811.20 Defense (M) Bolivia/316: Telegram

The Ambassador in Bolivia (Boal) to the Secretary of State

631. For Duggan32 and Finletter. Reference Department’s telegram No. 532, August 11 [10], 8 p.m. The Foreign Minister assured me this morning that his Government would carry out the Rubber Agreement scrupulously; that no more than a proportionate part of the 250 tons for this year specified in the agreement would be exported for the period July 15 to December 31; that all existing contracts would be called in for revision in order that Rubber Reserve could take over such as they have delivered; that hoarding of rubber by cloaked German interests would not be permitted and a decree implementing the Rubber Agreement had been signed. This decree, I gather, is the one which was drafted by the Government in consultation with Roberts and is not wholly satisfactory. The Ministry for Foreign Affairs confidentially ascribed the present difficulties to the extensive issuance of export licenses in Crespo’s name just prior to the signing of the agreement.

He read me a telegram that he had just sent to Crespo which is in the sense of the above conversation as regards the Bolivian Government’s intention with respect to carrying out the Rubber Agreement.

[Page 584]

I am telegraphing separately en clair under telegram No. 63233 the Spanish text of the legalized copy of the decree which has been transmitted to me by the Foreign Minister this afternoon.

I believe that Rubber Reserve can proceed under this decree, however, to examination and acquisition of existing contracts with the Ministry of Economy. As I anticipate that there will be further difficulties arising out of the interests of contract holders and the large number of export permits granted, I respectfully recommend that some form of contingency clause be included in agreements favoring Bolivia in Washington so that continuance from month to month of prices and benefits will depend upon faithful execution of rubber agreement here. It is also recommended that Crespo be impressed with the desirability, when he arrives here, of securing the issuance of a decree in substitution of the one under reference conforming to the outline satisfactorily concluded with the Foreign Minister on August 8.

I gather that the Foreign Minister himself had no objection to that form and that the difficulty lay rather in the Ministry of Economy. I shall telegraph tomorrow whether or not the decree given in my telegram 632 has been published here.

  1. Laurence Duggan, Adviser on Political Relations.
  2. Not printed.