824.6363 St2/243

Memorandum of Conversation, by the Chief of the Division of the American Republics (Duggan)

I spoke with the Minister further about the Standard Oil difficulty. The Minister defined somewhat more precisely the exact nature of the proposal which he had urged upon his Government. The Minister stated that he doubted whether it would be politically feasible for his Government to submit this controversy to an international arbitration. It is his idea that the Supreme Court in acting upon the appeal which he indicated he presumed the company would file prior to March 22 should state that the decree of March 22, 1937, was not well founded in law, but that there were valid reasons for a recession [recision?] of the contract. This decision would uphold the cancellation of the contract but would in fact indicate that there was no ground for expropriation of the company’s property. Thereafter the Government and the company would negotiate for a sale which the Minister indicated he thought could be arrived at without undue difficulty if the company has not set too high a price on the properties.

I indicated to the Minister that this was a somewhat different approach than that which I understood Mr. Welles had talked with him about. He agreed with this statement and said that he felt it was much more realistic considering the political situation and the temper of the Bolivian people with regard to the Standard Oil controversy.

I endeavored to draw the Minister out as to whether he would be willing to support before his Government a suggestion for an extension of the time given to the company in which to file its appeal. The Minister was not responsive to the suggestion along this line.