The Secretary of State to the Ambassador in Ecuador (Scotten)
507. Reurtel 611, August 7, 3 p.m.38 Progress on the Galápagos treaty and loan negotiations are presumably a pretext for Ecuadoran Ambassador’s return. Salinas base apparently out of picture.
Am air mailing for your comment Ambassador’s draft for Galápagos treaty38 which Dept is considering and may use. In view of uncertainty, however, make no mention of this to Ecuadoran Government.
Am also air mailing you a memorandum38 approved by Dept, Ecuadoran Ambassador and Eximbank. This provides for transformation of Development Corporation into purely Ecuadoran planning organization. No specific figure named for credit in memorandum, though $20,000,000 maximum is mentioned in covering letter to Ambassador. Eximbank and Ecuadoran Government must approve all specific projects for which credit will be used. That Government and Development Corporation are to select American engineering firm as consultant and $1,000,000 is available for preliminary studies upon reorganization of Development Corporation. Interest and amortization of eventual credit to be guaranteed by presumptive Galápagos base payments and such other security as Eximbank may require. Apart from above mentioned million, no credit until Galápagos base treaty satisfactorily concluded.