824.51/960: Telegram

The Under Secretary of State ( Welles ) to the Secretary of State

39. For Berle.22 Your No. 38, September 30, 4 p.m. I have availed myself of the authorization contained in the last paragraph of the Department’s telegram to suggest to the Bolivian Minister for Foreign Affairs that he instruct Guachalla to take these questions up immediately after his return to Washington and that in the meantime no publicity whatever should be given to the fact that any further consideration is being given to these proposals in Washington. I have likewise made very clear to the Minister for Foreign Affairs the basic reasons underlying the decision reached by the Department. He is still firmly of the opinion that from the standpoint of expediency it would be easier for him to obtain a solution of the oil controversy by his Government if such solution were not made a condition previous to the reaching of an agreement on credits for exchange stabilization and on related matters. He is a man of fine character and real intelligence and I obtained the impression that while he is deeply chagrined by the reply I have had to give him he will nevertheless do his best to go along with us on the lines proposed.

He has shown me in confidence an official communication addressed to his Government by the Japanese Minister in Lima offering a barter arrangement for 3,000,000 tons [sic] of tin ore and certain other minerals in return for various classifications of Japanese manufactured goods. In his conversation with me on that subject the Minister has made it clear that while it was the general intention of his Government and especially of himself to try to find a satisfactory basis for an agreement with the United States, in the absence of such basis they would be “obliged” to make some such arrangement with Japan as [Page 322] that proposed, or with any other government that might make similar proposals.

As I see the situation with Bolivia at this time it would appear to me to be more urgent and critical than the impression in the Department. While I am entirely willing to concede that the prerequisites indicated in the Department’s telegram involve questions of basic principle which are sound and desirable it would nevertheless seem to me that if Bolivia at the present time were to involve herself in arrangements of the kind proposed by Japan and recently by Germany it would inestimably [inevitably] have a direct effect upon the political trend in Bolivia. I trust that the Department will give consideration to the possibility of finding some compromise which would make it possible to avoid this danger.

  1. Adolf A. Berle, Assistant Secretary of State.