811.20 Defense (M) Bolivia/1378: Telegram

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

779. Paz Estenssoro,45 who as Finance Minister controls with the Minister of Economics the national quinine factory, telephoned Wynn, acting special representative FEA on March 31, and said since he was terminating his duties in the Ministry at close of business March 31 and because of important new developments in any quinine situation affecting previous assurances transmitted to Wynn by the Junta he would like Wynn to discuss this situation informally with Villarroel46 and himself. In view of the great importance of quinine to the war effort Wynn agreed. In the ensuing conversation Villarroel stated:

That he had previously sent Wynn assurances that no sulphate would leave Bolivia except to the United States;
That no sulphate has left Bolivia this year so far except to the United States;
That the Argentine Ambassador47 has been practically living at the palace insisting that Argentina needs sulphate from Bolivia and has finally advised Villarroel that Argentina will consider it an unfriendly act if Bolivia would not furnish Argentina with 500 kilos of sulphate which the Argentine Government needs immediately to control malaria in the northern regions of Argentina. Argentina would need sulphate monthly; the Argentine Ambassador said further that if Bolivia committed this unfriendly act toward Argentina, Argentina would cut off Bolivia’s importation of meat, wheat and other agricultural products from Argentina.
That if Argentina cut off these supplies Bolivia would starve.
That Bolivia does not intend to furnish Argentina with this much sulphate but may have to furnish them a little in order to keep Argentina from taking these steps (see this Embassy’s telegram 752, March 28, 1 p.m.48).
That in view of the national factory’s inability to get bark the Cabinet was passing a decree requiring one-third of the bark to go the national factory (a report appeared in the La Razón that a decree has been approved requiring that all quinine “exporters” deliver to the national factory 30% of the unprepared cinchona bark they export but Wynn understands this decree has not as yet actually been signed).
That due to the pressure from the producers and factories and since our prices are not only lower than Argentine Government offers [Page 482] but lower than prices offered by governments of our own Allies, Bolivian Government which at this time has domestic as well as international problems does not feel it can order the factories to sell all of their production to us at prices markedly below those being offered by the Governments of Brazil, Costa Rica and the Dominican Republic as well as Argentina. Villarroel said, however, that the Bolivian Government would do everything possible to see that the United States gets as much as or more sulphate from Bolivia than it has in the past. In this connection the President estimated that with the new machinery arriving and which will be functioning by June the production of the national factory would increase to 1,500 kilos per month, of which over 1,200 should go to the United States. Villarroel indicated moreover, that with respect to disposition of sulphate on hand consisting of 350 kilos at La Paz and Oruro, he would personally order that 200 kilos be given immediately to Wynn at the FEA price and that only 150 kilos be held in Bolivia for contingencies.

  1. Victor Paz Estenssoro, founder and leader of the Movimiento Nacionalista Revolucionario.
  2. Maj. Gualberto Villarroel, head of the Junta.
  3. Gen. Martín Gras.
  4. Not printed.