811.20 Defense (M)/1489: Telegram

The Ambassador in the United Kingdom (Winant) to the Secretary of State

1120. For Feis. The British Treasury is concerned about the request of the Metals Reserve Company, made through the Department, that the conclusion of its negotiations with Bolivia for a payments agreement be postponed and it would very much appreciate if the matter could be given immediate consideration by us. The British Treasury has written informally to the Embassy recounting the history of its negotiations and the concluding two paragraphs are as follows:

“In October the Treasury and the Bank of England sent out to La Paz a special representative, J. Phillimore, who has been carrying [Page 483] through the negotiations with all the Bolivian interests concerned. On the 14th February all the material points of difference having at last been composed, we sent him, at his request, a draft text of the inter-governmental agreement and we sent a copy at the same time to Washington for communication to the State Department.

“Things were boiling up for the moment of signature and Phillimore was making arrangements for his departure to Buenos Aires when we received from Lord Halifax a telegram saying that he had been approached by the State Department who told him that the M.R.C. had been studying the draft text of our agreement and ‘would greatly appreciate ample further opportunity to consider its bearing on American plans before it is concluded.’ You will appreciate the very embarrassing position in which this request places us. Throughout the negotiations we have tried to keep in touch with Washington and we sent our Embassy the draft of our complete agreement as much as 5 weeks ago. An interruption of the negotiations at this eleventh hour might quite easily undo our efforts over the last 8 months and wreck the whole agreement. It was extremely difficult to find a wording which, to the lawyer’s eye, safeguards in cast-iron form the interest of the Bolivians, the M.R.C., and ourselves, but looking at it from the practical point of view, one can say in three words that we have every desire to recognize the requirements of the M.R.C. and to collaborate fairly and sportingly with them and that, once the Bolivian factor is eliminated, and the agreement signed, any dubious points as between the M.R.C. and ourselves could be quite appropriately and conveniently covered by notes exchanged at Washington. We do not know yet precisely in what articles of the draft text the M.R.C. see grounds for misgiving but in all honesty we can say that we have not the faintest thought of stealing a march on them, and that our only urgent desire at this moment is to tie up the Bolivian output (i.e. as I have said above between the United States and the United Kingdom) so that at least the triangle becomes a straight line and the M.R.C. and ourselves can work out points of detail without reference to South America.”