740.33112 RP/7–945

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

No. 6034

Sir: I have the honor to refer to the Embassy’s telegram 451 of July 5, 6 p.m. and to previous communications on the subject of elimination of Axis economic spearheads in Uruguay, and to transmit the following resume of latest developments:

In General

Thirty-four Axis firms have been declared “intervened and subject to the control” of the Minister of the Interior, Dr. Juan José Carbajal Victorica, and efforts are being made to achieve the intervention of additional enterprises for purposes of control and investigation.

The intervention and control decrees, originally not more than dead-letter promulgations, are being effectively and forcefully implemented since the sole responsibility and administration of their enforcement were reposed on the Minister of the Interior on July 3.

Definite assurances have been received from the Government to the effect that a bill providing for the necessary delegations of powers under which the Executive may proceed to eliminate the Axis spear heads from the economic life of Uruguay will be submitted by July 16. While a debate is anticipated on the principle of granting such broad powers to the Executive, well-informed opinion is that the measure will be enacted into law.

Recent occurrences indicate the Government is now in earnest about carrying out its replacement program.

. . . . . . . . . . . . . .

The Minister has now issued instructions to the interventors that they are to look into everything which may indicate anti-national activities or pro-Nazi associations on the part of the intervened firms; that, outside of the routine over-the-counter business, they are to block [Page 1395] all large or questionable transactions subject to his approval; and that they are to make inventories of existing stocks and audits on the firms’ books dating back as far “as necessary” and return the reports to him.

The Banco Alemán Transatlántico remains under the intervention it has been undergoing since October 12, 1942, which has been effectively enforced by the Bank of the Republic and is to be continued by the same Bank of Republic interventor plus two additional interveners (see enclosure 7).91

The interventors now generally feel they have the backing of responsible authority and have therefore acquired more confidence in the performance of their work, a confidence which they needed to “nose into other people’s business”. As a rule the intervened firms submitted passively, with the exception of the Staudt and Quincke firms. These firms protested violently when the interventors recently began prodding into confidential matters, but the interventions proceeded by force of the Minister of Interior’s orders backed by police.92

The deficiencies which resulted out of the divided responsibility which had previously existed seem to have been remedied.

. . . . . . . . . . . . . .

Respectfully yours,

For the Ambassador:
Robert Y. Brown

Second Secretary
  1. Not printed.
  2. A footnote in the original at this point related to friction between interventors and an intervened firm.