Memorandum by the Ambassador to Peru ( White ) Temporarily on Duty in Washington, to the Assistant Secretary of State ( Dunn )

As the Ecuadoran Government is pressing for a treaty covering a base in the Galápagos, the draft being already under consideration, it is high time that the all important question of compensation payments be faced. 3A42 indicates that the military authorities are still unwilling to pronounce themselves, though they are the parties principally responsible.

Until the present war the attitude of the State Department and the Navy was that we were not interested in establishing ourselves in the Galápagos as long as Ecuador held control and always provided that no other non-American power obtained occupational rights. The Navy considered it unsuitable for a coaling station.

Why the Galápagos should have become so much more important from a defense point of view now, when the United States is very much more powerful than it has been since Ecuador became independent, has not been disclosed. The Army, however, is on record since the war as claiming that the base is essential and that it would be unsafe to abandon it in a functioning condition, inasmuch as [Page 1018] Ecuador is unable to defend it. The Navy apparently concurs with this view. The fact that over eight million dollars have already been spent on the base there may have something to do with this attitude.

Another very important consideration would be the precedent which the Galápagos base may constitute for other bases in other parts of the world.

As far as the State Department is concerned since the war, there have been informal observations to the Ecuadorans that payment should bear some connection with and be less than, those for the Panama Canal.

A memorandum of the Eximbank approved by the Department of State44 declares that the payments for the Galápagos are to be a security—the only one so far specified—for a projected loan for public works, etc. to the Ecuadoran Government. While the amount of this loan has not been fixed and will not be for some time, there have been allusions to a maximum of 20 million dollars. Two hundred and fifty thousand dollars a year would be quite inadequate for guaranteeing amortization and interest on such a sum. The Eximbank can ask for other guarantees, but what will they be worth?

The Ecuadorans have very exaggerated ideas of the value to others of the Galápagos Islands.

We have record of approval of retaining a postwar base in the Galápagos from Senators and Members of Congress.

  1. This is a reference to a question-answer statement in a memorandum, SM 2789, of August 8, 1945, for the State-War-Navy Coordinating Committee, signed by Brig. Gen. A. J. McFarland, secretary of the Joint Chiefs of Staff. The identical language of the statement appears in the memorandum of September 5, from the Chairman of the Committee, p. 1020.
  2. Not printed, but see the memorandum of conversation of July 5, p. 1010.