811.20 Defense (M)/1466: Telegram

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

19. Your despatch no. 698, March 11. The discussions regarding tungsten purchases between the Federal Loan Administrator90 and the Bolivian Minister came to a pause over the matter of price. The [Page 456] Federal Loan Administrator had offered $16.50 per unit for all Bolivian production during the next 2 years and for the third year had offered market price with a minimum of $14 and a maximum of $16. The Minister stated that his Government found these terms not sufficiently favorable. He stated that his Government was apparently impressed with the opportunities for immediate sale in this country and elsewhere at a higher price.

The Department was reluctant to see this break in negotiations and therefore persuaded the Federal Loan Administrator to consider an improvement. It is now informed that on the 18th of March Deputy Loan Administrator Clayton told the Minister that if his Government would make an offer to sell for $17 per unit during the first 2 years and on the terms described above for the third year Clayton would do his best to persuade the committee to accept. Nothing further has been heard from the Minister.

This information is for your background knowledge in order that you may clear up any mistaken or prejudicial reports. Within your discretion, also please do anything possible to induce the Bolivian authorities to make the suggested offer. According to the Minister, the difficulty lies with the mining interests rather than with the governmental authorities.

These mining interests should be cognizant of the general benefits accruing to them from the tin purchase contract and from the various other aids which this Government has been extending to Bolivia.

  1. Jesse H. Jones.