811.20 Defense (M) Bolivia/165: Telegram

The Secretary of State to the Chargé in Bolivia (Dawson)

275. Your 308 of May 9.6 As advised in our 257 of May 9,6 the 5 year guarantee of prices is satisfactory. It is also agreed in principle that the excess transportation costs referred to may be absorbed in some way by Rubber Reserve Company.

The fund referred to by you has been already agreed to in no. 177 of March 28 and no. 238 of April 27. It is contemplated that such fund would be expended under the direction of some United States governmental agency, and this was stated in our 238 of April 27.

The price premiums for volume were intended to be equitably related to present and potential volume of production on the same basis as in Brazil. Is there any feeling that the figure of 2500 tons and 4500 tons contained in 177 of March 28 are not equitable for this purpose?

While it is believed that the negotiations will be expedited through conversations with Guachalla here to give him background explanations which he in turn can pass on to his Government, it appears [Page 567]doubtful that he would be in a position to accede on the major points. In view of Ambassador Boal’s imminent arrival at La Paz and his first hand knowledge of the rubber situation here, it is suggested that this should assist in reaching a conclusion of the rubber agreement promptly and it is one of the first matters to be taken up by him.

Repeat to Lima as 421 for Allen.

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