Memorandum by Mr. Joseph G. Green of the Division of Western European Affairs

Mr. James Edwards of the Export Import Bank called me by telephone yesterday afternoon. He asked me whether flour was considered as included in “munitions of war” under the terms of the President’s Proclamation of May 28, 1934,2 prohibiting the sale of arms and munitions to Bolivia.

I replied that the interpretation of the President’s Proclamation was not the function of this Department, but that I could state that flour had never been included in any of the definitions which I had ever seen of the terms “arms and munitions of war”, as used in the President’s Proclamation.

After consultation with the Under Secretary and Mr. Wilson of LA,3 I called Mr. Edwards by telephone again today. I told him that I had been thinking about our conversation of yesterday and that it had occurred to me that his question might have been in connection with some proposal that the Export Import Bank finance the exportation of flour to Bolivia. He replied that that was the case and that they were considering a proposal to assist in the financing of a large sale of wheat and wheat flour to the Bolivian Government. I said that, in view of the fact that Bolivia was engaged in a war with Paraguay,4 the financing by any agency of this Government of such a sale to the Bolivian Government ought to be considered from its political angle. Such action by this Government would have, I said, a very unfortunate effect upon our relations with other American Republics and would give rise to justifiable criticism. Mr. Edwards said that he realized that what I had said was true and that the Export Import Bank was taking those facts into consideration in its study of the proposal. He said that he did not believe that the Bank would [Page 312] agree to finance the sale. I replied that I hoped it would not as we could not approve such action and I requested him to see to it that the Department was officially informed of the proposal before any action was taken if the Bank should, contrary to his expectations, view the proposal favorably. He assured me that he would keep us fully informed of any further developments in the matter.

Joseph C. Green
  1. Department of State, Press Releases, June 2, 1934, p. 327.
  2. Division of Latin American Affairs.
  3. See vol. iv, pp. 7 ff.