724.34119/82: Telegram

The Chargé in Paraguay ( Thurston ) to the Secretary of State

53. I have been informed by President Ayala that in view of the good will displayed by the Bolivian officials during the several interviews with Paraguayan officials that have occurred in the Chaco since the cessation of hostilities; and in view of the apparent dominant position in Bolivian affairs occupied by General Penaranda, he has authorized General Estigarribia to discuss with the latter the question of the boundary between the two countries. Should a basis for an agreement on this fundamental issue be arrived at it will be submitted to the Buenos Aires Peace Conference.

In order to contribute to the development of a better feeling which might further negotiation all Bolivian doctors among the prisoners held by Paraguay are being released and similar action with respect to students is contemplated.

Not repeated to Buenos Aires.