824.6354/309
The Department of State to the British Embassy
Memorandum
In view of the fact that present Bolivian tin production falls considerably short of the permissible export quota for Bolivia now obtaining under the International Tin Restriction Scheme (130 per cent of standard tonnage), it would be possible for the permissible export quota for Bolivia to be substantially reduced without requiring a reduction in the present level of Bolivian production. In such circumstances, however, the formula suggested in the British Embassy’s Memorandum of February 6, 1941 might actually result in an obligation on the part of Bolivia to deliver a larger proportion of its production to British smelters than it will deliver in the twelve months ending June 30, 1941. Correspondingly, unless it were possible to increase production, Bolivian producers would be unable to fulfill their obligations to Metals Reserve Company, although actual [Page 479] Bolivian production would not have been decreased by any action of the International Tin Committee.
It is not believed that this was the intent desired to be accomplished by the formula proposed. The difficulty referred to above would be avoided were the clause to be worded as follows:
“In the event that the export quota of Bolivia under the International Tin Restriction Scheme is reduced below the amount of present Bolivian production, then the tonnage of tin metal in the ore to be made available from Bolivia to the United Kingdom shall bear the same proportion to the total exports of tin metal permitted to Bolivia under the International Tin Restriction Scheme as exports to the United Kingdom bear to total Bolivian production during the twelve months ending June 30, 1941.”
The foregoing suggestion is parallel to the language and intention of Article 2 of Metals Reserve Company’s contract with Bolivian producers, and would have as its effect the assurance that at the present level of Bolivian production or at any lower level, Bolivian exports would be divided in roughly equal amounts between the United Kingdom and the United States.