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The Ambassador in Brazil (Gibson) to the Secretary of State

288. Bolivian Minister yesterday told Minister for Foreign Affairs he was convinced that if he and the Paraguayan Minister could meet informally in company with the Foreign Minister and the American [Page 226] Ambassador they would be able to come to a prompt agreement on a formula. At his request, Foreign Minister broached the subject to the Paraguayan Minister, who agreed and has submitted the proposal to his Government for approval.

The Paraguayan Minister said he felt his Government would consider it desirable to include the Argentine Ambassador. The Foreign Minister feels that this is desirable in order that it may be clear in Buenos Aires that this is merely a friendly exploration, and incidentally because the Argentine Ambassador here is steady [ready?] and anxious for agreement.

In talking to both Ministers, Dr. Macedo Soares made it clear that if agreement were reached through any such conversations it must be understood in advance that the conciliation conference itself would take place in Buenos Aires as planned.

The Minister for Foreign Affairs said he was convinced there was a real possibility of “surprising results”. One of the chief obstacles has been the Bolivian claim to a plot on the Paraguay River south of Bahia Negra, and he is convinced from what he has learned that if this is put forward by Bolivia Paraguayan authorities will agree in order to bring about an immediate cessation of hostilities, which is now the chief Paraguayan desideratum.

The Bolivian Minister says that if agreement can thus be reached on a formula which permits the early convening of the conciliation conference, the Bolivian Government will be able without losing face to withdraw the whole question now pending at Geneva on the ground that through fortunate developments agreement has been reached by direct negotiations.

The Department will recall that both the Bolivian and Paraguayan Ministers, before their recent arrival at this post, were the Ministers for Foreign Affairs in their respective countries and are thoroughly familiar with the whole problem.

It is the idea of the Minister for Foreign Affairs to invite the two Ministers to tea at his home with the Argentine and American Ambassadors in order that the meeting may be as unofficial as possible and leave them to work out their own course. He has made clear to both Ministers that if we accept their proposal to act as friendly witnesses they must not expect us to exercise anything more than helping and moderating influence.

Gibson