The British Embassy to the Department of State


We appreciate the friendly spirit in which the State Department have put forward the observations in their memorandum of March 25th.

We are sure that the State Department will appreciate our anxiety over our supplies of Bolivian tin ore which, up to the end of last year, had always been shipped almost wholly for smelting in the United Kingdom. Our position was fully explained by the British Embassy to the State Department last October. Quite apart from our natural desire to support a great industry, the maintenance of deliveries from Bolivia is of paramount importance during the war emergency as a valuable supply of metal and a means of conserving dollars.

For these reasons we were very greatly concerned at the news of the conclusion of the Metals Reserve Company contract in November, [Page 486] which meant a serious cut into this supply and these dollar assets; and we welcomed the assurance of the United States Government that they had no intention of taking more than a maximum of 18,000 tons per annum and would share with us any fall in exports necessitated by decisions under the tin restriction scheme. We do not therefore clearly understand paragraph 3 of State Department memorandum of March 25th.

We had no other consideration in mind when drafting the text of our agreement with the Bolivian Government and we can immediately reply to the questions contained in paragraphs 5 and 6 of the State Department memorandum of March 25th. In the conditions set out in paragraph 5 we should always be ready for full and cordial discussion with the United States Government, bearing in mind our necessity as to the supply of tin and dollars and our regard for our smelting interests and the long-established tin trade with Bolivia. As to paragraph 6, we fully recognise that the Metals Reserve Company smelter is a permanent undertaking and that the company will wish to reserve the right to renew their contract. We have had no thought, nor do we desire in any way to prejudice, such renewal.

As to paragraphs 1, 2 and 4, our primary object was to ensure that all Bolivian tin which did not go to the United States was secured for the United Kingdom. It is important to note that the assurance of the United States Government referred to in paragraph 3 above operates only vis-à-vis the Metals Reserve Company. It does not bind the Bolivian Government, nor the Bolivian producers, under their contract with Metals Reserve Company. For their maximum of 18,000 tons remains irrespective of the decisions by the International Tin Committee as to the total permissible exports from Bolivia, so long as the total is above 18,000 tons. In other words, if Bolivian exports were 18,000 tons, all of that would be sent to the United States under the existing contract; the United Kingdom would then get nothing. We doubt whether this vital point has been appreciated and it constitutes our primary reason for including Article 10 in our draft agreement. If the wording proposed in paragraph 2 of State Department memorandum of March 25th and the omission of Article 10 suggested in paragraph 4 were accepted we should have no guarantee, apart from the smelting contracts with individual Bolivian producers, for what they are worth, that any tin at all would come to the United Kingdom. That would be an impossible position.

We were able to persuade Patiño24 to conclude the long-term contract with United Kingdom smelters because he was satisfied that he had no alternative outlet; we have met him to the limit of our resources but we fear he would not scruple to tear up his contract if he saw the opportunity of better terms with the United States, and [Page 487] the wording which the State Department memorandum proposes would, we think, provide that opportunity.

In the light of the assurances given by the Metals Reserve Company that they have no intention of increasing their imports from Bolivia, and with this explanation of our position, including our ready acceptance mentioned above of the views expressed in paragraphs 5 and 6 of the State Department memorandum, we trust that their objection to our Articles 1 and 10 will be withdrawn.

In communicating the foregoing message, the Commercial Counsellor of the British Embassy enquired whether a satisfactory solution could not be found in the omission of the words “or in the United States” from Article 1 (as amended in paragraph 2 of the State Department memorandum) and the re-instatement of Article 10 as last revised; together with an exchange of notes covering the agreement reached with regard to paragraphs 5 and 6 and all other outstanding points.

  1. Simón I. Patiño, president of Patiño Mines and Enterprises.