811.20 Defense (M)/10165c: Telegram
The Secretary of State to the Ambassador in Ecuador (Long)
814. For Lowry from Rubber Reserve. The following is intended to give you our ideas as to the purpose and scope of development funds. The sooner useful projects can be developed and financed, the sooner we will get rubber.
In general development funds may be used for any purpose which will serve to procure more rubber.
- 1.
- The funds may be used for permanent improvements, such as construction of airports, roads, wharves, ship repair units, houses, drainage and health facilities, provided such projects contribute to the production of rubber, and, of course, further provided that such projects shall have been initiated or approved by the appropriate authorities of the governments concerned, to whatever extent the Rubber Agreement and local laws require.
- 2.
- The funds can be used to acquire and repair transportation equipment which will contribute to rubber production.
- 3.
- They can be used to facilitate distribution of supplies and movement of workers into the producing areas.
- 4.
- They can be used to make available medicines, foodstuffs and other supplies at less than cost to Rubber Reserve if advisable.
- 5.
- They can be used to equalize or defray freight and forwarding costs. For instance, if it is desired to stimulate production in the interior, you may use development funds to absorb freight charges either partially or wholly on supplies of rubber between the interior and the f.o.b. buying points.
- 6.
- You may use development funds to create more powerful incentives for the movement of additional labor into the rubber areas; to improve living and working conditions in producing areas with a view to retaining the laborers now there and increasing their productivity.
- 7.
- The criterion by which such expenditures should be judged is whether there is a reasonable expectation that they will result in giving us additional rubber.
- 8.
- We request that you explore, as promptly as possible, into the feasibility of initiating projects in addition to any which may already be under consideration, so that rubber will begin to flow to us in greater quantities at the earliest possible date.
It is emphasized that you are already authorized to commit up to $10,000 a single project without prior approval from here, but that as stated in our previous communications, if sums in excess of this amount are involved, such approval must be obtained. [Rubber Reserve.]