422.11G93/1039: Telegram

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

Department’s June 17, 4 p.m. and my June 28 [18], 9 a.m.38 Note of the Minister for Foreign Affairs dated June 30 in answer to my note, number 308 of June 3rd, was delivered to Legation last night.

The Minister says that the offer of his Government to pay the coupon due from the proceeds of the sale of cacao could not have referred to other than that part which would be due to the Government by reason of the duty on the 14,000 tons to be exported because the entire cargo was not the property of Ecuadorean Government, but of the commission merchant, Guayaquil, and that this duty actually amounted to 80,000 pounds more or less. He says that the error undoubtedly arose from the fact that in transmitting the Government’s instructions to Washington it was understood that Ecuador offered to pay eight hundred and some odd thousand dollars, when in fact Ecuador offered to pay that amount of sucres.

[Page 192]

Regarding ratification of promise to railway company to remit 80,000 pounds to London in June he says that:

“The Minister of Hacienda, to whom the promise mentioned refers, does not believe that he categorically promised to send 80,000 pounds to London before July 3 since, in view of the difficult situation of the public treasury, he would not be warranted in making so final and conclusive a promise. In connection with this matter the Minister of Hacienda stated to Mr. Dobbie, the manager of railway company, that he would do all in his power to remit the 80,000 pounds demanded. But whether or not these promises were made Your Excellency may rest assured that my Government would have remitted the value of the coupon if circumstances had not placed the public treasury in such a difficult situation. Due to causes which are foreign to Ecuador, such as the European war, the public revenues have suffered a shrinkage of 40 per cent and in this connection it may be stated that the state of truce existing since the signing of the armistice has not improved our situation and that on the other hand certain factors have tended to accentuate the shrinkage, already considerable, of public receipts. Notwithstanding this state of affairs my Government is doing, and will continue to do, its utmost to pay in the shortest possible time the 80,000 pounds and on account of which it has ordered the payment of 20,000 pounds. Not only because my Government desires to observe faithfully its agreements but also because it is vitally interested in increasing the financial credit of the country it has the most earnest wish to comply with its obligations but it is hoped that the powerful causes set forth will be taken into consideration and that Your Excellency, with the spirit of justice which distinguishes him, will condescend to esteem them in their full value.”

He states that the 10,500 pounds sent in early part of May were to apply on coupon due in July.

I am of the opinion that the Government is earnestly endeavoring to complete payment of this coupon as soon as possible.

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