824.6363 St 2/543

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

No. 801

Sir: In connection with my despatch No. 788 of April 28, 1941, concerning the Standard Oil case, I now have the honor to report that the Bolivian Congress adjourned on April 30 without any action having been taken by the Chamber of Deputies on the Government’s proposal to settle this matter.

I called at the Foreign Office on May 3rd about another question, and I took advantage of the opportunity to mention the Standard Oil case to Dr. Ostria Gutiérrez. I pointed out that the Chamber had failed to vote on the Government’s plan and asked him what he thought would now be done toward a settlement. The Minister shrugged his shoulders and said he did not know. The Government had done everything it could, he said, to try to arrange for a settlement, but without success and he believed it would be best for all concerned if the case could be allowed to rest “until the end of the war”.

While I do not think the Department should abandon its position in insisting upon some sort of settlement, I am prepared to admit I entertain little or no hope that the present regime will do anything more in the case, and I am inclined to agree with Dr. Ostria Gutiérrez that we may just as well let it rest in abeyance until there are changes in the personnel of the Cabinet which may lead to the expectation of a more vigorous policy in the foreign affairs of Bolivia.

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As I pointed out in a previous despatch, the difficulties of the Minister of Foreign Affairs are increased by the fact that German influence is brought to bear on the radical opposition in parliament and the pro-Nazi press and everything is being done by these elements to frustrate the Government’s plans for better relations with the United States. The administration lacks the courage and determination to put up a vigorous fight, and I am inclined to suggest that, while the policy of discouraging ordinary loans is continued, it may be a good idea to look with favor upon loans for the construction of certain highways and also perhaps to assist the Army in the purchase of equipment.

I do not wish to suggest, however, that loans of this sort should be made without the most careful consideration, and if money is advanced for the construction of highways, for instance, I believe it should be provided that the work would have to be done under the direction of American engineers and all machinery and supplies purchased in the United States. And as to a possibility of a loan for military purposes, it goes without saying that we should first be sure of the friendliness of the Bolivian General Staff and leading officers before any steps could be taken in that direction. Granted the proper conditions, I believe that assistance in the construction of highways in this country would tend to build up a friendly feeling for us amongst the Bolivian people, and, as has been already pointed out by the Legation, everything within reason should be done to win the good will of Bolivian army officers who are the most important political factor in Bolivia at this time.

I should be glad to know whether or not the Department considers these suggestions at all feasible.

Respectfully yours,

Douglas Jenkins