824.6354/1–2347: Telegram

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


81. In informal conversation with Acting ForMin Saenz2 today he told me of depression and disappointment of the Junta about slim prospects for any increase in price of tin revealed in information from Cañedo Reyes.3

I feel that question of price of tin is inescapably tied up with Bolivian internal economy and public order and that unless adequate increase to offset increased cost of imported foodstuffs is attained the new govt will have difficult situation dealing with mining labor in particular.

Jorje Zalles, Grace4 Vice President, now here informed me he has been told by intimate friends that brusk statement by US that tin price resulting from negotiations would not be retroactive as heretofore, has caused very bad impressions and feeling that Bolivia is being squeezed. These people feel that they are entitled to better treatment than was the dictatorial Villarroel regime5 and that US should contribute to stability of democratic institutions by more friendly treatment on the tin price question. This attitude was factually demonstrated by decision of producers to withhold tin shipments pending conclusion of the tin negotiations.

I hope that Dept may consider this question in the light of implications in our overall relations with Bolivia and our desire to stimulate democratic institutions which have emerged since July 21. These points might be usefully stressed in talks with RFC.

  1. Eduardo Saenz Garcia; his regular position was Minister of National Economy.
  2. Raúl Cañedo Reyes, Bolivian Director General of Mines and Petroleum.
  3. W. R. Grace and Company.
  4. For documentation on the overthrow of the Villarroel regime and the position of the United States, see Foreign Relations, 1946, vol. xi, pp. 340 ff.