824.63/12–346: Telegram

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


1104. Bolivian Government understood to be studying draft of expropriation decree as possible solution to plans of various companies to close mining properties not operating at profit and in answer to threats of mineworkers to seize any property so closed.

Draft of decree available to Embassy believed to have been modified and contains seven articles providing that if judicial investigation determines that a property now closed can be successfully operated it will revert to the state regardless of validity of title if not placed in operation within one year of decision. Property now in operation will not be allowed to close unless it can be proved that resources are completely exhausted. In case a mine is closed by proprietor for other reasons, it, together with all installations, machinery and mine implements, will revert to the state as provided by article 5 of Mineral Code. The Government will have the right to rent or operate such property as it sees fit. If an operating mine is seized by the workers local authorities are to take such action as necessary to restore the property to rightful owners and force payment of indemnification for damage by the perpetrators together with punishment as provided by law.

Junta understood to have considered such decree last week and to have postponed action until December 6.