422.11G93/1022: Telegram

The Chargé in Ecuador ( Belt ) to the Acting Secretary of State

Department’s April 2, 5 p.m. Conferred with Norton to-day prior to his departure tomorrow for the United States. It is his understanding Government has discontinued payment daily deposits for [Page 181] the reason Government had previously arranged with certain banks for assistance to meet payments on last coupon which was covered by remittance to London of 80000 pounds. Daily deposits no doubt now needed to refund to banks loans thus secured and to insure further assistance from them to enable Government to remit to London in June another 80000 pounds to meet coupon due next July; see my March 29, 2 p.m.

Government commission, which has been in consultation with railroad officials, have come to amicable conclusion and have covered many questions in dispute between railroad and Government. Norton states the arrangement as reached is extremely satisfactory. The commission will make its report to the next Congress; it will embody in its report a statement as to the advisability of handling future controversies by the commission with discussion between the interested parties and citing present friendly agreement as reached as an example of results accomplished.

The commission considered many questions namely improvement rolling stock, better service, improvement road bed, fuel, cost of operation, inspection by Government of accounts as to expenditures by railroad, reduction in expenditures where possible, reestablishment three passenger trains weekly, etc.

Norton claims agreement reached as final and the most satisfactory experience the railroad has yet had with commissions; no evidence of friction or prolonged discussion arose.

The result as arrived at will serve as a precedent for future controversies as indicative of the advisability and practicability of settlement in similar manner. This will avoid future legal proceedings against railroad in local courts with possible prejudice to railroad’s interests. I will forward by mail detailed report of commission’s findings.