Memorandum by the Ambassador to Ecuador (Scotten), Temporarily in Washington 40

A question which is causing me considerable concern is the exhaustion of the funds for the completion of the Quevedo–Manta Highway in Ecuador. Without going into detail, the fact is that the Development Corporation set aside $2,500,000 to construct this highway. The Ecuadorian Government itself appropriated approximately $200,000 for this work. These appropriations were based upon estimates made by the Ambursen Engineering Corporation, which estimates have proven to be entirely too low.

The net result is that the road is only approximately fifty percent completed and no funds are available for its completion. I understand that the Ecuadorian [Government] has recently requested an extension of credit from the bank for this purpose, but have been turned down on the basis that the bank has filled its commitment and it is up to the Ecuadorian government to use its own funds to complete the road, if it so desires.

Technically, the bank is, of course, correct and is under no obligation to extend the line of credit. However, the fact remains that the estimate was made by a supposedly reliable American firm and I feel that unless the Department is able to persuade the bank to extend the line of credit to permit completion of the road, this project will give us a black eye from which it will be very difficult to recover.

I consider many of the requests of the Ecuadorian [Government] to be unsound and unwarranted, but I really do believe that in our own interests we should accede to this one request.

R. M. Scotten
  1. Addressed to the Director, Office of American Republic Affairs (Briggs), and to the Chief, Division of North and West Coast Affairs (Flack).