824.6368 ST 2/135
The Minister in Bolivia (Norweb) to the Secretary of State
[Received May 18.]
Sir: I have the honor to confirm my telegram No. 28, dated May 8, 3 p.m.,39 reporting that the personal message addressed by the Secretary of State to His Excellency the Minister of Foreign Affairs of the Republic of Bolivia had been read to Dr. Finot this morning. The message obviously made a good impression on the Minister of Foreign Affairs and he immediately requested a copy, expressing a wish to make a written personal reply thereto through this Legation. A copy of the written message as delivered to Dr. Finot is enclosed.40
That the message made a definite impression on Dr. Finot was obvious from the fact that at the beginning of his conversation his comments were much more guarded and temperate than heretofore. Dr. Finot authorized me to report that he had been designated by President Toro to represent the Junta in discussions with Dr. Carlos Calvo, attorney for the Standard Oil Company of Bolivia, who is scheduled to arrive in La Paz today, and that he is personally disposed to do everything towards seeking a basis for a possible settlement, but that this will be extremely difficult. He continued that the Standard Oil matter had gone too far and that internal political considerations would prevent the Bolivian Government from receding, adding that a plebiscite in the country would well nigh be one hundred per cent for the Government’s action.
Dr. Finot embarked upon a long, involved series of comments, the high spots of which are the basis for this report. At the beginning, his statements were cautious, but as he grew expansive it became evident that he was principally interested in justifying the Government’s action. His attitude made apparent that he was the member of the Junta who had instigated the Government’s action, or at least is the principal supporter thereof.
Dr. Finot, at the outset of his conversation, stated that we could count on his cooperation to try for a settlement. He realized that the interpretation and the attendant publicity given abroad to the Bolivian Government’s action might be prejudicial to United States-Bolivian relations and particularly to Bolivia’s dire need to attract additional foreign capital; but that Bolivia would simply have to take the consequences of its justifiable action.
Dr. Finot again stressed the importance of the incriminating documents found in the Standard Oil safe in La Paz. He has not yet seen [Page 287] these documents, and stated that he would not form a definite decision thereon until he had time to make a detailed personal study thereof; but that if they are as damaging as reported, he considers the possibility of an adjustment remote.
Dr. Finot then brought up the question of the Standard Oil Company’s attitude and activities during the Chaco war. The Company’s war activities are of course the principal basis of the ill will throughout the country directed against the Standard Oil. He reiterated that the Bolivian Government’s action was not only legally and morally justified on account of fraud and the non-cooperative stand taken by the Company during the war, but that it was especially necessary to dispel the impression current throughout the world that the weak and impoverished Bolivia had been merely an instrument of the all-powerful, imperialistic world monster, the Standard Oil Company—that the Chaco war had been fought merely to protect the Standard Oil properties. Finot feels that the Standard Oil should have been driven out of Bolivia then, and stated that he had discussed this with an official of the Department who, at the time, “didn’t reply yes, but didn’t say no.” He added that since the Standard Oil had not been then driven out, the internal political situation makes it essential to eliminate the Standard Oil Company now and that he would be the last person in Bolivia to be willing to see the Standard Oil permitted to re-enter.
Finot then commented that the external political situation also made the Government’s action unavoidable. It had been obvious from the beginning of the Chaco controversy that the United States would not take issue thereon with the Argentine. Chile is altogether too weak to stop the Argentine and Brazil is too absorbed with its internal dissensions to thwart Argentine imperialism. The only recourse left to defenseless Bolivia under the circumstances is to placate the Argentine by making available the Bolivian oil resources coveted. He continued that he had discussed this matter of the Argentine dominating the Chaco situation in Washington with Assistant Secretary Welles and later at Buenos Aires had discussed it further with Secretary Hull and Ambassador Braden, but that since the neighboring powers cannot, and the United States will not, do anything, Bolivia simply has to play up to Argentine imperialism in order to obtain an acceptable settlement in the Chaco.
As the conversation progressed, in spite of Finot’s repeated assertions that he desired an equitable settlement, it became evident that he was more eager to justify the Bolivian action than to appreciate the stand taken by the United States Government that Bolivia has given no overt intention to provide just and equitable compensation to the owners of these properties nor manifested any disposition to [Page 288] arbitrate or otherwise adjudicate any rights or equities which may be involved.
Dr. Calvo is scheduled to arrive in La Paz this afternoon, and Mr. Pannill41 on Monday. The United States having given definite notice to Bolivia of its especial interest in this matter, and the way being left open for friendly mediatory action, I should like to repeat that it would seem wise for the Legation to stand aside at this juncture, reserving any further action until the trend of the discussions indicates whether or not Bolivia, in spite of its present attitude, accedes to a friendly adjustment.
Respectfully yours,