740.34112 RP/1–1746

The Chargé in Paraguay ( Reed ) to the Secretary of State

No. 1405

Sir: I have the honor to inform the Department of the progress that has been made toward the completion of the replacement program in Paraguay since the submission of this Embassy’s restricted despatch no. 1310 of December 1, 194522

. . . . . . . . . . . . . .

The Banco del Paraguay is the interventor of those interests placed under intervention and the administrator and liquidator of those interests whose liquidation has been decreed. The Bank has not accepted an interpretation of existing legislation which would give it the duty of fully carrying out measures outlined in basic legislation for the control of enemy interests. Although Art. 10 of decree no. 8479 of April 28, 1945 states that the Banco del Paraguay is empowered to comply with the recommendations adopted at the Interamerican Conference on the Systems of Economic and Financial Control held in Washington in 1942,23 the Bank’s opinion is that because that decree is only regulatory to the basic legislation, Decree Law no. 7867 of March 23, 1945, the regulating decree can not modify the original legislation which gave the Banco del Paraguay only limited powers [Page 1194] in the program. The Liquidating Commission, appointed by Decree 10,696 of October 29, 1945, can act only within the powers given it by the Banco del Paraguay. The result is that nobody has accepted the duty of giving full implementation to Paraguayan legislation for the control of Axis assets. The matter is still being discussed by this Embassy with the Paraguayan Government officials and it is hoped that a definite decision in the matter can be reached in the near future.

In accordance with Decree no. 11, 138 of December 3, 1945, the resignation of Pablo E. Bergemann, the representative of the Ministry of Finance on the Liquidating Commission, was accepted and Dr. Maximo Duarte Bordón was named as his replacement. A copy of Decree no. 11, 138 is attached hereto.25


Leslie E. Reed
  1. Not printed.
  2. For recommendations of the Conference, see Pan American Union, Congress and Conference Series No. 39: Final Act of the Inter-American Conference on Systems of Economic and Financial Control (Washington, 1942); for documentation, see Foreign Relations, 1942, vol. v, pp. 58 ff.
  3. Not printed.