811.20 Defense (M) Bolivia/4a: Telegram

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

169. Metals Reserve Company has been negotiating with Mauricio Hochschild and with the Bolivian Minister as the representative of the Banco Minero for the purchase of the entire production of Bolivian zinc, lead, and antimony. Contracts for the purchase of the entire zinc and lead production have now been agreed upon and both sides are ready to sign. An integral part of the arrangement is that there be control of exports of these products. Your despatch 999 [994] of August 1296 indicates that the Supreme Decree described in paragraph 5 of the note from the Minister of Foreign Affairs is to be issued in the near future. It is accordingly suggested that you consult the Bolivian authorities and telegraph whether upon the signature of (1) the contract between Metals Reserve and Hochschild for the purchase of the Huanchacha zinc and lead; and (2) the contract between Metals Reserve, Hochschild and the Bolivian Minister as to the lead other than the Huanchacha lead, the Bolivian Government will

Issue the Supreme Decree above referred to, and
Exchange diplomatic notes with you whereby the Government of Bolivia will agree to prohibit the export of zinc and lead during the life of the contracts with Metals Reserve except to the United States, other American republics having systems of export control satisfactory to the Government of the United States, and the British Empire.

The negotiations for the purchase of the antimony are in deadlock because of price. Since the antimony production in Bolivia is widely scattered, it seems appropriate not to negotiate this contract with Hochschild. It is accordingly suggested that you consult with Altshuler, Metals Reserve representative in La Paz, and begin negotiations in collaboration with him with the Bolivian authorities looking forward to an agreement whereby the Metals Reserve Company will buy the entire antimony production of Bolivia at the current rate until February 1, 1943, except such part thereof as may be sold to Great Britain, provided that there be established immediately an export control system similar to that to be provided for lead and zinc prohibiting the export of antimony except to the United States, other American republics having satisfactory systems of export control, and the British Empire. In the negotiations with Hochschild here [Page 462] he suggested a price of $2.05 per metric ton unit. Metals Reserve considers the highest which should be paid is $1.95 per metric ton unit f.o.b. Arica and believes it should be possible to obtain a price of $1.90.

The Department is informed that there have been various shipments of Bolivian tin to the Axis including shipments in June and July from the Banco Minero to itself at Kobe. In view of the purchase agreements with the Metals Reserve and the British, please attempt to obtain the inclusion within the export embargo referred to above of tin allowing it to go only to the United States, other American republics having export control systems satisfactory to the United States Government, and the British Empire.

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