740.34112A/51: Telegram
The Ambassador in Paraguay (Frost) to the Secretary of State
[Received 8:25 p.m.]
149. Paraguayan Cabinet yesterday discussed the subject of discontinuance of purchases by Paraguayan Governmental entities from firms on Proclaimed List here. (President62 had ordered such discontinuance late last November but compliance has been very imperfect). Minister of Agriculture63 undertook to discontinue such purchases by rapid stages on the understanding that supplies and merchandise necessary for his Ministry will be forthcoming from the United Nations. Other Cabinet Ministers expressed willingness to take such action when and if they are assured that the needs of their respective Ministries can be filled by purchases from listed firms. They made the point, however, that three or more of the largest non-listed importing and distributing firms have been shown to have conspired in aid of the abortive Bray revolt64 of January 26 and consequently cannot be patronized by this Government. The firms in question have handled a substantial share of the American goods sold here. Thus the situation as to abstention by the Government agencies from trading with listed firms will be difficult until arrangements can be made for [Page 1489] adequate supplies in the hands of non-listed firms who are not unfriendly to the present Government. This telegram is merely informatory. If found desirable recommendations will be submitted later.
In actual fact Ministry of Agriculture has already gone farther than Minister indicates as Commercial Attaché65 secured issuance of instructions fortnight ago by Agricultural Bank against any business by its branches with listed firms.