The Chargé in Bolivia (Muccio) to the Secretary of State

No. 517

Sir: I have the honor to refer to my despatch No. 496, dated December 24, 1935,1 briefly describing the internal political confusion in Bolivia, and to report certain realignments that have taken place in the Bolivian political scene since that date.

Union of the C. S. B. and A. S. B. G.

On January 30, 1936, the leaders of the “Acción Socialistic Beta Gama” agreed to incorporate their organization in the “Confederación Socialista Boliviana.” The unifying pact provides that all the political units making up the confederation were to be unified into one political organism with a single program to be adopted at a congress to be held early in February; also that a nation-wide convention is to be convoked not later than March 15 to found a genuine socialistic party.

This realignment brings all the “leftist” political groups into a united front. The leaders are not believed to be genuine socialists. The two prime movers of this group, Enrique Baldivieso and Carlos Montenegro, are both former members of the Siles regime that was ousted by the revolution of 1930.2 Their intimacy with Colonel David Toro, dominant personality in the Bolivian Army who was a Cabinet Minister under President Siles, makes this political group particularly potent and lines up the Socialistic-youths’ movement with the Army Command.


The Bolivian Army has steadfastly refused to return to a peace time basis. It has forced the Government to appropriate 40,000,000 Bolivianos for its use in 1936 out of a total budget of 130 millions. If 49 millions for service on war loans and 10 for repatriation of prisoners is deducted from the budget total it will be seen that the Army [Page 221] receives 40 millions and all other government activities only some 31 millions.

The Army General Staff has refused to remove the war-time restrictions such as censorship of the press and mail, and the restrictions for entry into Bolivia thereby being able to keep out its enemies. It controls all roads in and approaching the Chaco as well as the Cochabamba-Santa Cruz Road. During the war the entire petroleum production of the Standard Oil Company of Bolivia was turned over to the Army for war purposes. It is still taking this over and is now endeavoring to retain the right to distribute gasoline and kerosene throughout the entire country. The Army controls the entire telegraph systems of the Government. In fact, it is reliably stated that the General Staff now administers more government functions than the government proper and the press and government in general is completely dominated by Colonel Toro.

There is increasing talk that Colonel Toro will not wait for the National Assembly scheduled to be voted for in May to restore a constitutional government in Bolivia, but will actually take over the government so soon as the prisoners problem is settled. This talk is so common and generally believed that I personally know of several prominent Bolivians who have commenced to purchase foreign currency, confident that internal disturbances are inevitable, leading to the further depreciation of the Boliviano.

Legion de Ex-Combatientes

Many feel that the Legion de Ex-Combatientes is the only organization that can thwart Colonel Toro’s political ambitions. The members of this organization are men who served in the Chaco, not of the Regular Army. They have been most critical of the gross incompetence exhibited by the Army Command in the Chaco. The military idol of this group is Colonel Bernadino Bilbao Rioja, the only higher officer who came through the Chaco campaign with the respect and admiration of the rank and file, as well as the junior officers. Colonel Bilbao was sent to London in October on special “mission” and the Government has recently extended the term and emoluments of his mission. I have been reliably informed, however, that he is now en route to Bolivia. Bilbao and Toro are born enemies. With the Legion de Ex-Combatientes and the support of the junior officers and some of the file in the Regular Army, Bilbao may be able to deter Toro from openly taking over the Government. If Toro does attempt it, and Bilbao succeeds in reentering the country, there is likelihood of fighting.

Respectfully yours,

John J. Muccio