Memorandum of Conversation, by Mr. Roy Veatch of the Office of the Adviser on International Economic Affairs

Participants: Señor Guachalla, Bolivian Minister.
Mr. Feis.12
Mr. Yeatch.

Mr. Feis referred to the many discussions that have taken place over the past few years regarding the possibility of smelting Bolivian tin ore in the United States. He recalled that in the past difficulties had always prevented any progress toward establishment of a tin smelting industry here in spite of the good will of all those concerned. He said that it now seemed possible to explore the matter again since this Government now has authority to make funds available to assist tin smelters here if a feasible program can be worked out. Mr. Feis went on to say that the Reconstruction Finance Corporation, under new powers arising out of legislation just adopted, is prepared in principle to establish or to assist in establishing a tin smelting industry in the United States. The government agencies concerned are exploring the various alternative means of achieving this end with the purpose of determining whether this objective can in fact be achieved, and if so, the most effective and expeditious means of doing so.

Mr. Feis then said that one of the essential factors would, of course, be an assured supply of tin ore from Bolivia and he asked the Minister therefore whether he would be in a position to discuss this factor with his Government and to report back to the Department regarding the measures that could be taken in Bolivia to give such assurances.

Señor Guachalla said that he would immediately take this matter up with his Government. He was certain that his Government would be prepared to give such assurances. He said that all of the producers of tin ore in Bolivia other than the Patiño Company are now quite anxious to sell their ore to the United States and their production, some 55 percent of the total, could certainly be counted upon. With respect to the Patiño interests, however, he had considerable doubt since those interests have been pressing the Bolivian Government to [Page 525] provide that all exports of Bolivian tin ore should be routed to the smelter in England controlled by those interests. He feared also that the Patiño group have already reached some understanding with the German interests since the Bolivian Government has been informed by Patiño that even a German victory would not interrupt the operations of the smelter in England.

Señor Guachalla said that if necessary his Government would be prepared to establish a control of exports of tin ore which would license shipments only to the United States.

Mr. Veatch referred to the considerable period of discussion which had been carried on between the Bolivian Government and the tin producers regarding the relation between the miners and the Government, and to the progress which had been made recently in removing the points of difference between them, and he expressed the hope that the cooperation of all the producers could be secured in the event that a tin smelting industry was established in the United States; he ventured the opinion that this Government would not wish to have the discussion of such a program result in further conflict between the Bolivian Government and Patiño or other tin producers. With respect to this aspect of the matter, however, Mr. Feis emphasized that the relations of the Bolivian Government and the Patiño interests were solely the concern of the Bolivian Government.

Señor Guachalla said that of course it would be desirable to secure the voluntary cooperation of the Patiño interests if possible and in this regard he stated that he was informed that Señor Linares, son-in-law of Don Simon Patiño and in charge of his London office, is now seeking visas for himself and family to leave London and come to the United States immediately. Señor Guachalla suggested that Señor Linares might be helpful in negotiations with the Patiño interests regarding smelting in the United States.

Señor Guachalla was informed that Mr. Jesse Jones, Federal Loan Administrator, had designated Mr. Charles B. Henderson, a Director of the Reconstruction Finance Corporation, to engage in the necessary discussions with regard to a program for smelting tin in the United States. It was agreed therefore that a conference should be arranged within the next few days between the Minister and Mr. Henderson. It was understood that a conference would later be arranged between the Minister and Mr. Jesse Jones.

It was agreed further that whenever the Minister should receive word from his Government, regarding ore supplies, he should telephone the Department. He was told that in the meantime the Department and the Reconstruction Finance Corporation would continue discussions with American smelting interests that might be interested in the smelting of Bolivian ore.

  1. Herbert Feis, Adviser on International Economic Affairs.