822.50/290: Telegram
The Acting Secretary of State to the Ambassador in Ecuador (Scotten)
796. For Mersereau from Pierson. Refer your telegram No. 908 October 15. Pending a full understanding present situation it is impossible to reach any decision. Believe it would be impractical to attempt solution prior to your return to Washington which should be as soon as conveniently possible.… You may inform Ecuadorans that suggestion that authority be divided between two co-managers has not [Page 303] been favorably received in Washington and that both Eximbank and State Department firmly convinced that such plan is infeasible. Without formal presentation to Ecuadorans be prepared upon return to give us your views upon which of the following two plans might be acceptable to Ecuadorans. 1. Eximbank would consider making corporation wholly Ecuadoran entity although in such case Eximbank would desire employment of (a) Kinnear or other qualified technician as Agricultural Consultant, (b) qualified engineer to act as Consulting Engineer and (c) qualified Comptroller. As in other instances Eximbank would retain right of final approval on all projects submitted. Eximbank would have no objection to having one or more Americans on Board of Directors in such case. 2. Complete dissolution of corporation and transfer of balance of credit to government to finance projects to be passed on by jointly chosen Consulting Engineer and approved by Eximbank. Either of foregoing alternatives would involve closer scrutiny of projects and probable curtailment of types of projects acceptable to Eximbank. [Pierson.]