622.116/115: Telegram
The Secretary of State to the Minister in Ecuador (Long)
18. Your despatch 925, April 2.37 As in the case of the increases in freight rates on imported flour discussed in your despatch 607, August 14, 1939 and the Department’s telegram 42 of August 23,38 it is clear, particularly from the language of the circular of the Minister of Agriculture, that the purpose of the action taken by the Government is to restrict the sale of imported flour. The effect, so far as concerns American flour, is effectively to impair a trade agreement concession by limiting the sale of that product to a relatively small area near Guayaquil. The action taken, therefore, would seem to fall within the meaning of Article XVII.
You should call the Foreign Minister’s attention to that Article, noting that the action taken appears to fall within the terms thereof, and informing him of this Government’s concern as to the possible effects on our trade, particularly if the higher freight rates are to remain in force for a considerable period. You should inquire regarding the length of time it is proposed to maintain the higher rates, and express the hope that the regular rates will be restored within a short time. In this connection, endeavor to ascertain the period estimated to be necessary to dispose of stocks of domestic flour.
As mentioned previously, please keep the Department informed briefly by telegraph of further developments.