724.3415/3434: Telegram
The Ambassador in Peru (Dearing) to the Acting Secretary of State
[Received 10:20 p.m.]
210. Chaco. Foreign Minister informs me this morning his last information from La Paz indicates likelihood of revolution, overthrow of Government and flight of Kundt51 and Salamanca52 to escape personal violence. Minister states situation is one of utmost importance and significance for Peru, that he anticipates no successful activity on the part of League Commission, and feels Bolivia’s recent military losses are so disastrous that the way will very soon be open for a further effort to bring about peace. He only awaits the moment to take the initiative and invite Brazil, Argentina and Chile to join with Peru in a further effort to arrange an armistice as desired by Bolivia and an arbitration as desired by Paraguay and eventual peace. In reply to my surmise that Bolivia in defeat might be stiffer than before the Minister stated his information was to the contrary and that in addition to the sobering effect of the recent military losses Bolivia’s funds are practically exhausted, that Bolivia has been using her gold reserve to meet the drain [of?] war expenses, that this reserve is now below 9 percent and promises shortly to disappear entirely and that in view of impending revolution Patino and other capitalists are withholding aid until the situation clarifies. The Minister felt Seventh Conference would be unlikely to take a vigorous initiative in the matter but would limit itself to resolutions leaving to the four neighboring powers the task of stopping hostilities and arranging peace.
Copy sent to American Delegation Montevideo.