611.2431/17
The Minister in Bolivia (Norweb) to the Secretary of State
[Received March 19.]
Sir: With reference to airmail instruction No. 37, of February 26, 1937, and previous correspondence regarding the possibilities of a trade agreement between Bolivia and the United States, I have the honor to report that in an interview at the Foreign Office yesterday the Foreign Minister agreed that it might be difficult to find a basis for a satisfactory trade agreement, and it was that thought which had prompted him to suggest the formation of a commission of investigation.
[Page 273]I took the occasion to inquire if he had any specific proposals in mind as it would appear, in view of the difficulties we both appreciated, that the informal exploratory discussions in Washington would have greater chance of success if both parties had some definite goal in mind. To these observations Dr. Finot remarked that nevertheless his government is of the opinion that by patient investigation some basis for negotiation might be discovered mutually beneficial to trade between the two countries.
This inconclusive conversation is but another indication, in my opinion, that the Government of Bolivia has no definite offer or project in view, but, not wishing to overlook any opportunity of improving its trade relations, is hopeful that preliminary conversations in Washington may afford a clue that could be developed into something profitable.
In connection with the appointment of a commission reference is made to recent despatches from the Legation regarding the establishment of three commissions to study trade relations and related matters with the governments of the Argentine, Brazil and Chile. In view of the marked rivalry between these three countries for trade predominance in Bolivia it might perhaps be injudicious at this time for the United States to appear to be injecting itself into this triangular competition. It is apparent that while the conclusions of these three commissions may be some time in being formulated, the Bolivian Foreign Office is not equipped with sufficient personnel to give attentive considerations to so many proposals at one time.
On March 9, 1937, the London price of tin rose to £301/0/0 per ton, the highest price for many years. The average price during January, 1937, had been £228/3/11, during February £233/17/1 and on the first of March had been £244/10/0. There was thus an increase of £57/10/0 during the first few days of March. The production in Bolivia remains low as only 1,755,426 fine kilos (1,728 English tons) were produced during the month of February, but this high price should offer some inducement for increased production in spite of the fact that the Government continues to require the delivery by the miners of a large percentage of their foreign exchange. If sustained for any period the present high price will undoubtedly affect Bolivia’s desire for a tin agreement with the United States since it can find a ready market in England for its entire present production and under the quota agreement can market at least twice the present production if it is mined. The only present difficulty is that the Government must convince the miners that it would be to their advantage to increase the production by granting some decrease in the amount of foreign exchange which must be turned over to the Government.
[Page 274]Thus, while the desire for a tin agreement in Bolivia is lessened, the interest of the United States as a consuming country is increased since through the manipulations of the Tin Pool the price may be maintained at this high level for some time to the detriment of the American consumers.
I should greatly appreciate being kept currently informed of any conversations between the Department and the Bolivian Minister. I feel that I should add that having achieved the principal purpose of the Department’s instruction, namely of having the discussions initiated in Washington rather than in La Paz, there is little further contribution the Legation can make at this juncture except to assist in the general survey of Bolivian economic and financial conditions which is about to be undertaken by Commercial Attaché Merwin L. Bohan, at the suggestion of this mission.
Respectfully yours,