740.24112A RP/7–2844: Telegram
The Chargé in Bolivia (McLaughlin) to the Secretary of State
[Received 11:45 p.m.]
1446. Department’s 765, July 21, replacement of Axis firms. In company with Egger of Bolivian Development Corporation, McConaughy, Ramsey and I discussed entire replacement program this morning with President Villarroel, Foreign Minister47 and Minister of Economy.48 Bolivian Government has agreed to take following steps: (1) promulgate prior to the assembly of Congress a decree suspending the registration of enemy held trademarks; (2) confirm in writing the validity of the exchange of notes of October 1943 regarding the financing of the replacement program; (3) present the expropriatory decree laws of February 11 and March 31, 1944, to the Congress for ratification; (4) accept the plan of the Bolivian Development Corporation for financing the replacement program and assisting the successor firms; (5) initiate the program by eliminating first the larger Axis firms comprising the principal spearheads of Axis economic penetration.
The Bolivians manifested an interest in obtaining an increase of the Export-Import Bank credit from $2,000,000 to $2,500,000 but agreed to accept the figure of $2,000,000 with the understanding that the way would be open for further negotiations if an additional credit later were found necessary. The Embassy representatives expressed some concern as to the adequacy of the bolivianos 2,000,000 figure which is fixed in article XIII of the Decree Law of March 31 as the maximum capital limit for successor firms. However, the Bolivians were insistent on this figure and said that difficulties could be obviated by partition of the larger Axis firms, formation of corporate subsidiaries and use of public corporations, and other roundabout measures. The Bolivians are highly desirous of obtaining a wide distribution of the Axis interests to be transferred and are fearful of the uncontrolled expansion of the interests of the large aggregations of capital now in Bolivian commerce. Hence it is not believed that any modification of this provision can be obtained although it is undoubtedly true that it will render more difficult the transfer of the larger Axis firms.
[Page 527]The President and the Foreign Minister explicitly authorized me to inform the Department that the Bolivian Government was committed to the accomplishment of the replacement program and would carry it through as an administration sponsored measure.
Egger is leaving for Washington tomorrow and is prepared to discuss the subject comprehensively with the Export-Import Bank and the Department.