834.51/10–346: Telegram

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


434. I have purposely refrained from asking favorable consideration on political grounds of Paraguay’s request for one million dollar loan because I believe loan is fully justified on economic grounds.

However, I should like to call your attention to circumstance that in contrast to cooperation we gave this Government during the military [Page 1204] dictatorship, our attitude since political and individual freedoms have been restored in Paraguay has been negative.

This negative attitude is bound to confirm the skepticism of many political leaders here who feel that now the war is over and relations between US and Argentina are improved the US has no further interest in this little country.

This is not a situation helpful to our long term relations or to the achievement of whatever objectives we may have in the future in Paraguay.

Brazil’s attitude has paralleled ours. Her insistence on monopolizing air traffic between Rio and Asunción (following denial of textile exports) may have cost her all prestige and friendliness gained during last several years.

Our attitude as well as Brazil’s has already adversely affected the prestige of this Government and if persisted in will cause Paraguay to look once more toward Argentina for cooperation which will be given on Argentine terms.