811.20 Defense (M)/9636: Telegram
The Ambassador in Ecuador (Long) to the Secretary of State
[Received October 15—3:11 a.m.]
842. For Collado99 and Cissel.1 The letter agreement with Rubber Reserve has been approved by the Corporation with no change except for slight revision in phraseology.
The letter agreement will be signed both in English and in Spanish, the Spanish being an accurate translation. Both texts in airmail but conditions indicate desirability of immediate approval by Rubber Reserve by cable which would authorize Lowry to sign both texts. Ecuadoran Government approves agreement. No further changes possible in either text.
Ecuadoran Government suggests and we concur that Rubber Reserve representative here be given full and immediate authority to approve projects under terms of letter agreement.
The full English text is as follows:
“In accordance with the terms of the agreement entered into on July 20, 1942, and ratified as a public contract on September 18, 1942,2 between the Government of the Republic of Ecuador and Rubber Reserve Company, Rubber Reserve Company agreed to establish a non-reimbursable development fund of $500,000, hereinafter called the fund, to be expended by the Rubber Reserve Company according to its judgment and taking into account the suggestions of the advisor of the Ecuadoran Government to encourage and increase the production and improve the quality of rubber produced in Ecuador [Page 413] and the methods of treatment thereof and to stimulate favorable conditions for maximum production.
As the result of subsequent discussions between your representatives and representatives of Rubber Reserve Company as to methods by which your organization might, to the greatest feasible extent, engage in activities designed to obtain the maximum production of rubber in Ecuador, Corporación Ecuatoriana de Fomento and Rubber Reserve Company have agreed as follows:
The fund of $500,000 referred to above shall be expended by Corporación de Fomento on projects designed to encourage and increase the production of existing natural rubber resources of Ecuador, to improve the quality of such rubber and the method of its treatment and to stimulate favorable conditions for its maximum production. Prior to undertaking any such projects, to be financed from the fund referred to above, Corporacíon Ecuatoriana de Fomento will submit such project to Rubber Reserve Company for its approval, and, upon such approval, Rubber Reserve Company will transfer to Corporación Ecuatoriana de Fomento such part of the fund as is required to carry out such project. Corporación Ecuatoriana de Fomento shall render to Rubber Reserve a monthly statement of expenditures made by it from the amounts so transferred.
In addition to the projects to be undertaken by and through the Ecuadoran Development Corporation as contemplated above both Rubber Reserve Company and the Ecuadoran Development Corporation intend to initiate and continue additional projects for the purpose of obtaining the maximum development of existing natural rubber resources of Ecuador and Rubber Reserve will from time to time make expenditures in addition to the fund above mentioned as appear to it desirable to effectuate such purpose.
This agreement shall become effective upon the approval of the Government of the Republic of Ecuador which approval shall include the consent by the Government of the Republic of Ecuador to the transfers from the funds under the conditions mentioned above, as performance of the obligations of Rubber Reserve Company with respect to the development fund provided for under clause 6 of the agreement of July 20, 1942, to the extent of the amounts transferred by Rubber Reserve Company.
If the foregoing is in accordance with your understanding of the agreement between Corporación Ecuatoriana de Fomento and Rubber Reserve Company, kindly indicate that fact by signing the enclosed copy of this letter in the space provided for that purpose and return it to the undersigned.”
The approval reads as follows:
“The Government of the Republic of Ecuador hereby approves the foregoing agreement between Corporación Ecuatoriana de Fomento and Rubber Reserve Company, and hereby consents to the transfers from the funds referred to therein as constituting, to the extent of the amounts so transferred, full performance by Rubber Reserve Company of its obligations with respect to the development fund provided for under clause 6 of the aforesaid agreement of July 20, 1942.”