824.24/443
The Chargé in Bolivia ( Dawson ) to the Secretary of State
[Received May 8.]
Sir: I have the honor to refer to my telegram No. 270 of April 24, 5 p.m., with regard to an interview with the Bolivian Minister of Foreign Affairs, Dr. Eduardo Anze Matienzo, in which he made certain complaints concerning the Bolivian Government’s dissatisfaction, based on reports of General David Toro, Chief of the Bolivian Military Mission to the United States, with the progress of arrangements for Lend-Lease aid to Bolivia and other matters involving military cooperation. These complaints were outlined in a telegram to the Bolivian Embassy in Washington with instructions for them to be taken up with the Department.
The Foreign Minister appeared particularly perturbed over a statement from General Toro that the amount of aviation equipment to be turned over to Bolivia under Lend-Lease has been cut from a value of $3,000,000 to one of $1,000,000 and that only some 36 planes will be covered by this latter sum. He stated that what Bolivia needed was airplanes and anti-aircraft artillery and that this news was most disappointing. He also referred to a commitment which he said had been made to him by the Under-Secretary at the Rio de Janeiro Consultative Meeting to the effect that all that Bolivia needed for protection of its mines would be made available to it and that this would be done at the expense of the United States, not under Lend-Lease. The Minister said that this alleged commitment covered the anti-aircraft artillery his Government wanted but that General Toro had advised him that the United States Army authorities with whom he was dealing had insisted it would have to come out of Lend-Lease, that delivery would be much delayed and that they were not prepared to agree to turning over as much of such material as was essential.
While the Legation is not informed of the nature of the conversations on the subject between Mr. Welles and Dr. Anze Matienzo at Rio de Janeiro, it seems possible that the latter misunderstood the tenor of the Under Secretary’s remarks. It would be of assistance in overcoming the somewhat unreasonable attitude of the Bolivian [Page 531] authorities if the Legation could be advised what commitment, if any, was made. It would also be appreciated if the Legation could be informed as to the nature of the cut from $3,000,000 to $1,000,000 mentioned by the Foreign Minister. As the Lend-Lease agreement of December 6, 1941, called for deliveries of not more than $3,000,000 in the first year, to cover all matériel, it occurs to the Legation that what may have happened is that the Army has informed General Toro that not more than $1,000,000 worth can be supplied.
This morning, the Assistant Military Attaché of the Legation called on the Minister of Defense, General Miguel Candia, and was met with complaints similar in nature to those by the Foreign Minister to me. On the subject of planes, the General insisted that it was necessary that all of the 36 planes now promised should be delivered in Bolivia by some time in July so that he could have them all in the air for a monster parade and review he is planning for August 6, 1942, the Bolivian national holiday. He also insisted on the need for additional aviation equipment up to a value of $3,000,000 at a later date. How the 36 planes would be gotten to Bolivia in view of the shipping shortage or how they would be flown on August 6th when Bolivia does not have 36 properly trained military pilots was not touched on by the General.
The General also discussed the Bolivian Army’s alleged need for anti-aircraft artillery although he did not mention the supposed commitment made at Rio de Janeiro for this to be paid for entirely by the United States. This idea of anti-aircraft defense is an idée fixe with the Bolivian military authorities who pretend to envision attacks from Japanese carriers on Bolivia’s mines. Actually, of course, the worst vulnerability of these is to sabotage, to guard against which the Bolivian Government has taken few measures. …
In the conversation between General Candia and the Assistant Military Attaché this morning, the latter made reference to a telegram he had just received from the War Department to the effect that the members of the Military Instruction Mission had been chosen and would be ready for departure for Bolivia as soon as the contract for their services was signed. To this the General replied that the present military school year was far advanced and that he consequently did not want the Military Instruction Mission until the beginning of the next school year, in February 1943. The Department will note that this stand is completely at variance with the complaints of General Toro and the Foreign Minister and their insistence that the Mission be sent at once. This lack of coordination in the Bolivian Government is not unusual.
It has just been learned reliably by the Legation from a confidant of the Minister of Defense that an offer has been received by the Bolivian Government from Argentine sources for the purchase of the old [Page 532] Junkers equipment now in the hands of the Bolivian Army. This equipment consists of two JU–86’s, one equipped as a transport and the other as a bomber but convertible easily into a cargo carrier, plus the remnants of two or three Junkers which have been in accidents but something from which could be salvaged. The Argentine offer is said to have stated that the planes would be used in Bolivia. If this provision were serious, the only answer which occurs to the Legation is that the Argentine interests have plans for starting some sort of an air line in lowland eastern Bolivia (the JU–86’s are not adapted to altitude flight such as would be necessary for use on the plateau) possibly in part to carry the rubber they are trying to contract in competition with the Rubber Reserve Company. In any event, the opening of a new air line in eastern Bolivia would be in direct competition with Lloyd Aéreo Boliviano in which the United States has a direct interest since the line has been rehabilitated with funds furnished by the Defense Supplies Corporation and is managed by Pan American-Grace Airways.36
It occurs to the Legation that, in view of the Argentine offer, it might be advisable, before turning over to Bolivia any Lend-Lease matériel, to consider asking for a commitment that neither this nor any other Bolivian military equipment would be disposed of to another country or to foreign private interests (this latter suggestion might, however, be overcome should the Bolivians desire by having any Argentine purchasers organize in Bolivia as a Bolivian corporation). It will be remembered that there is a provision in the L. A. B. contract whereby its Junkers cannot be disposed of without consent of the Defense Supplies Corporation.
The Department will recall from its instruction No. 510 of March 16, 1942,37 to the Legation that the Bolivian Government has already sold at least $1,328,000 worth of rifles and rifle ammunition to the Free Belgian Forces and the British Government. This was obviously in anticipation of receiving Lend-Lease equipment which could replace it. It will be recalled further that, under the Lend-Lease Agreement, Bolivia is to receive $11,000,000 worth of matériel and repay not more than $2,000,000 over a period of six years. This readiness to take advantage of our proposed loan leads to the belief that the Argentine offer for airplanes might very easily be accepted if precautions to prevent it are not taken. In any event, the Legation feels that it would not be unreasonable to ask Bolivia to pay the $1,328,000 to the United States on Lend-Lease as the latter equipment is delivered instead of following payment schedules set forth in the Lend-Lease Agreement. [Page 533] Such procedure is, however, probably not practicable because of the terms of the Agreement.
The Department will also recall from the Legation’s telegram No. 287 of October 10, 1941,38 that the Bolivian Government signed a contract with one Henry Koopman, a German agent who, it has been learned, was acting for Japanese principals, for sale of the so-called scrap iron, held by the Bolivian Army including many usable trucks. In view of the Bolivian insistence on the need for trucks from Lend-Lease funds (see paragraph 2A of my telegram No. 43 of January 28, 6 p.m.38 and subsequent correspondence), this also does not have a particularly pleasant odor. As the Department was informed (see my despatch No. 1181 of October 10, 1941),38 the Koopman deal was put through despite the Legation’s pointing out in advance to General Candia that Koopman and his associates were suspected of being German agents. …
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Respectfully yours,