824.6363 St. 2/579: Telegram
The Chargé in Bolivia (Dawson) to the Secretary of State
[Received 5:44 p.m.]
141. For the Acting Secretary. My 127, March 3, 5 p.m.47 Foreign Minister inquires whether it would be possible to use blocked sterling funds of Bolivia in Great Britain arising from sales of Patiño48 tin for payment to Standard Oil.
He says that payment will be made in any case but that he desires if possible to forestall criticism by pointing out use of blocked funds constituted benefit to Bolivia. I have told Minister that I do not consider his suggestion practicable but he has requested me to take it up personally with you. Please instruct me what reply you wish made.
I see utterly no merit in suggestion for the following reasons:
- 1.
- Doubt as to whether British and Standard Oil would agree, and inevitable delay in making payment which would result from necessary quadripartite negotiations;
- 2.
- Fact that so far as I can ascertain Bolivia does not have on hand sufficient blocked sterling to cover Standard Oil payment, having disposed of most of last year’s accumulation to neighboring countries under clearing agreements and would thus in effect be trading on futures;
- 3.
- Further fact that it has large surplus of dollars available.
If question were to be raised it should have been done at Rio de Janeiro. My feeling is that if, as expected Export-Import Bank petroleum credits are forthcoming before Congress meets in August, opposition which Bolivian Government professes to fear will by then have become unimportant and that letter suggested in my 127 is adequate support for Government in the meantime.
Idea of utilizing blocked sterling funds for Standard Oil payment originated in fertile mind of Finance Minister.49 What he is really [Page 590] interested in is insuring freeing of all funds of this sort, future as well as present. Legation and Economic Mission51 have given consideration to means whereby this might possibly [be] done to mutual advantage and will discuss it in a despatch but feel that it has no place in the Standard Oil settlement.