470. Letter From the Director of the Office of International Financial and Development Affairs (Corbett) to the Secretary of the National Advisory Council on International Monetary and Financial Problems, Department of the Treasury (Glendinning)1
Dear Mr. Glendinning : Our Ambassador to Ecuador has advised us that the Ecuadoran Defense Minister has indicated the desire of the Ecuadoran Government to purchase United States military equipment on deferred payment terms. The Ecuadoran Defense Minister has stated that Ecuador is financially able to purchase such equipment on terms providing for maximum annual payments of $1 million. Annual payments in that amount would have the effect of limiting to $3 million the total amount of credit which could be extended to Ecuador, inasmuch as Section 106(b) of the Mutual Security Act of 1954 requires repayment in full within a three year period.
The State Department desires to advise our Ambassador that the extension of $3 million of credit for repayment over a three year period, as authorized by Section 106(b) of the Mutual Security Act of 1954, has been approved, in principle. It is desired to authorize him to suggest to the Ecuadoran Defense Minister that the Ecuadoran Government submit a formal request for the specific items of equipment desired for purchase on credit terms but to make clear to [Page 954] the Defense Minister that the total amount of credit possible for the United States to extend would be a maximum of $3 million.
The State Department plans to follow the above course of action unless notified of objections by members of the Staff or Council before July 6.2
Sincerely yours,