556. Memorandum of a Conversation, Casa de Gobierno, Montevideo, August 12, 19571


  • Political Factors in Uruguay: Countervailing Duties; Air Force Mission Agreement Extension; Crossties Case


  • His Excellency, Arturo Lezama, President of the National Council of Government of Uruguay
  • The Honorable Roy R. Rubottom, Jr., Assistant Secretary of State for Inter American Affairs

The Honorable Jefferson Patterson, American Ambassador James Espy, Esquire, Counselor of Embassy

At 5:00 this afternoon the Assistant Secretary of State, R. R. Rubottom, Jr.,2 accompanied by Ambassador Patterson and Mr. Espy, was received in a formal call by President Arturo Lezama of the National Council of Government of Uruguay. Following the expression of amenities, Mr. Rubottom thanked the President for the very kind invitation to him to visit Uruguay. He was deeply appreciative of this opportunity to come here. President Lezama expressed his [Page 1111] admiration for the United States and spoke of the “unbreakable” esteem and friendliness which Uruguay entertains for the United States as the leader of the free world and defender of democratic ideals and principles.

Mr. Rubottom, in taking up the conversation, stated that as Assistant Secretary he tried to hold himself above questions of detail, so to speak looking down from a wide perspective upon relations between the United States and the Latin American countries. Thereby he hoped to be of greatest usefulness. Occasionally when necessary, however, he did interest himself directly in individual problems. He said that as he saw it from this perspective, there were only, in the vast field of close relations and friendly association that connected the family of American nations, a few small problems in the relations between the United States and Uruguay. He went on to say that he and the other officers of the Department of State were giving a great deal of attention to these problems, so much so that he had appointed, some eight months ago, a team of three experts to devote their time to studying means to solve these problems.3

Mr. Rubottom then stated that there was recognized in the Department of State the importance to Uruguay of the question of the countervailing duties on importation into our country of Uruguayan wool tops. This subject was being thoroughly studied and he wished to assure the President that everything possible was being done to remove the issue. During the last three months, a thorough examination has been made of the factors involved and it is hoped soon that the Department of State can approach the Department of the Treasury for action. Mr. Rubottom noted that the duties had already been reduced from 18 per cent to 6 per cent and he mentioned that originally the imposition of the duties was justified. However, the situation may have changed and possibly now something further could be done.

President Lezama expressed deep appreciation for this information and then discussed at some length the resentment and psychological effect that the imposition of the countervailing duties had created in Uruguay. He concluded that this may have been a small [Page 1112] matter for the United States but for a small country like Uruguay it loomed very large.

President Lezama then ventured the statement that there were several questions which he had recently discussed with Ambassador Patterson. He alluded to their last meeting on June 28.4 One of the points brought up was the question of the extension of the Air Force Mission Agreement.5 He said that this was complicated by the fact that it was necessary for the Executive Power to submit an entirely new bill to the Uruguayan Congress for approval to enable the NCG to renew the Agreement. Such a project bill was now being prepared. The President expressed evident concern that the matter should have apparently been allowed to drift by the authorities who should have pushed it and stated that he would make it a personal interest.

The second problem concerned the terminated crossties contract. President Lezama stated that the majority of the National Council of Government had been in favor of doing something about this unsatisfactory situation and that they had held, since his conversation with Ambassador Patterson, three meetings with AFE. It was a legal question, however, and under Uruguayan laws the Government could not intervene. AFE was an autonomous entity and the Government could not tell it what to do. In turn, AFE’s position was that it had twice extended the time for submission of a guarantee or bond for execution of the contract which the supplier of the cross-ties had on each occasion failed to meet. The guarantee was finally deposited in the United States the day after the final expiration of the time limit. This ended the matter as far as AFE was concerned. Besides, its contract was not with the American company itself but with a Uruguayan concern (Sociedad Reg) and there was also another intermediary in the United States. Mr. Rubottom said that he was so aware and that the name of the other intermediary was the New World Hardwood Company.

When queried on the possibility of arbitration, President Lezama said that this had been mentioned to AFE. It replied, however, that there was no one with whom it could arbitrate since it did not know the American supplier legally as it had no contract or relation with him.

Mr. Rubottom stated that he understood but that, nevertheless, there remained the question of equity. An American company was the innocent victim. It was natural that this should arouse a strong [Page 1113] feeling of support on the part of political representatives in our country in the injured’s behalf. He said that he was confident that President Lezama would understand the insistence of these American legislators in this matter. For his, Mr. Rubottom’s part, he hoped that his hands would not be tied in dealing with our relations with Uruguay.

Mr. Rubottom then suggested that possibly some sort of agreement or accord could be reached between the two governments which would provide for Uruguay’s taking up the ties in question along with the purchase of other needed ones. He said that he thought that we should place all the cards on the table for everyone to see. President Lezama indicated a favorable reaction to this idea and stated that he thought it should be seriously considered but added that nevertheless AFE would have to be a party to the agreement. He repeated that the government could not impose its will on AFE as it also could not do on any other independent autonomous entity such as, for instance, the Tribunál de Cuentas, the organ that approved expenditures of government funds.

The conversation ended here and Mr. Rubottom then proceeded to one of the adjoining rooms in the Casa de Gobierno to call upon National Councilors Luis Batlle Berres and Alberto F. Zubiría.

  1. Source: Department of State, ARA Files: Lot 59 D 376, Uruguay 1957. Confidential. Drafted by Espy. Sent to the Department of State in despatch 143 from Montevideo, August 20. (Ibid., Central Files, 110.15–RU/8–2057)
  2. Rubottom stopped in Uruguay while en route to the Buenos Aires Economic Conference, August 15–September 4.
  3. The team included Livingston D. Watrous; Albert Post, Assistant Financial Adviser in the Office of Inter-American Regional Economic Affairs; and John T. Fishburn. They drew up five lengthy memoranda: “Uruguayan Labor,” June 27, by Fishburn; “Uruguay, Economic and Financial Conditions and Prospects”, July 26, by Post; and three memoranda by Watrous, “Communism in Uruguay,” June 17, “Uruguayan Political Situation,” June 18, and “Issues between Uruguay and the United States,” June 21, supra . (Department of State, ARA Files: Lot 59 D 376, Uruguay Study)
  4. The memorandum of their conversation was sent to the Department in despatch 10 from Montevideo, July 2. (Ibid., Central Files, 733.58/7–257)
  5. The status of the agreement was uncertain because of problems concerning the funding of compensation for Mission officers. Documentation relating to this matter is Ibid., 733.58 for 1955 through 1957.