611.2231/477
Memorandum of Conversation, by Mr. John F. Melby of the Division of the American Republics
| Participants: | Vicente Illingworth, Ecuadoran Minister of Finance |
| The Ambassador of Ecuador | |
| TA10—Mr. Smith | |
| RA11—Mr. Melby |
The Minister of Finance explained the desire of his Government either to reach a gentleman’s agreement on the trade agreement or, if that weren’t possible, to modify the terms of the agreement in order to provide greater revenues for the Government of Ecuador. Customs revenues have been declining during the past two years due to the influence of the war and an increase is now needed in order to provide services and interest on the proposed loan for the Guayaquil and Quito waterworks.
Mr. Smith gave it as his preliminary opinion that some arrangement could be reached which would allow an increase in Ecuadoran revenues without actual modification of the treaty. If further study, however, proves this impossible, he expressed the belief that the Department would be willing to make some suitable modification in conformance with Ecuadoran desires and at the same time preserve the spirit of the agreement.
The Minister explained that Ecuador is denouncing all of its commercial agreements with the exception of the one with the United States and an agreement which is now in process of negotiation with Chile. This fact, he felt, entitles Ecuador to special treatment by the United States which will be in a peculiarly favored position.
Conversations will be continued on the basis of more detailed studies.