422.11G93/1730
Memorandum of Conversation, by the Chief of the Division of Latin American Affairs (Duggan)
I had a further talk with the Ecuadoran Minister about the Guayaquil & Quito Railway matter. I informed the Minister that further information from our Legation at Quito indicated that the Ecuadoran Government has determined upon continuing bankruptcy proceedings at once, and inquired whether the Minister had any information in the premises. Captain Alfaro said he did not, but that he had requested specific information on this point in a letter which the President should have August 8. He said that in his letter he had requested a telegraphic reply and would inform the Department immediately upon its receipt of its nature.
I reiterated my belief that the Ecuadoran Government would probably wish to consider the advisability of taking action prior to consultation with the Bondholders Council, stating that I assumed the Government would wish to have the recommendation of the Council for any settlement it might offer to the bondholders, which might not be forthcoming if the Council were to be presented with a fait accompli in one important particular. Captain Alfaro understands this point of view, I believe, and said that he would communicate further with his Government.
In passing I mentioned that I would communicate to the Council the information that the Government proposes to send Señor Avilés, former Minister of Finance, to New York to discuss the matter. Captain Alfaro requested me to defer doing this until he received a reply to a further telegram he had sent inquiring as to when Señor Avilés might be expected. He said that there have been so many false starts that he would prefer that the Council not be advised until definitely assured that Señor Avilés is coming.