724.3415/2996: Telegram
The Minister in Paraguay (Wheeler) to the Secretary of State
[Received 1:45 p.m.]
41. I am privately informed that Espil has cabled his Foreign Office that “the Department of State with the neutrals will take a renewed interest in the Chaco situation. The neutrals are disposed to adopt the Mendoza formula and it is expected that the Government will ask Paraguay and Bolivia to waive reservations and accept it”. Last night Ayala told me he believed he could swing the General Staff to agreement but in face of Kundt’s recent demand for a new army of 50,000 men he has no hope that Bolivia will accept. He has so far held back the declaration of a state of war at the instance of Cruchaga and Saavedra Lamas but in view of the great quantity of arms and ammunition now expected by Bolivia from Europe and the necessity of preventing its entry, if possible, he is averse to delaying the declaration beyond a few days longer irrespective of the progress of negotiations.