422.11G93/1026: Telegram

The Acting Secretary of State to the Minister in Ecuador (Hartman)

Your March 11, 3 p.m.25

Department cannot understand insinuation of Foreign Office that Ecuadoran Minister was not fully authorized to make the offer of payment from the sale of Cacao. The Department’s instruction No. 206 of December 6, 1918,26 quoted in part the Ecuadoran Minister’s note to the Department of August 21, 1918,27 and a copy of this note and the Department’s answer thereto28 were enclosed and you were instructed to give the Minister for Foreign Affairs copies of both notes. The negotiations referred to in these notes had been begun by the Ecuadoran Minister in a memorandum [Page 188] to the Department dated August 21, 1918, in which he stated that the Government of Ecuador proposed that it be permitted to export to the United States all Cacao actually stored in Ecuador, about 14,000 tons and that the price of sale, $859,740, be in service of the interest on the bonds of the Guayaquil and Quito Railway Company. Permission to import this Cacao was granted by the appropriate American authorities and in a note to the Ecuadoran Minister dated January 10 last,29 the Department informed him of the sale of the entire 14,000 tons. Moreover, in a note to the Department dated December 12,30 the Minister stated that he had received a telegram from his Government which maintained its promise to pay the above mentioned amount ($859,740) and in a note dated January 9,31 the Minister said that his Government has maintained and maintains its promise to pay the sum of $859,740 from the proceeds of the sale of the 14,000 tons.

In your February 3, 6 p.m.,32 you stated that 80,000 pounds had been remitted to London in payment of the bonded indebtedness of the railway [and?] in your May 9, noon, you stated that 10,500 pounds had been paid. Inform Department whether this payment was made toward the completion of the amount of $859,740 or whether this was an advanced payment on the July coupon.

In any event, it appears that the government of Ecuador has not paid the full $859,740 which it is clearly bound to pay.

Your March 29, 2 p.m.33 You are requested to inform the Ecuadoran Government of the substance of the foregoing, stating at the same time that this Government is not inclined at this time, to press its clear claim provided the Ecuadoran Government will confirm to you its recent statement to the Railway Company that it will remit to London the additional sum of 80,000 pounds sterling during the month of June, in order to meet payment on coupon due next July, and provided this amount is paid in June. You will phrase your note to the Foreign Office with particular courtesy in order that the good relations apparently now existing between the Government and the Railway Company may not be interrupted and you will ask for an assurance of a June payment and cable the Department the Government’s reply.

Your May 7, 3 p.m. Department does not deem it advisable to bring pressure to bear on Ecuadoran Government to resume payment of daily deposits at this time.