Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

611.22/12–1054

Memorandum of Conversation, by Byron E. Blankinship of the Office of South American Affairs

official use only

[Washington,] December 16, 1954.

Subject:

• Review of Pending Ecuadoran-U.S. Problems

1. Peru-Ecuadoran Relations

2. Eximbank Loan Applications

3. Shipping Discrimination

4. Maritime Zone Claims

5. Guatemalan Refugees

• Participants: Ambassador Chiriboga, Embassy of Ecuador
• Ambassador Edward J. Sparks, ARA
• Mr. Byron E. Blankinship, OSA

1. Peru-Ecuadoran Relations

Ambassador Chiriboga bitterly complained about Peru’s aggressiveness toward Ecuador. He alleged that huge Peruvian arms purchases had forced Ecuador into an arms race which was interfering with needed economic developments, unsettling Ecuadoran finances and lowering the standard of living. He said that no incidents had occurred for about three months but that a dangerous situation existed.

2. Eximbank Loan Applications

The Ecuadoran Ambassador said that a year ago after much frustration Ecuador had finally succeeded in obtaining two loans from the Export Import Bank for airport and road construction but that neither was adequate. He said that Ecuador would apply to the Eximbank for three additional loans as follows: one for about $800,000 to construct terminal buildings for the airports at Quito and Guayaquil and a second for construction of a hotel at Quito for the 11th Inter-American Conference¹ and tourists. He said that three or four months ago General Edgerton told him the Bank would not back hotel construction but that this position may have changed since the Rio Conference. Chiriboga said that Ecuador could not understand this attitude since the Bank had advanced money for the construction of hotels at Panama, Bogota and Caracas. He said that his Government hoped to obtain collaboration of the Hilton Hotels for this $4 million project. Ambassador Sparks replied that this was an Eximbank matter but Ecuador doubtlessly would at least have to prove the economic soundness of the hotel. Finally, Ambassador Chiriboga said that Ecuador needed $2 million to complete the Quevedo–Manta Highway. He concluded that he hoped that the Department would support these applications since his Government had little hope of obtaining them without such support.

3. Shipping Discrimination²

Chiriboga declared that the shipping discrimination question was the most serious existing between the U.S. and Ecuador. He explained that he hoped to eliminate discrimination if American ships agreed to go up the Guayas River to Guayaquil. He acknowledged that his Government had not accepted his recommendation to abolish discriminatory consular fees upon agreement of the Grace Line ships to go to Guayaquil but he thought it could be persuaded to do so.³ Ambassador Sparks commented that he knew American ships had suffered severe damage to their hulls from dragging over the Guayas sand bars. Ambassador Chiriboga protested that Ambassador Mills’ recent note had worsened matters as his Government objected to its strong terms, particularly the use of the word “gross” discrimination and to “the threat of retaliation”. Ambassador Sparks inquired as to the nature of the note. Mr. Blankinship explained that Mr. Mills dispatched the note to the Foreign Office upon carefully cleared instructions from the Department. He further stated that the Foreign Minister’s allegation that the problem should have been discussed before dispatching the note, seemed tenuous since the discrimination had been a matter of years of fruitless discussion. Therefore, the time seemed to have come for somewhat more forcefully showing the Ecuadoran Government the seriousness with which the U.S. Government regarded the discrimination.

4. Maritime Zone Claims

Ambassador Sparks stressed the gravity with which the U.S. regarded the Ecuadoran claim to 200 miles seaward. Ambassador Chiriboga explained that his Government had great hopes for the 1955 Inter-American Conference on Maritime Claims. He said that Ecuador enjoyed much company. He referred to claims of Peru, Chile and to the item in this morning’s New York Times outlining extensive territorial claims of Iceland. He claimed that he had strongly recommended to his Government that it grant fishing licenses by radio and abide by the agreement reached at Quito with the U.S. on fisheries problems. He said that he strongly disagrees with Minister of Economy Nebot that implementation of the Quito agreement should await the arrival of patrol boats from Germany.

5. Guatemalan Refugees

The Ambassador arose to leave, but before departing he confided that he wished unofficially to mention a report from a friend who had received it from the American Embassy in Quito to the effect that Guatemalan refugees were plotting in Ecuador. He said that as a strong anti-communist he wished to be informed of any such activities so that he could help counteract them. He said that he was speaking personally without instructions. He mentioned that some weeks ago Mr. Woodward raised the question of Ecuadoran recognition of the Castillo-Armas regime. He said that Ecuador was consulting Uruguay with a view to arranging joint recognition of the Guatemalan Government. Ambassador Sparks instructed Mr. Blankinship to obtain any information possible about subversive activities of Guatemalan refugees in Ecuador.

1. Scheduled to convene at Quito, Ecuador, in 1959.
2. Documents pertaining to this subject are contained principally in file 822.245.
3. In a briefing memorandum prepared for Deputy Assistant Secretary Sparks, dated Dec. 15, 1954, Mr. Blankinship stated that the Department was currently attempting to obtain agreement from Grace Lines to cooperate in a joint United States–Ecuador committee to determine whether or not the company’s ships could navigate up the Guayas River to Guayaquil without damage to their hulls (611.22/12–1554).