Memorandum by Mr. Henry Dearborn of the Division of North and West Coast Affairs


The following is the procedure which the Department of State will follow with regard to the Galápagos Base negotiations:

Mr. Acheson will, as soon as possible, arrange a meeting with the Secretaries of War and Navy, who will be accompanied by officers of those Departments fully acquainted with the Galápagos question. It will be explained to them that, since those Departments have informed us of their inability to give us a figure representing the value of the Galápagos Base to the United States, we are prepared to propose to the Ecuadorans the minimum objective set forth in the recent secret communication received from the Joint Chiefs of Staff—joint use by Ecuador and the United States of a Galápagos Base. For this use we will, as authorized by SWNCC, offer Ecuador as a maximum remuneration, the maintenance costs of the Base. It will be explained that in our opinion this may not be acceptable to the Ecuadorans and may result in a request for the withdrawal of the American forces altogether. The purpose of this meeting will be to place the Secretaries of War and Navy clearly on record as endorsing the action recommended to the State Department by SWNCC.
An immediate examination will be undertaken with Mr. Wayne Taylor, President of the Export-Import Bank, to determine whether there are now before the Bank any projects which merit early execution. If there are such projects (for example the H.T. Smith application for a three million dollar loan to finance municipal waterworks projects), the State Department will recommend to the Bank that they be favorably considered.10
The Ecuadoran Ambassador will be informed that the Eximbank stands ready to give favorable consideration to extending credit to Ecuador for the construction, in order of their importance to the economy of Ecuador, of all those projects duly recommended by the firm conducting the million dollar survey referred to in the Aide-Mémoire signed in Quito by representatives of Ecuador and the United States on September 1, 194511—provided that these projects shall be considered economically sound and commercially feasible by the Eximbank and the Ecuadoran Government; the credit extended therefore [Page 839] shall be secured by such guarantees as the Eximbank may require. If Mr. Taylor names any projects meriting early execution the Ambassador will be so informed.
The Ecuadoran Ambassador will be requested to receive authorization from his Government to modify the text of clause 5 of the Aide-Mémoire of September 1, 1945, to read as follows in view of the recent separation of the loan and the Galápagos Base matters.

“It is understood that any credit extended by the Export-Import Bank shall be secured by such guarantees as the Export-Import Bank may require. These funds are to be made available on such terms and conditions as may then be mutually satisfactory.”

Finally, the Ecuadoran Ambassador will be informed of our proposal that the Ecuadorans permit us to use the Galápagos Base jointly with them in return for our paying the maintenance costs of the Base.

Steps 3, 4 and 5 will be undertaken in the same conversation with the Ecuadoran Ambassador but this conversation should not take place until the procedure outlined in this memorandum has been cleared with the War and Navy Departments and the Exim-Bank.

  1. For documentation on proposals for the economic development of Ecuador, see pp. 873 ff.
  2. Not printed, but see telegram 657, August 28, 1945, from Quito, and subsequent documents, Foreign Relations, 1945, vol. ix, pp. 1018 ff.