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822.24/164: Telegram
The Acting Secretary of State to the Minister in Ecuador (Long)

                           WASHINGTON, February 28,1942-6 p. m.
  121. Your 153, February 25, 9 p. m. The Ecuadoran Ambassador
has received a letter from the President of the Republic indicating
that apparently the President and his advisers are under the impres-
sion that Ecuador under the proposed lend-lease agreement would
be expected to repay $17,000,000 over a period of 6 or 7 years. It is
difficult to understand how such an impression could exist, since the
text of the proposed agreement clearly indicates in Article II that
Ecuador is expected to pay only 3.53% of the total, or $600,000 over
6 years, at a rate of not over $100,000 per year. In addition there are
no interest payments to be made. The Government of the United
States believes that the terms being offered Ecuador are exceedingly
generous.
  The President of Ecuador in his letter asked two questions: (1)
Is there any possibility of Ecuador's having to pay less than
$17,000,000? The answer to this is as indicated above. (2) Does
the lend-lease agreement include local expenditures and salaries of
the Army? The answer to this is no-the lend-lease agreement covers
only materiel to be furnished Ecuador from the United States.
  The Ecuadoran Ambassador is cabling his Government at once
answering these questions.
                                                         WELBES

810.20 Defense/2443a: Telegram
The Acting Secretary of State to the Ambassador in Ecuador (Longg) 23

                              WASHINGTON, April 12, 1942-1 p. m.
  239. The Lend-Lease Agreement with Ecuador was signed April
6 24 and the Embassy in Washington will now proceed to deal directly
with the War Department on the materials which it desires. It is
believed that President Arroyo's objection to signing an agreement
on the Galapagos, similar to the one signed on January 24 between
American and Ecuadoran military authorities on Salinas under the
provisions of the general defense agreement, should now be obviated.
The War Department believes this agreement on the Galapagos is of
the utmost urgency for the defense of the hemisphere. You are re-

23 The Legation in Ecuador had been raised to the status of Embassy March
5,
1942.
24 PoSt, p. 379.


373


EGUADOR


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