102.8951: Telegram

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

629. Truslow, RDC, from Munro. Your 393, June 10.50 Results of cordial 5-hour conference which Ambassador and I held yesterday with President51 and Minister Agriculture52 are as follows:

Exports of manufactured rubber goods—since domestic market not large enough for operating factory efficiently President anxious begin exporting manufactured rubber goods. Such exports to be above 250 quota contracted to Argentina already. Desires also installation tire plant to insure utilization Bolivian rubber.
Extension of contract—President stated present negotiations by Bolivia with commercial representatives of three adjoining countries to secure 2 to 3 year rubber contract beginning January 1, 1947 which would be more advantageous than RDC contract. Consequently Bolivian Govt, not willing make extension without improvement of conditions present contract.
Volume premiums—Section 4 rubber agreement says President clearly states premiums “may be” not “shall be” deducted from unexpended balance of development fund. He strongly objects this deduction.
Development fund—President insisted balance of development fund except deductions specified section 7 of agreement and disbursement trade to date be made available to Govt, for RDC expenditures in rubber producing areas.

President stated when Congress convenes August 6 Govt, wall be severely criticized and must offer satisfactory answers to questions on rubber contract. Considering difficulties mentioned recommend you visit Bolivia in July. This cable approved by Ambassador. [Munro.]

  1. Not printed.
  2. Maj. Gualberto Villarroel.
  3. Julio Zuazo Cueca.