740.24112 RP/3–2646: Airgram

The Chargé in Bolivia (Adam) to the Secretary of State

[Extracts]

A–412. Reference is made to the Department’s circular airgram no. 170 of March 4, 19465 and the Department’s airgram No. A–554 regarding withdrawal of the Proclaimed List and the progress of the replacement program.

With regard to the Embassy’s despatch no. 1740 of October 27, 1945,4 the Bolivian Government has done nothing to effect its promise to adopt a replacement program. No decree has been issued calling for the blanket sale of Axis spearhead firms. The present status of the replacement program is as indicated in the Embassy’s despatch no. 2396 of March 13, 1946 and enclosures. The Economic Defense Board, scheduled to meet to consider the program on March 20, failed again to do so. Following 3 years of promises to effect a replacement program, 2½ years under the present regime, it can only be assumed that the Bolivian Government has no intention of complying with its commitments. It will be recalled in this connection that over a year and half ago President Villarroel promised Francis H. Russell, then Chief of the Division of World Trade Intelligence of the Department, that the Bolivian Government would immediately proceed to replace Axis spearhead firms (see Embassy’s despatch no. 4192 of August 18, 1944.6)

A despatch is being prepared which will fully cover the situation, but the following is a brief resume of the information requested.

1. Report on the current status of each spearhead firm.

. . . . . . . . . . . . . .

Recommendations:

1.
After three years of promises by the Bolivian Government, the Embassy does not believe that the replacement program will be effected unless a quid pro quo policy is adopted. It is believed that [Page 410]were the Embassy authorized to inform the Bolivian Government that since it had not complied with its commitments to enforce a replacement program that the Proclaimed List would have to be continued for at least two years to extirpate Axis economic interests, it would have a salutary effect.
2.
Furthermore, to prevent American goods going to Axis firms, a licensing system for exports to Bolivia should be established. If the Embassy were authorized to inform the Bolivian authorities that their lack of action had resulted in such a measure, it would aid in dealing with the Government.
3.
If the Department were able to authorize the Embassy to inform the Bolivian Government that commercial negotiations would be restricted pending Bolivia’s compliance with its commitments, it is believed that the replacement program would have more chance of success.

Adam
  1. Not printed; it was a request for information on the status of spearhead firms, likelihood of action, and recommendations (740.00112A EW/3–446).
  2. Not printed.
  3. Not printed.
  4. Foreign Relations, 1944, vol. vii, p. 528.