102.8951: Telegram

The Acting Secretary of State to the Ambassador in Bolivia (Thurston)

407. For RDC Munro from Truslow. You are requested to take the following position urtel 595 June 9,45 re extension of the rubber agreement [Page 578] and are authorized to negotiate a solution of all open Development Fund problems at one time within the following limits:

We are unwilling to make any concessions or accept any conditions to obtain extension of the rubber agreement. If our offer to extend is not formally accepted by Bolivia during June we must reconsider and possibly withdraw it for further study next year.
We are willing to settle all open points with regard to Development Fund as follows:
  • First: We believe rubber production loans are essential part of development program. We recognize Bolivia did not have opportunity to scrutinize loans because of need they be made promptly. We are willing to agree that losses on past loans will be chargeable to Development Fund only to extent of $200,000 maximum which is about 10 per cent of total loans provided losses on loans made hereafter are chargeable to Development Fund if loans are approved by Bolivia.
  • Second: Premium monies paid to Bolivia will be deducted from the Development Fund, but will be available for projects as indicated in paragraph 3 and 4 following.
  • Third: Expenses incurred so far for projects listed Class II your letter March 2, 194546 and expenses in completing these projects as well as grants to CIAA47 for health work and for other specific projects approved by Bolivia are chargeable to Development Fund.
  • Fourth: Sanjines lease expenses will be waived and not deducted.
  • Fifth: Contingent $180,000 due from Banco Agrícola will be deducted until Banco makes payments claimed which it is able to do out of profits on Argentine sales.
  • Sixth: Deductions provided in agreement on export quota shipments will be made.
Under above settlement approximately $900,000 will become available through Development Fund and premium monies for road, airport, health, and other projects in rubber regions in addition to projects now undertaken.
Specific road, airport or other projects in rubber regions submitted by Bolivia and recommended by you will be given prompt consideration by our Board where Development Funds required but do not require action of our Board where then earned premium monies are used by Bolivia.

Above position on extension agreement must be maintained.

If above settlement of all Development Fund questions not acceptable in your opinion and that of Ambassador suggest you present only extension position and advise open questions under Development Fund will be discussed in my visit July 2. [Truslow.]

  1. Not printed.
  2. Not printed.
  3. Coordinator for Inter-American Affairs.