824.6363 ST 2/136
The Minister in Bolivia (Norweb) to the Secretary of State
[Received May 22.]
Sir: I have the honor to refer to my despatch No. 221, dated May 8, 1937, and to report that during my usual call on diplomatic reception day, May 11, 1937, Minister of Foreign Affairs Finot informed me that the reply to the Secretary’s personal message would be drafted within a few days.
Dr. Finot also volunteered information of his two talks with Dr. Carlos Calvo. According to Dr. Finot, Dr. Calvo’s attitude is that: he is here to hold preliminary conversations on behalf of the Company; has advised the Company against recourse to the Bolivian courts; no appeal for United States Government assistance is contemplated by the Company (Dr. Finot observed to me that such a course is forbidden by the contract, even in case of denial of justice); the two had agreed that it would be better for the negotiations to be carried on in La Paz only, without interference by New York; Dr. Calvo had asked for the Government’s terms, but that he had made the observation that discussions could continue only on the basis of a reasonable offer from the Company for a settlement; and that Dr. Calvo had told Finot that he had accepted the task of negotiating an adjustment because, as a Bolivian, he wished to do everything he could to avoid a situation where Bolivia appeared to be closing the door to foreign capital.
Dr. Calvo called yesterday afternoon, and his review of the two conversations with Dr. Finot tallies substantially with the outline given me by Dr. Finot. Dr. Calvo informed me that during his preliminary [Page 289] conversations he stressed the legal aspects of the case and is confident that he has undermined Dr. Finot’s cocksureness of the legality of the Government’s action. Dr. Calvo is eminently qualified to discuss the legal aspects of the case as he was the legal adviser who drafted both the Richmond Levering and the Standard Oil contracts. Dr. Calvo added that he had stated to the Minister of Foreign Affairs that a prior admission of guilt on the part of the Company could not be considered.
Dr. Calvo commended the attitude of the Legation in keeping before the Minister of Foreign Affairs the Department’s interest in the matter but of making no formal representations. He feels that it is not advisable at this stage of the negotiations to have New York stir up Washington too much. He also urged upon me the desirability of remaining in La Paz during the preliminary negotiations, principally on account of the psychological effect thereof. Dr. Calvo appeared confident that an adjustment would be arrived at without undue delay, the negotiations being facilitated by the Company’s having no desire to attempt to re-enter Bolivia and indicated that the Company would be satisfied to receive twenty-five cents on the dollar on its investment in Bolivia.
Mr. F. C. Pannill has not yet arrived in La Paz, but is scheduled here on May 15th.
Respectfully yours,