740.00112A European War, 1939/5953
The Chargé in Bolivia (Dawson) to the Secretary of State
[Received January 9.]
Sir: I have the honor to refer to the Legation’s despatches Nos. 1422 and 1445 of December 12 and 15, 1941,95 in connection with the Supreme Decrees of December 10, 11 and 12, by the terms of which the funds of those German, Italian and Japanese firms included in the Proclaimed and Statutory Lists for Bolivia were supposed to have been frozen by the Bolivian Government and to report that lax administration of the decrees has nullified almost completely their expected effects.
In the first place, the interventors who were supposed to have been appointed to control the operations of these firms have not been named; although it was not expected, even by Bolivian Government officials, that really effective control would be exercised by these interventors, their appointment would have been at least an indication of an attempt at proper administration of the decrees by Governmental authorities. In the second place, far from effectively freezing the funds of such listed firms, local banks have now been authorized by the Ministry of Finance to discount notes for them and to lend them money; an example of this is a note in the amount of Bs. 476,075 discounted by the Banco Central on December 29 for Kyllmann Bauer y Cía.96 According to the authorization of the Ministry of Finance banks may now extend loans to listed German, Italian and Japanese firms as long as such loans are made “under control”; the fact that there is no machinery for such “control” seems not to have been considered by the Ministry.
The reason offered by the Ministry of Finance and the local banks for their failure to enforce the freezing order is that many of the firms whose funds are supposedly blocked are so important to the economy of the country that their operations must be permitted to continue. While in some few cases this may be true and a reorganization of certain firms may be desirable in order to eliminate their undesirable elements and to permit their continued operation, it is not believed that the Bolivian Government’s failure to at least attempt an enforcement of its freezing order can be excused on these grounds.
[Page 616]The Legation is of the opinion that … this situation can be corrected and a more effective control exercised over local firms included in the Proclaimed List. (Reorganization would, of course, be one of the possible measures of control.) However, it is my opinion that it would be desirable to delay conversations on the subject with responsible officers of the Bolivian Government until after the Consultative Meeting of the Foreign Ministers of the American Republics scheduled for January 15 in Rio de Janeiro.97 ff, as is to be hoped, a concerted stand is made by the South American countries, including Bolivia, against the Axis powers, it is believed that effective action by the Bolivian Government against Axis firms within the country can much more easily be encouraged.
It is trusted that the Department will approve my delaying action in this matter until after the Rio de Janeiro meeting.
Respectfully yours,