834.00/6–1052: Telegram

The Secretary of State to the Embassy in Paraguay 1

confidential

177. In view conflicting views of internatl org advisers and their polit repercussions (urtel 350)2 Emb shld be especially careful not take any position re exchange rate system in discussion with Paraguayans. In accord regular practice US position will be made known by its rep in IMF. FYI only US has not yet formulated position it will take in Fund or re trade agreement and will not be able to do so until Paraguay submits specific proposal to IMF and US can appraise its implications.

However, Emb shld in its discretion inform Paraguayans that without prejudice to particular system they may decide adopt, use of an exchange tax or surcharge wld be violation of Paraguay’s Trade Agreement with the US.3 If, however, Paraguay has two or more explicit rates for imports without any taxes or surcharges, no violation of Agreement wld be involved. Emb shld make clear that this is mentioned as matter of info which might be of assistance in avoiding future problems re trade agreement.

Acheson
  1. Drafted and signed by Matilda L. Milne, Chief of the Exchange Rates Branch, Monetary Affairs Staff.
  2. In the referenced telegram, from Asunción, dated June 10, 1952, Chargé John C. Shillock, Jr. reported that recommendations made by an International Monetary Fund mission then in Paraguay with respect to revision of Paraguay’s exchange rate system were opposed by certain Paraguayan Government officials and the UN Technical Adviser for Paraguay, Richard Behrendt (834.00/6–1052).
  3. Apparent reference to the Reciprocal Trade Agreement, signed at Asunción, Sept. 12, 1946, and entered into force, Apr. 9, 1947; for text, see 61 Stat. (pt. 3) 2688.