Foreign Relations of the United States: Diplomatic Papers, 1942, The American Republics, Volume V

824.50/166: Telegram

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

Washington, September 29, 1942—7 p.m.

693. Your 867 and 869 September 28.⁸⁵ Neither the Department nor the Export-Import Bank would wish to proceed with the Bolivian Development Corporation in the absence of Congressional approval. Furthermore, the Export-Import Bank would not be in a position to make funds available under the proposed contract without such approval. It seems clear from your telegram no. 865 of September 28,⁸⁴ from Article 18 of the draft contract between the Bolivian Government and the Corporation enclosed in the Department’s instruction no. 247 of August 27, 1942,⁸⁴ and from the Bolivian Ambassador’s note of August 14,1942 a copy of which was enclosed in instruction 223 of August 19, 1942⁸⁶ that Congressional ratification is essential to the functioning of the Corporation.

The Department and Rubber Reserve consider that the Rubber Agreement is already in effect and that it is not subject to Congressional approval. Should the Agreement be submitted to Congress and disapproved, the entire problem would have to be reexamined.

The Department perceives no direct relationship between the Rubber Agreement and the Development Corporation Agreements. However, the failure of Bolivia to carry out its commitments under the Rubber Agreement would necessarily have an unfavorable effect upon the entire program of economic cooperation.

It is desired that you keep the Department currently informed on all matters affecting the Corporation.

Hull

85. Neither printed; these telegrams indicated that the Bolivian Congress had not acted and that the Ambassador was in doubt as to whether the agreements were in force (824.50/166, 811.20 Defense (M) Bolivia/443).
84. Not printed.
84. Not printed.
86. Instruction not printed.