833.5151/268
The Chargé in Uruguay (Dominian) to the Secretary of State
[Received January 14.]
Sir: I have the honor to inform the Department that the question of exchange was once more the subject of a conversation this morning between the Minister for Foreign Affairs13 and myself. Today’s interview was brought about by complaints which had been reported to me occasionally during the past three months to the effect that local agents of American exporting firms had been told when applying [Page 958] for exchange at the Bank of the Republic that they should purchase their products in Great Britain rather than in the United States. When a case of this kind first came to my attention about three months ago, I found that the complainant was unwilling to allow use of his name and allegations in support of representations which I might make at the Foreign Office, lest retaliation in the form of absolute refusal by the Exchange Control authorities would meet future applications on his part. I also suspected that the demand for American products, which is generally constant, tended to cause quick exhaustion of any dollar exchange which became available.
During the past week, however, two cases of this type were brought to my attention by the Consul General and I thought that their discussion with the Minister for Foreign Affairs would reveal how matters really stood. I was concerned mainly with the prevention of discrimination against American products or any deliberate attempt at diversion of the normal demand from Uruguay for American products.
Accordingly, I informed the Minister for Foreign Affairs that I had knowledge that officials of the Exchange Control Department of the Bank of the Republic had advised, on various occasions, applicants for dollar exchange to make their purchases in Great Britain. I added that he could readily see how disagreeable an impression was being created whenever these agents conveyed news of the advice given to them at the Banco de la Republica to their principals in the United States. At a distance from Uruguay, the natural reaction would be that attempts were being made to divert American trade into British channels.
Minister Arteaga stated that he was greatly surprised that employees of the Bank of the Republic should give advice in the manner reported above. He added that no one in the Bank was authorized to make suggestions of that character and that he would make inquiry with a view of putting an end to the occurrences concerning which complaints had reached me. He then went on to explain that he was certain that no hostility was meant to American trade, even if some un-cautious official had made such a statement, which, he said, was probably caused by the shortage of dollar exchange in Uruguay. It was therefore natural that minor officials should point out that sterling exchange was available. He spoke of statistics for the first ten months of 1934 regarding the trade balance between Uruguay and the United States, which, he stated, indicated that it was unfavorable to Uruguay by 1,000,000 pesos, or about $400,000, and that his country was compelled, because of its adverse economic situation, to balance its international trade. He knew, he said, that we were an important customer [Page 959] of Uruguayan products and assured me that nothing would be done in Uruguay which would impair our value as a client.
My reply was that I had been informed that our purchases of Uruguayan products, particularly of meat, had increased appreciably during the last quarter of 1934. He stated he had not yet received statistics on the last two months of the year. I said that we had preliminary figures which indicated that the trade of our respective countries would probably be balanced and that, moreover, I had been informed that our purchases of Uruguayan meat had exceeded expectations during the past three months. I pointed out to him that there was a steady growth of our imports from Uruguay and that I considered it important that nothing should intervene to prevent the continuation and steady increase of these purchases on our part which I believed were of important assistance to the restoration on a sound footing of Uruguayan economy. The Minister again stated that he would give immediate attention to the matter and take steps to prevent officials of the Bank of the Republic from giving rise by their attitude or statement to complaints on our part.
Respectfully yours,
- Juan José de Arteaga.↩