740.24112 R.P./9–1944: Telegram
The Secretary of State to the Chargé in Bolivia (McLaughlin)
1034. Consultation has taken place between officers of Eximbank and the Department with respect to the subjects raised in your airgram A–393, September 19, 1944.56 As has been previously suggested, the Department and the Eximbank are willing to extend financial assistance on the basis of a program whose legal validity is assured. The Eximbank, however, is not willing to extend financial assistance upon any basis giving rise to legal doubts. For this reason, the legal effect of the proposed action by executive decree only would have to be very carefully canvassed and all doubts allayed with respect to the validity and constitutionality of procedures established by merely executive action. It should be noted that the Department has substantial doubts as to the validity of action under present executive decrees, and that financial assistance could not be expected merely upon the basis of these executive decrees. Furthermore, rejection of the proposed laws by the Bolivian National Convention, after presentation of these laws and substantial opportunity for debate, would seem to raise further substantial doubts, both as to the legal effect of the present executive decrees, and as to the possibility of a program actually being worked out by the Bolivian Government. Importance is, therefore, attached by the Department to the enactment of suitable legislation by Bolivia.
With respect to the second question raised in your airgram under reference, namely, the availability of financial assistance should Bolivia not embark on a replacement program until after cessation of hostilities, the Department believes that an answer based solely upon this consideration cannot be given. Should a program having substantial chances of success be inaugurated, even after the cessation of European hostilities, the Department would be willing to recommend the extension of financial assistance. On the other hand, the Department believes that the possibility of successfully carrying through a [Page 534] program would be substantially diminished if the program were to be begun only after the cessation of European hostilities. For that reason, examination of the entire situation, as it then stood, would necessarily have to precede any recommendation which might at that time be made by the Department to the Eximbank. These statements are not, of course, intended to prejudice a decision with respect to a replacement program if the program has been begun and is substantially advanced, but not completed, at the time that European hostilities cease.
- Not printed; in it the Chargé indicated the willingness of the Bolivian authorities to proceed with the expropriation program by executive action alone (740.24112 R.P./9–1944).↩