Memorandum of Conversation, by the Secretary of State


Subject: Appeal for Funds to support General Development Program in Paraguay

Participants: Dr. don Juan Felix Morales—Paraguayan Ambassador
Rear Admiral Ramon E. Martino—Paraguayan Minister of Defense Secretary
Marshall Mr. Tewksbury—RPA

It was expected that the newly appointed Paraguayan Ambassador and the Minister of National Defense, who reportedly was in Washington on an unofficial trip, planned only to make a courtesy call. After the Ambassador said a few words, Admiral Martino launched into a long statement of Paraguayan needs and pointed out that he had been requested by his Government to set forth these to me.

He explained in considerable detail that Paraguay has been a backward country and now wished to embark on a general development program. His general appeal was for funds to support the following projects:

Agricultural development, for which machinery and equipment was needed.
A general highway program, for which highway equipment was needed,
A development of the National Merchant Marine.
Construction of a railroad from Concepcion to the Brazilian border, connecting with the Brazilian railroad to Sao Paulo and Santos.
Assistance in the development of basic industries and those for the processing of locally produced raw materials.
Aviation equipment, both for military and commercial use.
Tanks and armoured cars for use in training the Paraguayan Army.
Miscellaneous military equipment.

[Page 701]

Admiral Martino went on to say that Paraguay was prepared to cooperate with the United States in the location and construction of a modern airport which could be used jointly by the United States and Paraguay for hemisphere defense in the event of another world conflict. He indicated that this airport could also be used for commercial purposes in times of peace and stated that Paraguay was prepared to work with technical experts from the United States in the location and construction of the airport.

After the statement of Paraguay’s needs, I raised questions regarding Admiral Martino’s statements concerning Paraguay’s Merchant Marine, particularly with reference to such arrangements as have been made or are contemplated with Argentina. Similarly, I inquired as to conditions concerning the traffic and equipment to be used on the Paraguayan-Brazilian railroad and concerning freight rates, etc. While these problems are vital to the solution of Paraguay’s transportation problems, Admiral Martino gave the impression that their solution offered no serious difficulty.

Just as he left, Admiral Martino suggested that it might be well for the Ambassador to prepare a memorandum of Paraguay’s pending programs and needs “in order that I could have them for consideration prior to the visit of the President-elect of Paraguay to the United States”.

George C. Marshall