724.3415/2609: Telegram
The Minister in Paraguay (Wheeler) to the Secretary of State
[Received December 10—1:24 a.m.]
169. Your telegram No. 56, December 8, noon. My statement referred to your numbered paragraph 3. Paraguay will not consent to the proposed Bolivian policing of any portion of the Chaco. She insists that Bolivia’s alleged civil settlements exist only for her soldiers and would vanish when her troops retire. She considers that also your insistence on the right of policing is solely in order that it may later be made a basis for a claim of rightful ownership or indefinite occupation. She points out that the land involved, the area west of meridian 60, is in large part the Hayes award whose northern boundary is the Rio Verde and the extension of its line westward. Paraguay has always considered the western point of the triangle to be about the location of Ballivián. In my opinion Paraguay will not yield to pressure to concede any actual or implied right of Bolivia to retain either troops or civil police in any portion of the area covered by the Hayes award. Practically the entire area west of meridian 60 up to the juncture of a line drawn from Bahía Negra to the Pilcomayo at meridian 62 is held by companies who purchased their holdings from the Paraguayan Government to which they have been paying taxes for many years. Moreover meridian 60 bisects the Mennonite Colony. This Government dare not admit a Bolivian right to occupy or police land that possesses such a status. Until the establishment of the Bolivian fortínes Paraguay needed no police except on the river banks along the railroad and at the colony. For a while after demilitarization she might require somewhat more, for the reason that the Indians who normally were employed by the Paraguayans have been driven to the forests by the Bolivian soldiery and have become demoralized, but after demilitarization conditions should rapidly return to normal.
Paraguay is convinced that demilitarization must be an accomplished fact before such points as policing and the bases of an arbitration can be discussed. The insistent demand that cessation of hostilities and demilitarization be contingent on and subsequent to agreement on these points she considers is a Bolivian device calculated to bring about through long drawn discussion the delay which Bolivia needs to extricate her Army and give Kundt time to reform it. In demanding demilitarization Paraguay is asking of Bolivia no more than she herself offers to submit to. After an agreement therefor is reached she will welcome any commission civil or military from either Washington or Geneva for any legitimate purpose whatsoever.
[Page 123]I believe Kundt’s announced plans will lead Paraguay to hold as tenaciously to her demand for reduction of standing armies.
The feeling against admitting an arbitration has been steadily growing here. Ayala last night expressed to me his fear that after fall of Saavedra the military party may be in a position to compel him to withdraw the offer. This is not because of military successes but is due to increasing popular bitterness at Paraguay’s immense losses in lives and treasure caused by Bolivia’s refusal of an arbitration that has all along been offered her.
The President believes that if Saavedra should fall and the Liberal party take the reins in La Paz it will probably seek an honorable peace and if such an attitude is shown Paraguay might go further than she has up to the present. He tells me that Kundt’s contract is for the duration of the war and called for the payment to him of 600,000 gold marks including his personal indemnity. A large part of this sum was paid him before leaving Germany.