822.51/7–146: Telegram

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

316. For Scotten from Eximbank. Reference our cable 286 of July l96 Eximbank at Ecuador’s request submitted statement of arrearage as of July 1 on Development Corporation debt. Treasury Minister97 by telephone and cable proposed Eximbank accept note for defaulted principal and interest. Bank expressed willingness to accept note for matured principal installments of approximately $94,000 but insisted upon payment about $173,000 interest offering to consider revision present maturity schedule on all outstanding Ecuadoran debts held by Bank extending them over 15–year period. Minister accepted and interest paid July 24 but disposition of note payment of matured principal still pending.

Pursuant to arrangements made prior to above described development Eximbank received Dr. Mendoza98 on July 25. Due to intervening acceptance of Bank’s counterproposal Eximbank indicated its willingness to proceed with complete negotiations Guayaquil Waterworks agreement.

[Page 880]

Bank is sending Messrs. Kinnear, Sullivan and Chase to Ecuador, arriving August 4, principally to discuss with Ecuadoran officials and Jones Company representatives proper procedures to be followed in connection with technical and financial aspects of Guamote-Tambo Highway project. Public Roads Administration is sending to Ecuador a resident engineer who will supervise project on Ecuador’s behalf with Eximbank concurrence. Bank’s representatives will cooperate with him in getting the project under way on basis of mutual understanding. As a result of discussions with Dr. Mendoza, they are authorized to discuss terms and conditions to be included in Guayaquil waterworks credit. Any information brought to their attention on other Ecuadoran matters will be reported to Bank.

Please make reservations for them at Cordillera Quito August 4 at Metropolitano in Guayaquil August 6 and plane reservations Quito-Guayaquil August 6. [Eximbank.]

Byrnes
  1. Not printed.
  2. Enrique Arizaga Toral.
  3. Rafael Mendoza Aveles headed the Ecuadoran Mission to the United States concerned with the water works loan.