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  4. Document 694

833.6463/86

Memorandum of Agreement Initialed by the Under Secretary of State (Welles) and the Uruguayan Ambassador (Blanco)

I

1)
The Government of the United States is prepared to cooperate with the Government of Uruguay by providing all possible assistance reasonably consonant with the functions of Government to United States manufacturers to enable them to manufacture and export for the Rione project material consisting of one turbine and generator unit, one transmission line, and all other equipment necessary for their practical operation, within a period of two years from the date of the signature of the contract or contracts between the manufacturers and the Rione, necessarily subject, however, to the emergency needs of the national defense of the Government of the United States and of the other countries which are actually fighting aggression.
2)
The Government of the United States is prepared to give consideration through the Export-Import Bank to the extension of appropriate credit facilities for materials and services to be furnished by the United States manufacturers, in the event that such facilities should be desired by the Uruguayan Government.
3)
The United States Government is prepared to assign an appropriately qualified technical expert as a representative of this Government and particularly of the Export-Import Bank to facilitate the carrying out of the project.

II

In return for the assistance described under I;

1)
The Uruguayan Government agrees to remove the present German consortium from all connection with the project at the site of the project not later than the time of arrival at the Rincón del Bonete Dam of the first shipment of material to be supplied by the United States manufacturers and, in any event, not later than July 1, 1942. The Uruguayan Government further guarantees that under no circumstances will German and United States personnel work on the project at the same time except for preliminary engineering studies.
2)
With regard to the three remaining turbine and generator units and the second transmission line and other necessary related equipment, the Uruguayan Government agrees to grant to the United States manufacturers an option valid from June 1, 1942 to September 1, 1942 to agree to complete this additional work in the event the German consortium does not deliver in Uruguay prior to June 1, 1942 all of the machinery, equipment and supplies necessary for the total completion of the project. In this event, and in the event the United States manufacturers are disposed and are able to complete the entire project, the contract with the German consortium will be totally rescinded. If the United States manufacturers should not undertake to exercise this option, the Uruguayan Government will not permit any foreign group to engage in any construction in connection with the project at the site of the project until the United States manufactures have completed the installation of the first generating unit and transmission line.
S[umner] W[elles]
J[uan] C B[lanco]
Washington , April 21, 1942.