The Acting Secretary of State to the Ambassador in Ecuador (Scotten)
453. For the confidential information of the Embassy the Board of Trustees of the Eximbank approved, subject to final action by the Bank, the request submitted by the Government of Ecuador for a line of credit of $1,000,000 to assist in financing United States engineering services to formulate a public works program consisting of port works at Guayaquil, improvement of railway transportation facilities, construction of important highways and certain irrigation projects. In this connection, the Government of Ecuador plans to reorganize the Ecuadoran Development Corporation so that it will no longer have its present operational functions, making it exclusively a planning organization. The reorganized corporation is to be a wholly Ecuadoran entity without the Bank’s participation in the election of its directors or employees. The establishment of this line of credit will facilitate the Treaty negotiations now being conducted with the Republic of Ecuador.
The Board agreed in principle to increase the line of credit up to $20,000,000 in the aggregate for the purpose of carrying out the aforementioned program, the increase to be conditional upon satisfactory conclusion of Treaty negotiations and upon assurances of adequate security for servicing the loan. The individual projects to be financed under the contemplated program would, of course, be subject to prior approval of the Bank.[Page 1015]
The Board of Trustees also approved the execution of an amendatory agreement to extend to December 31, 1946, the availability of the credit established in 1940,37 amounting to $1,480,000, in favor of the Republic of Ecuador to finance the purchase and exportation of railway equipment, the construction of highways and agricultural development. The credit has been disbursed except for approximately $85,000, and orders have been placed for railway equipment to be financed from this undisbursed balance. Since the equipment ordered is in various stages of manufacture, and may not be delivered until 1946, the Bank was authorized to execute such an agreement.
The Embassy will be kept informed regarding further action.