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  4. Document 414

822.51/993a

The Department of State to the Ecuadoran Embassy 51

Memorandum

The status of measures of cooperation which have been agreed upon between the Governments of Ecuador and the United States is as follows:

program agreed upon at rio de janeiro

1)
It was agreed that the Export-Import Bank would loan funds to finance the construction of water works and other municipal improvements for the cities of Guayaquil and Quito, up to a total sum of $8,000,000, subject to the submission of suitable plans and specifications and subject to the availability of the materials and equipment which it might be necessary to obtain in the United States. An engineer assigned by the Export-Import Bank for the preparation of preliminary plans and recommendations has now finished his work in Ecuador and is expected to submit his recommendations to the Export-Import Bank within a few days, so that steps may be taken immediately to determine the availability of necessary materials upon the basis of the recommended plans.
2)
It was agreed that the Export-Import Bank would extend initial credits up to $5,000,000 for the development in Ecuador of agricultural, [Page 388] mining, and other industries and in the construction of adequate means of transportation, such developments to be carried out under the general supervision of an Ecuadoran Development Corporation to be created by the Government of Ecuador. All of the pertinent documents relating to the formation of the Corporation were submitted to the Ecuadoran Government in April 1942 and it is understood that on June 4, 1942 the decree authorizing the Corporation was issued. The loan agreement between the Corporation and the Export-Import Bank can now be concluded without further delay.52
3)
It was agreed that the Government of the United States would enter into a monetary arrangement involving an amount not exceeding $5,000,000 in order to aid in the stabilization of the Ecuadoran currency, such funds to be provided upon mutually satisfactory terms and conditions. This agreement was implemented by the signature of a contract with the Treasury Department of the Government of the United States by the authorized representative of the Government of Ecuador on February 27, 1942.
4)
It was agreed that $2,000,000 would be granted by the Government of the United States through the Office of the Coordinator of Inter-American Affairs towards a cooperative program of health and sanitation in Ecuador. In the implementation of this health and sanitation program, contracts for almost the entire amount have already been concluded for the carrying out of health and sanitation developments in Quito and Guayaquil.

program for the rehabilitation of the province of el oro

5)
The Government of the United States agreed in February 1942 to make a grant for relief and rehabilitation in the Province of El Oro. The group of experts that was sent to the Province of El Oro by this Government to determine, in cooperation with the Ecuadoran authorities, the measures and expenditures that would be required for the rehabilitation work, has now returned to the United States and submitted its report. Arrangements have been made tentatively for the carrying out of this rehabilitation work under the supervision of the Ecuadoran Development Corporation, and now that the Corporation has been legally established by the Ecuadoran Government, this Government will assist immediately in the prompt carrying out of rehabilitation measures by the assignment of expert personnel for this purpose to work under the supervision of the Ecuadoran Development Corporation.
The group of experts of the Government of the United States which recently conducted an investigation in El Oro to assist in determining the measures that would be required for the rehabilitation work, was authorized to make immediate expenditures for particularly urgent relief work, and this authorization was utilized for the purpose of buying quantities of foodstuffs, tools and other necessities of life valued at approximately $20,000 which were found to be urgently required in the El Oro area. It is felt that these expenditures were an important contribution to the efforts of the Ecuadoran Government to restore normal conditions in the Province.

other arrangements for cooperation of an economic nature (including health and sanitation)

6)
Discussions are now in progress concerning an agreement between the Governments of Ecuador and the United States with respect to the exportation to the United States of Ecuadoran rubber,53 and the conclusion of this agreement is regarded as an integral part of the program of cooperation between the two countries. The offers of the Government of the United States include the provision of an independent fund for necessary expenditures in connection with the increased exports of rubber from Ecuador.
7)
It is understood that the highway construction work at present being carried out in Ecuador by the Ambursen Engineering Corporation with $900,000 in credits extended to the Government of Ecuador by the Export-Import Bank, is at present progressing satisfactorily.
8)
It is understood that a large proportion of the $200,000 in credits which the Export-Import Bank agreed to extend to the Ecuadoran Government for the purchase of railway equipment has been committed for specific expenditures and that a considerable part of the $200,000 has actually been expended.
9)
It is understood that work is progressing satisfactorily, under the supervision of an expert formerly in the employ of the Government of the United States, in the program of cacao rehabilitation and agricultural experimentation which is being carried out with the credit of $50,000 which the Export-Import Bank agreed to extend to the Government of Ecuador for this purpose.
10)
Representatives of the Government of the United States are at present studying the practicability of undertaking expenditures for improved health and sanitation in the Salinas area,54 which expenditures would supplement the grant of $2,000,000 for health and sanitation in Quito and Guayaquil.
11)
The Government of the United States assisted the Government of Ecuador in obtaining the services of a qualified expert to advise the Ecuadoran Ministry of Finance, and this expert has recently been relieved by another expert of similar qualifications.55
12)
Arrangements are being made for the detail to Ecuador by the Government of the United States of a group of experts to assist in increasing the exportation of Ecuadoran balsa wood to the United States and the United Kingdom.
13)
An Economic Resources Mission of the Government of the United States is now completing a survey in Ecuador which will be used by the Ecuadoran Development Corporation in the consideration of specific projects for agricultural and related developments.

military and naval cooperation

14)
A United States Military Aviation Mission is at present serving in Ecuador to give advice and assistance to the Ecuadoran Army in aviation matters.
15)
Arrangements have been made by the Government of the United States to assist the Government of Ecuador in the establishment of aviation training schools at Quito and Salinas, respectively, and funds have already been allotted for this purpose by the Government of the United States.
16)
Four training airplanes were recently delivered to Ecuador for operation under the direction of the United States Military Mission for the training of Ecuadoran pilots.
17)
A United States Naval Mission is at present serving in Ecuador to provide advice and assistance to the Ecuadoran Navy.
18)
The United States Naval Mission to Ecuador is at present assisting with arrangements for the establishment of an Ecuadoran Naval Training School at Salinas.
19)
A radio goniometer is being operated in Ecuador for the detection of clandestine radio stations, with the assistance of the United States Naval Mission.
20)
The armed forces of the United States are assisting in the establishment of a Cooperative Hemisphere Defense Area at Salinas.
21)
The United States Navy is providing assistance in preliminary construction work with a view to the establishment of a cooperative defense area in the Galápagos Islands.
22)
A Lend-Lease Agreement has been concluded between the Governments of the United States and Ecuador for the transfer to the Ecuadoran Government, on very advantageous terms, of matériel up to a total value of $17,000,000.
23)
The United States Navy has partially completed a hydrographic survey of the Ecuadoran coast and off-lying islands, but it has been considered advisable to postpone completion of the survey until after the war in view of the need for all naval vessels for war purposes. The aerial photography of the Ecuadoran coast and offlying islands in connection with the hydrographic survey was almost entirely completed, and it is expected that the photographs of the coast in the Ecuador–Peru boundary area may be of considerable use in the work of the Ecuador–Peru Demarcation Commission.

cooperation in civil aviation

24)
The Governments of Ecuador and the United States have recently cooperated in the reorganization of commercial airlines in Ecuador and an improved service is now being provided between Quito, Cuenca, Loja, Guayaquil, Salinas, Manta and Esmeraldas.
25)
The Government of the United States has in recent months assisted in making arrangements for a large increase in the international commercial aviation services connecting Ecuador with neighboring countries and with the United States.
26)
Under the Inter-American Aviation Training Program, 29 students have been brought to the United States from Ecuador for training as pilots, engineers, instructor-mechanics, and airplane service mechanics.

With respect to recent suggestions that have been received from the Ecuadoran Ambassador at Washington concerning new cooperative arrangements which might be entered into by the Governments of Ecuador and the United States, the following comments are made:

1)
It is believed that the proposal for the construction of a railway between Sibambe and Cuenca is the type of project which the Ecuadoran Development Corporation is qualified to study with a view to making appropriate recommendations.
2)
The appropriate agencies of the Government of the United States would be glad to give every consideration to the possibility of making arrangements for the construction of military barracks in Ecuador with reasonable amounts of the funds allocated for lend-lease expenditures on behalf of the Government of Ecuador in the event the Ecuadoran Government should wish to provide specific information concerning the nature, location, and use of such barracks, the amounts of funds which would be required for their construction and the quantities of materials which it might be necessary to import into Ecuador for such construction.

Washington , June 9, 1942.
  1. Handed to the Ecuadoran Ambassador on June 9, 1942, by the Chief of the Division of the American Republics (Bonsal).↩
  2. The final draft was transmitted to the Department by the Ambassador in Ecuador in his despatch No. 3343, August 2, 1942; it provided that the Export-Import Bank establish a line of credit of $5,000,000 for public works and agricultural and development projects, repayable in 12 years in 20 installments with interest at 4 percent.↩
  3. See pp. 396 ff.↩
  4. For correspondence on the interest of the United States in this area as a defense site, see pp. 362 ff.↩
  5. Joseph B. Friedman succeeded Harold D. Glasser.↩