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

No. 6689

Sir: I have the honor to refer to the Department’s circular airgram of October 9, 1945, 9:35 a.m.,2 requesting, on the basis of presently available information and without consulting the local authorities, estimates of German assets within Uruguay and of the amount of reparation claims which are likely to be presented by this country.

Under the circumstances detailed below, the following general estimates may be advanced:

German Assets in Uruguay US$ 10–20 Million
Uruguayan Claims 2–7 Million

German Assets in Uruguay

No distinction has been made between “German External Assets” (herein considered as owned or controlled from Germany) and assets owned and controlled by Germans outside Germany including Germans [Page 1400] in Uruguay. No such distinctions are made by the Uruguayan Government which is definitely inclined to base any measures against property on the question of guilt on the part of the owner (i.e. close relationship with Nazis or pro-Nazi and anti-National activities) rather than on his residence, citizenship or ideology. Examples of this feeling are the interventions of Ernesto Quincke, S.A., wholly owned by native-born descendants of Germans; of Eugenio Barth & Cia., substantially owned by persons in similar circumstances; and of Staudt & Cia., substantially owned by German-born, Argentine-naturalized citizens. The Government considers these firms Axis-tainted and therefore proper subjects for investigations directed toward possible liquidation.

If (1) the Uruguayan Congress passes the pending replacement bill authorizing the Government to take these liquidatory measures3 and (2) evidence and information substantiate cases of guilt against said firms, or any others, the Government is likely to consider their assets, or the proceeds therefrom, as available for its own reparation claims and the excess, if any, for the claims of the United Nations provided future Inter-American Conferences provide the necessary legal basis therefor.

On the other hand, assets situated in Uruguay which are owned or controlled from Germany whose owners are not individually charged with pro-Nazi activities are not likely to be the subject of expropriation or liquidation. In these cases, if the high-level policy is to call in these assets or their converted value into Germany, it appears certain that the Allied Group Control Council will have to do it. The local Government would not oppose the flight of this capital from Uruguay if the owners ordered its transfer to Germany under the directions of the Control Council; past experience has shown a ready willingness on the part of Uruguay to take a passive attitude when such an attitude helps the Allied Economic Warfare Program.

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

Respectfully yours,

For the Ambassador:
Edward J. Sparks

Counselor of Embassy
  1. Not printed.
  2. Action on the replacement bill appears to have been indefinitely suspended.