800.6354/353½
Memorandum of Conversation, by the Adviser on Political Relations (Duggan)
The Ambassador2 informed me of the receipt by him this morning of the following information from his Government with regard to the renewal of the International Tin Agreement.
The International Tin Agreement was renewed last September subject to ratification by each Government. The Bolivian Government, although it received a basic quota of 46,000 tons under this Agreement, was on the point of ratifying it by decree when war broke out in the Far East. After the outbreak of war there was little interest shown by the British officials concerned for ratification.
Very recently, however, the, Bolivian Government has been pressed by the British Government to accept the agreement. The Bolivian Government is prepared to accept the agreement under two conditions.
In the first place, the Bolivian Government desires to ratify the agreement with a reservation to the effect that quotas should be reviewed at such time as the status of the Malayan Straits and the Netherland East Indies is again regularized, since only then will it be possible to determine the actual productive capacity of those territories. In the meantime Bolivia will have greatly increased its production. It would be obviously unfair if Bolivia, at the expiration of the war and prior to the termination of the agreement, were to be set back to 46,000 tons after having developed production at the request of the United Nations.
In the second place, the Bolivian Government will ratify the agreement subject to the reservation mentioned above provided that it is advised that the contract is inoperative between the Metals Reserve Company and the International Tin Committee whereby the Metals [Page 516] Reserve purchased 100,000 tons of tin at 50 cents subject to the existence of the International Tin Agreement. The Ambassador explained that the reason for his Government’s position was that, in accordance with the contract between the Bolivian producers and the Metals Reserve Company, the Bolivian price is dependent upon the price provided for in this contract for 100,000 tons. Bolivia is to get 48½ cents. It is impossible profitably to produce tin in Bolivia today at 48½ cents.
The Ambassador concluded that his Government had just been advised that there would be a meeting on Friday, April 10, in London, of the International Tin Committee. The purpose of this meeting was to renew the International Tin Agreement. The Bolivian Government has as much as been told that if it objected to the terms agreed upon last summer, the Agreement would be renewed whether or not the Bolivian Government liked it. The Ambassador pointed out that it would be possible for the British to line up the delegates representing the Malayan Straits and the Netherland East Indies who now actually represented nothing. The Ambassador said that in his opinion the holding of this meeting was a maneuver on the part of the British to place the Bolivian Government in a difficult trading position in connection with the negotiations which he had opened under instructions from his Government for an increase in the tin price. If the agreement is renewed and the contract between the Metals Reserve and the Committee, for 100,000 tons, is deemed valid and operative then Bolivia is to receive 48½ cents. The Ambassador stated firmly that his Government would never accept any such price. He reiterated that the projected holding of this meeting was a maneuver on the part of the British. He thought this was indicated by the fact that the date of the meeting had been advanced from April 15 to April 10. He asked for the friendly assistance of this Government to prevent a situation arising which was impossible for his Government and could only result in difficulties all around. Specifically, he hoped that the date of the meeting could be postponed until time could be afforded to work the matter out and that he could be advised that the contract between Metals Reserve and the International Tin Committee for 100,000 tons had been canceled.
I told the Ambassador that I would see that his representations were given immediate consideration and that he could rely upon this Government’s not permitting a situation to develop where it appeared to the Bolivian Government that it was being presented with a fait accompli in order to make Bolivia’s trading position more difficult.
- Luis Guachalla, Bolivian Ambassador.↩