824.6363 St 2/394
Memorandum of Conversation, by the Under Secretary of State (Welles)
The Bolivian Minister called to see me this afternoon at my request.
I told the Minister that no one could recognize and appreciate more fully than I the repeated and effective efforts he had made during the past year to find a fair and satisfactory solution of the difficulties which had arisen by reason of the cancellation by the Bolivian Government of the concessions of the Standard Oil Company of Bolivia. I told the Minister that I regretted deeply the fact that because of circumstances entirely beyond his control no basis for agreement had as yet been found, and that I feared that if no agreement were reached in the reasonably near future a very unfortunate situation would be created here in this country which inevitably would be prejudicial to the very friendly relations between the two countries which had existed over a period of so many years. I reminded him of the conversation which we had had in this regard a year ago and of our [Page 331] agreement at that time that every effort should be made to avert the creation of a strong prejudice on the part of public opinion in this country against Bolivia because of the apparent willingness of the Bolivian Government to take over properties legitimately belonging to American nationals without undertaking to make full and equitable compensation therefor. I said that we had both agreed that a situation of this kind would undermine confidence in the United States with regard to Bolivia and would prevent American cooperation and investment in the development of Bolivian natural resources, in which the Bolivian Government was so greatly interested.
I said it seemed to me that the time had now come when a further and a concerted effort should be made to find a basis for an agreement which would settle this controversy in a manner satisfactory to both sides to the dispute. I told the Minister that with this object in mind various conversations had been held, as he knew, in the Department of State with a view to furthering a solution. I said that I was now prepared to hand him, not officially as on behalf of this Government but unofficially as an evidence of the friendly interest which this Government had in paving the way for a solution, the draft of a suggested agreement which I earnestly hoped would provide the basis for the conclusion of a satisfactory negotiation between the company and his Government. Before doing this, however, I said to the Minister that I wanted to ask him a frank question, and that was whether in his opinion this was a propitious moment for these suggestions to be conveyed to the Government of Bolivia. I did not wish, I said, to take this step at this time if the Minister felt that no concrete results would be derived therefrom.
The Minister immediately replied that he thought the moment was in fact highly propitious. He said that, in the first place, since there was no Congress now in existence in Bolivia, the Bolivian Executive would determine a question of this kind without having to obtain the consent of the leaders of the various parties, which consent for political reasons might not be forthcoming. The Minister also said that another very favorable development was the fact that the new Foreign Minister, Señor Ostria Gutierrez, was an intimate friend of his and a man in whose integrity and energy he had entire confidence. He said that by chance only a day or so ago he had received a letter from the new Minister just before he left his present post for La Paz, in which he requested the Minister here to give him a full account of all pending matters between this Government and that of Bolivia “beginning first of all with the Standard Oil matter.” The Minister assured me that the new Minister for Foreign Affairs shared his own point of view completely and that I could be certain that anything that he, the Minister, recommended would be supported with energy and ability by his Minister for Foreign Affairs.
[Page 332]I thereupon handed the suggested basis for agreement33 to the Minister, who told me that he would immediately study it carefully and give me any suggestions that occurred to him before sending it on to his Minister for Foreign Affairs. The Minister said that the new Minister for Foreign Affairs would not arrive in La Paz until about July 1, and that consequently this would give him time to send a long and detailed recommendation, to be transmitted in draft.
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