Memorandum by Mr. George H. Owen of the Division of North and West Coast Affairs54


An application presented by the Government of Ecuador for a loan of $2,720,000 for the completion of the Quevedo–Manta Highway is now under consideration by the Board of the Export-Import Bank.

Mr. Chase of the Export-Import Bank indicated in a telephone conversation that the recent overthrow of the government of President Velasco will adversely affect the question of the approval of this application by the Bank.

The Board of the Export-Import Bank is to consider this matter on Wednesday, August 27. Mr. Stenger of ED is of the opinion that it is extremely unlikely that the Bank will approve the loan, in view of the recent showing of political instability in Ecuador. Mr. Stenger believes that if the Department is interested in the approval of the loan it is better to seek postponement of its consideration rather than risk rejection by the Bank at this time. Mr. Stenger will accordingly attempt to postpone final decision of the matter by the Export-Import Bank.55

  1. Addressed to Sheldon T. Mills of the Division of North and West Coast Affairs, and to Messrs. James H. Wright and Robert F. Woodward of the Office of American Republic Affairs.
  2. The following handwritten note appears in the margin: “Isn’t this a new doctrine? i.e. to condition action on a loan on whether or not a country refrains from revolutions. After all Mancheno has already announced he will abide by all Ecuadoran international commitments. Delay might be a good idea—in fact inevitable. But if the new regime is eventually recognized the highway’s merits should still be the basic criterion. S. T. M[ills].”