824.6176/11–2946: Telegram

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

confidential

666. RDC carefully considered Bol request but unable approve either alternative (Embtels 1097 Nov 29,92 1124 Dec 1293 and 1130 Dec 14).

Supplementing reasons given in Deptel 64293 for this decision following may be used explanation Bol Govt.

Since termination hostilities US has been bringing to end wartime emergency purchasing operations. By their nature and as was publicly announced operations were only to continue so long as situation brought about by hostilities lasted. Since that situation changed agencies this Govt limited their programs fulfillment their existing obligations and in each case due notice was given far in advance to other American Republics including Bolivia of termination programs. Specifically in case Bolivia offer to extend agreement, which had not been accepted by Bol Govt, was withdrawn in Aug 1945 when apparent war drawing to close and yet 16 months before rubber agreement itself was to terminate.

Conformably RDC was empowered by Congressional Act only to subsidize purchasing operations for which it had existing commitments before January 1, 1946 and funds are available to it sufficient only to meet those commitments. In absence of commitment RDC authority restricted to purchase rubber at world price (on basis of quality, differentials and freight costs, this would mean estimated price paid to Bol producers less than half of base price provided by Bolivian Agreement).

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At time offers were made to extend agreements to other American Republics Bolivia was equally included and since Aug 1945 no extension or preferential treatment has been accorded to any country. In fact similar requests have been refused. Although fully appreciative of and sympathetic to considerations stated by Bolivian Govt, for foregoing reasons exceptions to established procedure precluded. US believes that 16 months in question should have been sufficient time for reconversion rubber industry in Bolivia to normal channels envisioned by Chapultepec obligations.

Byrnes
  1. Not printed. The two alternatives specified were: (1) prolongation of agreement for 6 months; (2) that the Rubber Development Corporation obligate itself to take all rubber production not sold or exported as of June 30, 1947 (824.6176/11–2946).
  2. Not printed.
  3. Not printed.