822.796/377: Telegram

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

159. Your 193, July 29.55 Department has conferred with officials of the Post Office Department regarding the carrying of mail by Panagra at a rate equal to the present rate charged by Sedta. In concurring with the Department’s position in this matter the Post Office Department immediately discussed the question with Roig of [Page 280] Panagra58 with the result that they have authorized Panagra to put the reduction into effect whenever you consider it advisable to do so.

In this regard the Department has been requested by Roig to weigh the advisability of endeavoring to obtain on behalf of Panagra an exclusive mail contract which will extend for a period of 5 years and preclude the issuance of mail contracts to any other air carrier in Ecuador. In view of the unusual extent of this concession by Panagra and the possible financial risks involved therein the Department is inclined to feel that it would be equitable to make this proposal to the Ecuadoran Government. The 5–year period would, however, be without prejudice to the possibility of mail contract being taken over in meantime by a national Ecuadoran company if one is organized.

For your information a definite refusal by Ecuadoran Government to grant the exclusive 5-year concession mentioned would not cause Panagra to decline to carry the mail at the present Sedta rate.

Since the mail concession appears to be an important part of the general plan which Morgan59 contemplates presenting to the Ecuadoran Government under your direction will you please advise him upon his arrival of this development.

  1. Not printed.
  2. H. J. Roig, president of Pan American-Grace Airways.
  3. Stokeley Morgan, representative of the Defense Supplies Corporation, purchasing agency of the Reconstruction Finance Corporation operating under the Federal Loan Agency.