824.6363 St 2/304: Telegram

The Secretary of State to the Minister in Bolivia ( Caldwell )

2. Your 5, February 2, 9 a.m. and 6, February 2, noon. Department’s understanding is that the legality of the decree of March 13, 1937 is the principal point at issue in the case now pending before the Bolivian Supreme Court.

If the decision should be in favor of the company the Department would, of course, expect the Bolivian Government either to restore the properties with reasonable compensation for damages suffered by the company, or payment by the Government of the value of the properties at the time of the taking in the event that it should decide to expropriate them.

It would, of course, be desirable if a friendly compromise settlement of all questions now at issue could be reached without awaiting a decision by the Court. It is not clear from your telegrams whether the Government is disposed to bring about such a settlement. If in your judgment it is so disposed, you may in an appropriate manner indicate to the Government that the Department would be glad to see such a settlement made. The method suggested under (b) of your despatch no. 430 of January 25 would seem to afford a way out of the difficulty. It might even be possible in such a settlement to avoid any discussion of the validity of the decree of March 13, 1937. This, however, is a matter for the consideration of the Bolivian Government and the company. Our principal interest is in promoting a settlement in such a way as may be both feasible and satisfactory. It might even be proper at some point in your discussions with the Bolivian Government to say that if the decision of the Court should be adverse to the company your Government might be under the necessity of asking for arbitration, but that it is, of course, desirous of avoiding such a situation if possible.

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The Department considers that fair compensation to the company will adequately protect its interests from any adverse effects of the decree in other countries where it has properties.

Hull