Memorandum by Mr. E. E. Chase, an Examiner of the Export-Import Bank34

Ambassador Plaza,35 on August 17, called at the Bank to pick up a proposed revision of the Corporation’s charter and bylaws and a memorandum of proposed procedure which he wished to have to facilitate his discussions with his Government pertaining to the reorganization of the Corporation from an operating entity into the purely planning agency desired by the Ecuadoran Government. He also was given a draft amendatory agreement which would be approved at the time of reorganization and which would bring the terms of the agreement with Eximbank into conformity with the charter and bylaws when revised. He conferred with Mr. Machold, Mr. Arey36 and the undersigned.

He was informed by Mr. Arey that legal advice in Ecuador should be sought to insure that the documents and steps taken in connection with the reorganization were in conformity with Ecuadoran law.

The Ambassador’s attention was called to the following points and each was discussed briefly:

A minimum of changes were made in the charter and bylaws, especially in the objects and powers, it being understood that the Corporation would limit its functions to those desired by the Government without reducing the powers in the existing charter and bylaws.
If it is not a requirement of Ecuadoran law that stockholders must receive thirty days prior written notice before holding a meeting the requisite action by the stockholders may then be taken without delay after waiver of notice by stockholders.
The Ambursen contract was not disturbed in the proposed revision because the construction work was proceeding smoothly and it appeared desirable to allow it to proceed toward its orderly conclusion under existing arrangements.
The stock of the Corporation held by Eximbank would be relinquished following the reorganization and execution of the Amendatory Agreement.
In response to the Ambassador’s question regarding the suggestion in the outline of proposed procedure that funds be appropriated by the Ecuadoran Government to service the Corporation’s indebtedness to Eximbank it was explained to him that after it was reorganized as a planning agency without assets or income and with the Government jointly liable without benefit of the thirty-day waiting period following default by the Corporation, the Government would be directly and immediately responsible for the payment of principal and interest.
The Ambassador made the observation that the Agricultural Experiment Station was favorably regarded and expressed the hope that its work would continue under the supervision of the appropriate department of the Government.

The Ambassador was pleased to have the outline of procedure and the documents revising the Corporation’s set-up because it gave him, he said, something concrete to lay before his Government and would avoid needless discussion in the Corporation’s reorganization meetings.

He said he had not initialed the Aide-Mémoire pertaining to the reorganization although he was authorized to do so, nor had he sent it to Ecuador, stating that it was more satisfactory to deliver it personally and more pleasing to the President if he (the President) initialed it.37

E. E. Chase
  1. Copy transmitted to the Department in a letter of August 23, 1945, from Mr. William F. Machold, Assistant to the President, Export-Import Bank.
  2. Galo Plaza, Ecuadoran Ambassador.
  3. Hawthorne Arey, Official of the Export–Import Bank.
  4. Aide-Mémoire not printed. Signed on September 1, it provided for the reorganization of the Ecuadoran Development Corporation, for employment of an American engineering firm as consultant, and for a loan, up to a million dollars, for a survey of economic planning projects. Funds that might become available from the United States for the use of the Galapagos Islands were to be earmarked for payment of amortization and interest.