The Assistant Secretary of State ( Acheson ) to the Foreign Economic Administrator ( Crowley )

My Dear Mr. Crowley: As you are aware, in carrying out this Government’s policy with regard to the present Government of Argentina, this Department has felt special concern for eliciting and maintaining the full cooperation of those American republics that border on Argentina and are, consequently, especially susceptible to Argentine influence. This Department considers it of particular importance, therefore, that Bolivia maintain its foreign policy along lines of cooperation with the United States rather than with Argentina. The Bolivian Government has oriented its foreign policy along such lines, and as a consequence has exposed itself to the possibility of economic retaliation from Argentina. Bolivia is particularly vulnerable in this respect because of her large measure of dependence on the importation from Argentina of essential supplies, particularly of food.

Now, apparently as a result of Bolivia’s cooperation with the United States, the Argentine Government has informed the Government of Bolivia without warning that beginning immediately, and for a continuing period of six months, Argentina will reduce its shipments of wheat to Bolivia by fifty percent. This creates a most serious situation [Page 510] for the Bolivian people since they are in large measure dependent on the Argentine supplies of wheat.

The Department feels that this Government must render such assistance to Bolivia as will meet this situation on three grounds: (1) this Government has a moral obligation to protect Bolivia against the consequences of its cooperation with the United States; (2) this Government is committed to use its best efforts to maintain the economies of the American Republics cooperating in the war; and (3) it is in the vital national interest of this country to insure the continuance of Bolivia’s cooperation with the United States rather than with Argentina.

As a result of conversations between officers of the Foreign Economic Administration and the Department, the Foreign Economic Administration has cooperated by diverting to Arica a ship carrying 9,132 long tons of Australian wheat for trans-shipment at Arica to La Paz. Owing to the fact that the exact price at which this wheat might be sold to Bolivia is not yet determined and might be considerably below the basic Australian price laid down in La Paz, and in view of the length of time which would be needed to replace the shipment were it rediverted, the Department requests that the Foreign Economic Administration and the U. S. Commercial Company do not redivert the ship destined for Arica, but rather allow it to continue on its course. In the event the wheat actually is sold to Bolivia, the Department will in a subsequent letter to the Foreign Economic Administration give the necessary directive to cover such subsidy payment, if any, as may be necessary on this particular shipment. If for any reason Bolivia does not purchase the wheat and an unavoidable loss is suffered by the Foreign Economic Administration or the U. S. Commercial Company, this request made on political grounds should furnish you with adequate justification for your action in allowing the shipment to continue to Arica.

Sincerely yours,

Dean Acheson