824.6354/283: Telegram

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

72. Department’s 35, September 12, 7 p.m. British Government has offered to pay in gold in Canada two-thirds of the value of tin shipments to England by Bolivian exporters who sign exclusive contracts with British smelting interests, remainder to be paid in sterling. For such treatment British stipulate that contracts would have to be approved by the Bolivian Government. Other tin shipments would be paid for only 50% in gold.

Patiño contracts [interests?] have signed such a contract and a Bolivian Government resolution approving it has been issued but the contract has been referred to Patiño directors in New York for approval and so has not yet entered into effect. Banco Minero is also understood to be about to sign. There seems to be no question as to receipt by Bolivian interests of two-thirds or half of purchase price in gold depending upon whether contracts are completed or not.

Minister of Finance apparently does not desire Hochschild or Aramayo interests or medium miners to enter into British contracts, counting on their production to cover with a margin the shipment of 1,000 tons a month to the United States if tin agreement with us is reached.

320,000 pounds sterling to which the Department refers is the Bolivian Government’s share of foreign exchange arising from tin deliveries in June and first half of July. British Treasury has offered to convert 50 percent of this into gold. Failure to receive this amount has been caused by Banco Central’s unsuccessful efforts to obtain more favorable terms on grounds that transactions arose before putting into effect of British exchange regulations on June 18. Banco Central [Page 537] obtained the equivalent of this exchange by 30 days credit of $600,000 from Chemical National Bank which is due in a few days.

Any information the Department could furnish the Legation in regard to the progress of tin negotiations would be appreciated.