422.11G93/1737

The Minister in Ecuador ( Gonzalez ) to the Secretary of State

No. 514

Sir: With reference to my despatch No. 473 of August 4, 1936, transmitting a copy of my note to the Foreign Office which embodies the message of the Foreign Bondholders Protective Council suggesting that the Government of Ecuador designate someone in the United States with whom the Council might carry on negotiations, I have the honor to report that in view of the statement made by the President to the British Minister to the effect that Mr. Avilés would proceed to London via New York, but that he would not negotiate with the American bondholders, I deemed it desirable to endeavor to remove, if possible, any limitation as to authority or intention with respect to discussions with the American bondholders.

This afternoon in a conversation with the Foreign Minister in connection with the Department’s telegram No. 30 of September 1, 2 p.m., 1936,91 the opportunity was afforded me to refer to the fact that Mr. Avilés had presented at the Legation for legalization the authorization of the President conferring authority upon him to negotiate with the bondholders in the United States as well as in England. I suggested to General Chiriboga that in view of this authority it would now seem possible to reply to the Legation’s note on this point so that it, in turn, could inform the Foreign Bondholders Protective Council of the forthcoming visit to New York of Mr. Avilés. The Foreign Minister replied that the note under reference had been transmitted to the respective Ministry, but in view of this recent action by the President he thought that a reply could now be made. He added that he would take up the matter immediately with the President.

While the written authorization of the President to Mr. Avilés (see enclosure No. 4 of my despatch No. 51391) contemplates negotiations with the American as well as the British bondholders, it is quite evident from the British Minister’s conversation with the President that Mr. Avilés intends to conduct his negotiations only with the British [Page 556] Council. Under the circumstances I consider that a favorable reply at this time to the Legation’s note should serve to prevent an embarrassing situation. This is the purpose I had in mind when I suggested to the Foreign Minister that, in view of the authorization granted to Mr. Avilés, his Government might now be prepared to reply.

Respectfully yours,

For the Minister:
Edwakd J. Sparks

Secretary of Legation
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