Office of the Historian

824.50/228

Memorandum by the Chief of the Division of the American Republics (Bonsal)

[Washington,] February 2, 1943.

Bolivian Development Corporation

I informed the Bolivian Ambassador56 this morning that the informal soundings of opinion which I had made both in the Depart ment [Page 555] and the Export-Import Bank regarding the proposal to transfer to the Bolivian Development Corporation57 the credit of $1,700,000 made by the Bolivian Banco Central in connection with the Standard Oil settlement58 had shown conclusively that those consulted were adverse to the idea. I said that it seems highly undesirable to make a change in the conditions agreed upon between the two Governments since quite evidently no new circumstances had arisen since the negotiation of these arrangements.

The Ambassador was somewhat disappointed. He said that the Bolivian Government had been obliged to undertake to refund the Standard Oil payment through the Central Bank in two annual installments, one of which, I understand, was paid in 1942 and the other will be due toward the end of 1943. These payments together with the Government’s obligations in connection with the Corporation amounting to $3,500,000 per annum will, according to Espada,59 put the Treasury in a rather difficult situation.

The Ambassador will communicate our point of view to his Government. He also suggested that it be made known by the Bank to Mr. Egger,60 who will undoubtedly be approached by the Bolivians on this subject. (I suggest that this be arranged with the Bank by Mr. Collado or Mr. Hooker.61)

I expect to hear about this again. In my conversation with the Ambassador I did not refer to the political angle, namely the linking of the Standard Oil settlement with our willingness to extend economic cooperation. The Ambassador did, however, allude to this point and emphasized the Government’s political vulnerability on this score.

It is my impression that the Ambassador in bringing this matter up was merely carrying out his instructions and that he understands our position clearly.

Philip W. Bonsal
  1. Luis Fernando Guachalla.↩
  2. An agency of the Bolivian Government with American participation in its management.↩
  3. For correspondence on this settlement, see Foreign Relations, 1942, vol. v, pp. 586 ff.↩
  4. Joaquin Espada, Minister of Finance.↩
  5. Rowland A. Egger, Manager of the Bolivian Development Corporation.↩
  6. Emilio G. Collado and John S. Hooker, members of the Secretariat of the State Department’s Board of Economic Operations.↩