824.6363 St 2/542

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

No. 788

Sir: I have the honor to refer to my despatch No. 739 of April 4, 1941, concerning the debate in the Bolivian Chamber of Deputies on [Page 475] the Standard Oil question, and to report that in the course of a conversation on various matters I had with Dr. Ostria Gutiérrez at the Foreign Office on April 26, he mentioned this case especially, and said he was afraid the Department did not realize what a serious matter it was in Bolivia and how bitterly the people generally and Army officers especially hated the company. He had done his best, he declared, to bring about a settlement, but one could see how difficult it was to do so. He felt the Department was too severe in the attitude it had adopted regarding loans, and said he was going to write a letter to Minister Guachalla in his own handwriting explaining the situation, and asking him to beg the Department if possible to put the Standard Oil case aside for the present so that the Government here would be in a better position to strengthen its relations with the United States. While Dr. Ostria Gutiérrez and the other Ministers undoubtedly have managed the Standard Oil proceedings in Parliament very badly, I really believe they did the best that they could, or at least the best to be expected of them, and I confess I agree with Dr. Ostria Gutiérrez that feeling against the company is very bitter indeed, and will probably continue to be so for a long time to come unless something can be done to clear up the fog now surrounding the whole affair.

The radical and German-bribed press has been using the Standard Oil as a basis for frequent attacks against Ostria Gutiérrez and other members of the Cabinet, and of course this does not help American-Bolivian relations. The Government means well, and, I am sure, would gladly settle the case along the lines the Department wishes, but it is a feeble and easily frightened Government and the opposition is much stronger than was expected. Moreover, this opposition is encouraged and assisted in every possible way by the Germans who are bent on destroying American influence in this part of the world, if they can.

Dr. Ostria Gutiérrez’s troubles in trying to settle the Standard Oil case are largely of his own making … At the same time, it does not seem wise on our part to allow a troublesome question like the Standard Oil case to remain open like a festering sore, if any means can be found to dispose of it, or ease it in some way. Of course if the Chamber follows the example of the Senate and approves the administration’s efforts to reach a settlement with the company, matters should clear up without any help on our part, but should the Chamber fail to take action before adjournment the end of this month, the whole question will be left open and in worse condition, from our point of view, than before the discussions in Congress started.

If this does happen, and I fear it will, it has occurred to me the Department may wish to consider some plan to put the position of our [Page 476] Government in a more favorable and truthful light in the eyes of Bolivians than it seems to be at present. For the moment, I confess I have no idea just what could be done except, perhaps, that the Department may give out a statement of a conciliatory sort and emphasizing that there is no economic boycott of this country, as has been alleged in some of the pro-German newspapers. I do not wish to suggest the Department should abandon its stand to discourage economic loans pending a settlement of the Standard Oil case, but only that something be done to try to alleviate the unfortunate impression now prevalent in Bolivia as a result of the discussions in Congress. Some such announcement might strengthen the hands of those friendly to us in the Government and tend to create a healthier atmosphere in American-Bolivian relations generally, which is highly desirable at this time.

Respectfully yours,

Douglas Jenkins