The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-07-17
ECUADOR KICKS ON
DOLLAR DIPLOMACY
Plan of Secretary Knox Is
Bitterly Opposed in the
Little Republic.

AssAS
Washington, July 17.-Negotiations
are under way through the State De-
partment whereby the Galapagos Is
lands, off the coast of Ecuador and
commanding the Pacific entrance to
the Panama Canal will be forever re-
moved as factor to be turned against
the safety of the United States in the
event of war
Abandoning the old plan OF purchas-
ing the islands from Ecuador. Secre-
tary Knox has called his dollar diplo-
macy" into play. But an obstacle in the
person Of Archer Harmon, a promoter
stands in the way OF the accomplish
ment of the plan. and conferences to
be held at the State Department with
in few days are expected to remove
him from the equation.
Not only then will the neutraliza-
ton of the Galapagos Islands be ac-
comDlished. but one of the pest holes
of the world will be cleaned up, name
ly Guayaquil, the seaport of Ecuador,
will be retained in American hands,
and the stock and bond holders Of this
road will be fully protected in their
rights.
The long discussed $4,000, 900 loan
to Ecuador Is the means by which
these ends are to be brought about.
Harmon in the Way.
For the present Mr.. Harmon alone Is
blocking the success Of Secretary
knox's plan. This man, II is asserted,
has made Americans hated in Ecuador,
where he has for a long time dominat-
ed the railroad situation. He has allie
mated the support and sympathy OF the
natives by his methods and brought
Ia In danger OF passing into foreign
control. to the great damage of Ameri-
can investors. The intervention of the
State Department Ia necessary to avert
a crisis that would not only menace
American interests in Ecuador but
place the United States at a great tao
teal disadvantage in relation to the
great waterway that is nearing com.
pletion across the isthmus.
Speyer & Co, of New York, are
the financiers who are back of the pro-
poesd loan, which is not to be guaran-
iced by the United States through trea.
ty, as In the case OF the proposed loans
to Honduras and Nicaragua. but Is be-
Ing placed on their own responsibility,
with only such support from the Unit
ed States as Is accorded to all Ameri-
can investors in foreign countries.
The situation Is interesting as illus
trating the new phase of statecraft
embraced in the dollar diplomacy"
One has but to look at map to dis
cover the sthragetic importance Of the
Galapagos Islands in their relation to
the Panama Canal. Lying of the coast
Of Eucador they are in a direct line
with the Pacific entrance to the canal.
As base Of supplies they would af-
ford inestimable advantages to the ma
ton possessing them. Ever since the
problem of digging the canal it has
been the dream of statesmen and mil
ltary experts to have the American
flag flying over these islands.
Conditions Of Proposed Loan.
In taking up the consideration of
the loan therefore, which must have
the sympathetic support of the United
States. at least. the State Department
put forward series of considerations
as follows:
I. 1t must be understood that the
Islands are not to be fortified or dis
posed Of to any foreign power.
2. Assurances must be given that
the port Of Guyaquil will be cleaned
and put in perfect sanitary condition
In advance Of the opening Of the Pana-
ma Canal. American sanitary experts
will be furnished for the purpose il
desired.
3. The Quito Railroad must be re-
tanned in American control and the
Interests Of stock and bond holders
amply safeguarded.
II Is said on authority that nothing
more than formal approval of the
loan IL contemplated by the depart
ment.
Ecuador Is up In arms over the af-
tair. The newspapers are filled with
protests agains the loan. The existing
administration will retire from Office
AUGUST WutH fTeSluent
will resign in favor of his successor.
Estrada. The latter is bitterly opposed
10 the loan, which must have the ap-
prevail OF the Ecuadorian Congress to
become effective. A special session of
the Congress has been called to meet
on July "a.
1t Is to the influence Of Harmon that
the recall of Minister Fox from Ecua-
dor Is attributed. Mr.. Fox. it is declar-
ed, having fallen under the promoters
spell precisely as did Alfaro.
All Of the charges. all of the protests
that are being made against the loan
hit back OF him and the situation has
become such that recent advices from
Ecuador indicate that unless Harmon
is induced to get out of the country
trouble will follow an attempt to put
the loan through at the special session
Of Congress.
An Oversight.