Foreign Relations of the United States, 1946, The American Republics, Volume XI

822.24/4–1946

confidential

[Washington,] June 24, 1946.

The problem discussed in Mr. Dearborn’s memorandum of June 2144 really breaks down into two matters:

(1): The question of transfer of military equipment to Ecuador as part of the negotiations for the Galápagos. I have generally believed that we should be very careful about connecting the transfer of armaments with any other negotiations, because it would jeopardize our basic policy of equal treatment to all countries in terms of their reasonable requirements for arms. However, the importance of the Galápagos agreements, and the general military inferiority of Ecuador, may make it necessary and possible to connect arms transfers with the Galápagos negotiations. I doubt, however, we could effectively transfer arms to Ecuador in return for base rights until after enactment of the pending Inter-American Military Cooperation Bill.45
(2): The question of whether any credit, particularly time payment, should be extended to other countries in connection with the purchase of arms. The interim program was intended to make available to other countries small amounts of arms which they wanted immediately and which they could presumably pay for in cash. For the long-range program under the expected legislation, I believe that the extension of credit may be both necessary and desirable, particularly if other arms-producing countries offer favorable terms of sale involving credit. I am exploring this subject now with a subcommittee of the Department’s Arms Policy Committee, and shall have some recommendations to submit for your consideration in the near future.

John C. Dreier