723.2515/2678½

Memorandum by the Chief of the Division of Latin American Affairs (Stabler)

Mr. Charles Evans Hughes made the following suggestions to the Secretary of State, Mr. Olds and Mr. Stabler this morning in regard to a tentative plan for drafting a proposal to Chile and Peru for the sale of the provinces of Tacna and Arica to Bolivia:

1.
That the Republic of Peru and the Republic of Chile simultaneously cede all rights which they claim to the ownership of the provinces of Tacna and Arica in perpetuity to Bolivia for such, compensation as shall be determined later which shall be paid by the Republic of Bolivia to the Republic of Peru and the Republic of Chile.
2.
That the Republics of Chile, Peru and Bolivia agree to determine the sum which shall be paid to Chile and Peru by Bolivia for the cession of their rights to the above-mentioned territory and the Secretary of State to offer his good offices to the three countries to aid them in determining the amounts to be paid.
3.
Should the three countries not be able to reach an agreement as to the amount of money to be paid by Bolivia for the territory they hereby agree to leave the determination of the amount to the Secretary of State of the United States, his decision to be binding and final.
4.
Chile and Peru shall agree to reach a settlement between themselves as to the apportionment of the funds paid by Bolivia for the provinces.
5.
The Secretary of State hereby undertakes to offer his good offices to assist Chile and Peru in the division of the sum paid for the provinces should the Departments of Chile and Peru not be able to arrive at a settlement.

Stabler