611.3331/49
The Chargé in Uruguay (Dominian) to the Secretary of State
[Received January 21.]
Sir: I have the honor to inform the Department that the Minister for Foreign Affairs1 told me today that the Uruguayan Minister in Washington2 had asked the Ministry for Foreign Affairs to supply him with information on the trade agreements already negotiated by Uruguay in order to have them available when commercial treaty negotiations between the United States and Uruguay would be initiated.
I suggested to the Minister for Foreign Affairs that the actual texts of the commercial conventions concluded by Uruguay during the latter half of 1934, whether private or official, be made available to Minister Richling.
Minister Arteaga stated that the general principle on which recent commercial conventions had been negotiated by Uruguay was the return of 60% of all exchange emanating from the foreign country with which a trade agreement was negotiated. This 60% was to include debt service as well as payments for imports by Uruguay. 10% was to be devoted to the thawing of frozen credits. The balance of 30% was to be reserved for such use as was deemed convenient by Uruguay. However, he stated that this 30% had been disposed of in varying manner, according to the requirements of each individual case. He stated that in the case of Belgium, Uruguay secured two-thirds of the 30% for its use. In the case of Great Britain, less than 10% was available for free disposal by Uruguay. With Germany, although reservations had been made for the use of the 30% in the manner deemed best by Uruguay, agreements had nevertheless been entered into between the two countries for the application of the 30% to certain old commercial indebtedness of Uruguay to German interests which included payments for telephone [Page 947] equipment bought from the Siemens Company. In the case of Sweden, the entire amount of 30% was available for the free use of Uruguay. As to Spain, although the formula of the distribution of percentages was the same as indicated above, nevertheless there was nothing available for use by Uruguay because of the large number of remittances made by Spaniards to their relatives in Spain.
Let me state confidentially here that the above may indicate that the “30% reserved by Uruguay, ostensibly for its own purposes, is perhaps a form of saving face for its negotiators and when public statements are made for home consumption by the Ministry for Foreign Affairs. The fact is that, as in the case of Germany and wherever old indebtedness exists, redemption is effected through the use of funds included within this 30%.
Respectfully yours,