides for publication of quotas on items under import control).³²

28. William A. Fowler, Chief of the Division of Commercial Policy.
29. William P. Cochran, Jr., of the Division of Caribbean and Central American Affairs.
30. Edward B. Lawson, former Commercial Attaché in Nicaragua and newly appointed to that post in Ankara.
31. Foreign Economic Administration.
32. See article VII of the Reciprocal Trade Agreement between the United States and Nicaragua signed at Managua March 11, 1936, Department of State Executive Agreement Series No. 95, or 50 Stat. (pt. 2) 1413.