740.34112 RP/4–2646

The Ambassador in Paraguay (Beaulac) to the Secretary of State

No. 1663

Sir: I have the honor to inform the Department of the progress of the replacement program in Paraguay since the submission of Embassy restricted despatch no. 1524 of March 12, 1946, “Progress Toward Accomplishment of Proclaimed List Objectives”.

Developments since the submission of that report indicate that the liquidation of Axis spearhead firms,28 in Paraguay will be completed by the end of May or the middle of June if the Axis commercial houses taken possession of by the Paraguayan government are successfully disposed of at public auctions which are to be held in May and early June.

The government-owned Banco del Paraguay was delegated in Paraguay’s basic legislation in the matter to carry out the replacement program. The Department will recall that on several occasions the Embassy has referred to the fact that the apparent reluctance of the bank to perform the duties assigned it has continuously retarded execution of the program. On March 14, after submission of despatch no 1524 referred to above, the Embassy officer in charge of that program discussed it with Dr. Pedretti, the president of the bank. Dr. Pedretti was told that the Embassy was concerned over the fact that so little progress was being made in its execution and was asked if there was any way in which the Embassy could be of assistance to the bank in the work. Dr. Pedretti stated emphatically that the Ministry of Finance is to blame for all delays that have taken place in carrying out the program.29

He reviewed each case on which the government has initiated action and finally stated that for the first time he realized that the bank was responsible for many of the delays that had occurred and that its failure to act in other matters had delayed further execution of the program. [Page 1197] He instructed one of the bank’s two attorneys to devote his entire time to the program until its completion and to work with the Secretary General of the Ministry of Finance in its execution. Because the bank has renewed its activities it has been possible to make further progress in the program, and several important pieces of legislation in connection with it have since been enacted.

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

Respectfully yours,

Willard L. Beaulac
  1. A footnote in the original at this point indicates that no action had been taken against the Sociedad Industrial para Artículos General.
  2. A footnote in the original at this point refers to strained relations between the Banco del Paraguay and the Ministry of Finance.