The Minister in Bolivia (Caldwell) to the Secretary of State

No. 56

Sir: Referring to the Department’s confidential instruction No. 17 of October 20, 1937, as to a proposed conference between the Presidents of Argentina, Brazil, Bolivia and Paraguay, I have the honor to report that in accordance with that instruction I had a conference yesterday afternoon with Dr. Fabián Vaca Chávez, Minister for Foreign Affairs, in which I presented to the Minister orally the additional views of the Department as set forth in the penultimate paragraph of the Department’s instruction under review.

In reply, Dr. Vaca Chávez expressed special gratification to learn that the efforts being made by the Conference to bring about a solution of the controversy would not be relaxed on account of any supplementary efforts which might be made in the same direction in the meantime. He added that Dr. Alvéstegui had been specifically [Page 32]instructed to further the work of the Conference in every possible way. While he had not been instructed to propose specific solutions, he had been authorized to accept certain possible solutions in case these were proposed to him by the Conference.

Dr. Vaca Chávez went on to say that he felt very strongly that no step, however hopeful, should be taken to weaken the prestige or the influence of the Conference itself, and he assured me of the desire of the Bolivian Government to make use of the machinery of the Conference in carrying out any plan which might possibly be agreed upon in the proposed conference between the four Presidents. From the tone of his remarks I gathered that the whole plan was intended to be supplementary and that arrangements for the proposed meeting were still tentative and uncertain.

Dr. Vaca Chávez then went on to tell me that the suggestion in question had come originally from Dr. Saavedra Lamas, who had mentioned the matter first to Dr. Rodriguez Alves and later to Dr. Alvéstegui, who had made a confidential report on the subject during his recent visit to La Paz.

As to possible concrete solutions, which might perhaps be offered if a suitable opportunity arose, Dr. Vaca Chávez went on to say that he had been informed that Dr. Saavedra Lamas had sent Colonel Schweitzer as his personal emissary to Asunción to sound out opinion in Paraguay as to a reasonable territorial solution in return for a cash payment on the part of Bolivia to Paraguay. At the same time Captain Mauriño had come to La Paz on a similar mission. Dr. Vaca Chávez said that Captain Mauriño had reported that he had not found positive evidence as to the probable attitude of Bolivian opinion on this question.

As a possible alternative, Dr. Vaca Chávez added confidentially that the Bolivian Government was also considering another possible solution, involving the extension of the railroad from Puerto Casado to the southern oil fields, with an agreement on the part of Bolivia to export oil to Paraguay by this route in return for a definite territorial settlement and the use of Puerto Casado as a free port on the part of Bolivia, this suggestion being kept for the moment in strict reserve to be used only if other suggested solutions proved to be impracticable. All this Dr. Vaca Chávez told me as an indication of the desire of Bolivia to seek in every possible way a prompt and equitable solution under the terms of the peace protocol of June, 1935, and through the machinery set up at that time.

In this connection, however, the Brazilian Legation has received information which it believes to be reliable that, on his arrival in La Paz, Captain Mauriño went to President Busch and to two high officers of the Army (Peñaranda and Calleja) with a personal message [Page 33]from Dr. Saavedra Lamas, suggesting a direct arrangement between Paraguay, Bolivia and the Argentine as the only practicable solution of the Chaco problem.

Respectfully yours,

Robert G. Caldwell