824.6363 St. 2/560a: Telegram

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

39. Your 13, January 7, 7 p.m. The Bolivian Minister of Foreign Affairs informed Mr. Welles at Rio de Janeiro that he had been authorized by the President of Bolivia42 to enter into an immediate arrangement for the settlement of the Standard Oil dispute. He presented the draft of a suggested Agreement between the Bolivian Government and the Standard Oil Company in which provision was made for payment of a specific amount to the Company for all of the rights, interests and properties in Bolivia of the Company and its Bolivian subsidiary. The Minister of Foreign Affairs suggested that the total amount of the payment might be $1,000,000.

After discussion of the matter between the New York office of the Standard Oil Company, Mr. Metzger43 in Rio de Janeiro, Mr. Welles, the Department, the Bolivian Minister of Foreign Affairs and presumably the Bolivian Government, certain modifications in the form of the Agreement were made. The Standard Oil Company has now informed the Department that arrangements were completed for the signature on January 27 of the following Agreement44 signed by the Bolivian Minister of Foreign Affairs on behalf of the Bolivian Government and by Mr. Metzger on behalf of the Standard Oil Company of Bolivia and the Standard Oil Company of New Jersey:

“The Government of Bolivia will pay to the Standard Oil Company (New Jersey) the sum of $1,500,000, United States Currency, at the State Department in Washington, for the sale of all of its rights, interests and properties in Bolivia and those of its subsidiary, Standard Oil Company of Bolivia, as they existed immediately prior to March 13, 1937 and likewise for the sale of its existing maps and geological studies which are the result of its explorations in Bolivia. This payment will be made with interest at the rate of 3 percent per annum, from March 13, 1937, within 90 days from the date of the Supreme Resolution of the Republic of Bolivia putting this Agreement into effect.

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“The Government of Bolivia, the Standard Oil Company (New Jersey), and the Standard Oil Company of Bolivia declare that upon the payment of the amounts referred to immediately above, no issue will remain pending between them and that there will be no occasion for any claims or counter-claims of whatsoever character, since the fulfillment of the present agreement, which has been freely entered into, shall be regarded as having terminated satisfactorily and amicably all the differences between the Bolivian Government and the companies.

“Signed in duplicate in Spanish and English at Rio de Janeiro, Brazil, on January 27, 1942.”

The Standard Oil Company informed the Department that it was its understanding that the Bolivian Government intended to put the Agreement into effect by a decree and without consulting the legislative branch of the Bolivian Government. Please use your influence in every appropriate and tactful way to press for the immediate issuance of the supreme decree that will terminate the Standard Oil problem in Bolivia.

While it is assumed that the Agreement was signed in Rio de Janeiro on January 27, the Department has not received final confirmation of this fact.

Hull
  1. Gen. Enrique Peñaranda y del Castillo.
  2. H. A. Metzger, Standard Oil Company representative in Rio de Janeiro.
  3. For the Spanish text of the agreement and the resolution of approval by the Council of Ministers of Bolivia, see Boletín Oficial del Ministerio de Relaciones Exteriores, No. 9, January–April 1942, p. 129.