724.34119/140: Telegram
The Ambassador in Brazil (Gibson) to the Secretary of State
[Received August 28—3:05 p.m.]
203. The Conference has now reached a point where it is generally recognized that any attempt to deal with the territorial question will lead to a break-up and failure. There can be no doubt on this subject in view of, (1) the uncertain political situation in Bolivia; (2) the cynical Bolivian attitude of seeking to force a break for domestic political reasons and, (3) the unyielding position of Paraguay as regards direct agreement and avowed resistance to submitting the question to the World Court.
Efforts have therefore been concentrated on finding some way of keeping the Conference alive and at the same time avoiding debates while awaiting more favorable developments. This difficulty has been met temporarily by the respectable subterfuge of putting off discussions until after the demobilization. At the end of that period however the same problem will again confront us. We might be able to devise one pretext after another to avoid the issue and gain time but I can not now see how we are to avoid the territorial question for any considerable time unless there are upheavals in Bolivia or other political developments which justify postponement.
In casting about for possible expedients the essential thing is to maintain the peace and defer settlement of the territorial question until it can be solved under favorable conditions.
The chief obstacle to this is a fundamental defect in the Protocol of June 12th: it was stipulated that the parties failing direct agreement should refer the question to arbitration. Paraguay intimates clearly that it will neither make concessions to secure direct agreement nor agree on the terms of an arbitral compromise. There is no provision for this latter contingency aside from the undertaking of the mediators that they will remain in Conference until agreement is reached. Paraguay holds practically all of the Chaco and if she sits tight she creates a deadlock.
A way out might be found by reviving a modified version of a scheme drawn up in June by Cruchaga (my 103, June 25, 10 p.m.) [Page 129] to persuade the parties to sign an immediate treaty of peace, disposing of the secondary questions and entrusting the territorial question to an international mixed commission.
This suggestion has been given point by the developments of the past few months and I am more convinced now than I was then that if we are to deal with this problem effectively it will have to be through some such mechanism which puts an end to the acute public interest in this region and allows a solution to be worked out under wholesome conditions of a bored public opinion.
What Cruchaga suggested was an international mixed commission on which the parties were represented to devise a form of solution to be submitted to the Peace Conference for the acceptance of the parties failing which the question should go to arbitration. You might care to give thought to the advisability of having the mediatory powers take a definite position and urge upon the parties that they have every interest in entrusting the definite solution of the problem to an international mixed commission of three or five members without representatives of the parties. Such a body made up of practical and experienced men in whom they have confidence could obviously be depended upon to make a solution responsive to real needs instead of a purely legal decision. Both parties would be spared long delays and heavy expense. If the mediatory powers were to take a definite stand the parties might be glad to acquiesce; Paraguay, in order to escape possible resort to the World Court and to be relieved of responsibility for any essential concessions to Bolivia and above all because they know that unless some reasonable solution is accepted they will continue to live in fear of another war; the Bolivians should also be willing because as matters now stand they have little chance of getting any territorial concession and could hope for the face saving solution only through some such settlement.
The best arrangement would of course be to get the parties to agree in advance to accept the solution; failing that they should agree that if the proposed solution was not accepted the Commission would have the power to settle the terms of arbitration.
I am not submitting the foregoing as a proposal but as a thought to be considered.
I feel it would be unwise to broach this subject even confidentially with other governments before the resumption of active work after the demobilization but in the meantime should be glad if you would have it under consideration.
I have discussed the foregoing with Macedo Soares who agrees that it is probably the only scheme which offers hope of a successful solution. He has no alternative plan. However he feels strongly [Page 130] that it should not be brought forward until the policy of drift has been afforded ample time to prove its hopelessness. In the light of full information he believes that all plans brought forward in the early stages of the Conference will be rejected by one or both parties and that the wise course is to hold this idea in reserve until we feel the time is propitious for bringing it forward.
Cipher text by air mail to Buenos Aires.