The Ambassador in Ecuador (Scotten) to the Secretary of State
[Received 10:24 p.m.]
430. For Sidney Sherwood Export Import Bank from Chase. Complete agreement with Ministry Treasury reached with respect to consolidation and extension Ecuadoran debts held by Export-Import Bank in accordance with Bank’s counter proposal. Defaulted principal will be funded upon exchanges of notes. Ecuadoran Republic will be sole obligor on new notes thus eliminating Development Corps as obligor. Automatic payment by Chase Bank of matured installments principal and interest to be authorized.
Treasury Minister acknowledged original purpose million dollar credit no longer exists and agreed to make written proposal that this credit be diverted toward completion Quevedo-Manta Highway. He observed that Development Corp under present circumstances serves no further useful purpose relative to Export-Import Bank credits. Because of most urgent need Quito insists formalization credit agreement for long standing commitment to improve waterworks facilities. Considering circumstances believe it advisable to negotiate terms of agreement, conforming substantially to Guayaquil arrangements while we are here. Please advise if you approve. [Chase.]