724.3415/4209: Telegram
The Ambassador in Brazil (Gibson) to the Secretary of State
[Received 11:35 p.m.]
256. 1. Paraguayan Minister here today informed Minister for Foreign Affairs under instructions from his Government, that if Brazil and the United States do not participate in the League negotiations Paraguay will withdraw from the League sooner than accept jurisdiction of Chaco Commission.
2. The President of Bolivia telegraphed Minister here to make personal appeal to President Vargas for reconsideration of Brazilian stand and acceptance of place on League Chaco Committee. The President has today made it clear to the Minister that the Brazilian Government will not modify its attitude.
3. The Minister for Foreign Affairs says that, although the belligerents may not have analyzed their fears, one principal apprehension lies in the thought of a demobilized army returning penniless and unemployed and its accompanying problems. The Brazilian Government [Page 96] has told the Ministers of Bolivia and Paraguay that as demobilization proceeds Brazil will provide work for a large number of demobilized men on coffee and cotton plantations where there is shortage of labor. He pointed out that this should predispose the two Governments towards peace in that it provides immediate gainful occupation for many thousands of men, lessening the possibility of revolution and providing unexpected income.
4. Bolivian Minister has also been told that if in the conciliation conference Bolivia is awarded a port on the Paraguay River south of Bahía Negra Brazil would consent to a Bolivian air service flying over Brazilian territory connecting with nearest railroad, thus gaining rapid access to the Atlantic Ocean. He states Bolivia now has a considerable amount of suitable aviation material to set up such a service.
5. The Minister for Foreign Affairs is in agreement with the understanding expressed in your 139, September 29, 2 p.m., that it is essential to await developments. In his opinion if we take no action both Bolivia and Paraguay will within a short time get nervous and themselves make overtures. As both are suspicious of the Argentine Republic their pleas will probably be addressed to the United States and Brazil. The Minister’s idea would be to take advantage of the opportunity to impose reasonable terms on both sides without bringing Lamas into the discussions, but, in order that there may be no reason for offense, he suggests that after having secured an agreement to negotiate we should insist that the negotiations take place in Buenos Aires under the presidency of Lamas. Naturally all the foregoing is contingent on developments at Geneva.