740.00112A EW/3–1946: Airgram

The Ambassador in Ecuador (Scotten) to the Secretary of State


A–94. Reference Department’s secret circular airgram of March 4, 1946,61 requesting a report on the current replacement situation and the prestige of the Proclaimed List.

The last overall summary of the replacement program with particular reference to spearhead firms was transmitted to the Department in the Embassy’s strictly confidential report No. 12 of January 17, 1944,61 entitled, “Monthly Report on Operation of Freezing and Blocked Properties Control”, written at the close of the regime of President Arroyo del Rio and covering the period during which almost all enemy commercial activity was eliminated. That report expressed surprise but satisfaction in the fact that all but nine matters were settled.…
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In brief it seems that, except for two firms, the Joyería “El Brillante” and the ice plant “La Polar”, which are objectionable but can hardly be described as spearheads, the replacement program in Ecuador was completed in 1944.
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—Considering that there appears to be no actual spearhead firms in Ecuador, it cannot be expected that any further action may be taken by the Ecuadoran Government on the replacement program.
It will be recalled that the basic Ecuadoran act under which Axis activity was eliminated was Executive Decree No. 854 of the former Arroyo regime. As a result of the revolution of May 1944, adjudication to private persons made under that decree were annulled by a decree of the National Constituent Assembly on March 2, 1945, (Embassy’s confidential despatch No. 2839 of March 20, 1945 “Decree Annulling Adjudications of Blocked Properties”61). This action left transfer of former Axis properties open to possible return to the original ownership, menacing the whole program until November 7, 1945, when the Embassy secured the guarantee of the Ecuadoran [Page 866] Government that it would not permit under any circumstance the return of any blocked property to its former owner. A copy of the guarantying note was transmitted to the Department as an enclosure to the Embassy’s confidential despatch No. 3666 of November 9, 1945, with the subject “Recommendations for Names to be Retained on Hard Core Proclaimed List for Ecuador”.63
The Office of the Director of Blocked Properties has managed enemy properties and funds very effectively, but as noted in the Embassy’s secret airgram No. A–86 of March 14, 1946,63 concerning repatriation there is mounting pressure on the Ministry of Foreign Affairs to clarify the status of blocked persons, indicating a growing attitude of forgiving, forgetting and returning to business as usual.
The prestige of the Proclaimed List in Ecuador seems to be nonexistent. Factors causing this low state include the awarding of agencies by United States firms to persons formerly listed, the lack of listing of many of the returned German internees, and the general feeling that the war is won and over as far as Ecuadorans are concerned.
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