The Ambassador in Bolivia (Flack) to the Secretary of State
267. Information given me late this afternoon by Subsecretary Alvarado indicates that on basis of official information from Washington tin contract at 76 cents may be signed tomorrow, thus removing [Page 333] all but Banco Minero’s production of scarcely 3,000 tons from scope of proposed Argentine Agreement.
Alvarado stated further that as a result of representations made by Brazilian Ambassador the provisions in proposed agreement re Mutum iron and Beni rubber would be eliminated from draft. Also that Brazil would not only furnish funds for construction of Cochabamba-Santa Cruz railway but for La Paz–Boni railway as well thus forestalling Argentina attempts at controlling these routes and hinterland. Brazilian participation in connecting link in railway from Arica to Santos (Cochabamba-Santa Cruz sector) was stated to have been established in exchange of notes in 1943.
Alvarado stated that Bolivian counterproposal would be finished this evening taking note of points above detailed. He hopes that this will be published in line with previous decision to keep public informed and he feels that when this is made known to the Argentines they will reduce their offers of financial assistance to Bolivia by at least half if not more or make proposition unacceptable.
Foreign Office has concluded that only use Argentina could make of large amount of tin contemplated is for sale to Russia since economic negotiations with Russian delegation now taking place in Buenos Aires.
In reply to Alvarado’s question about our views on draft agreement with Argentina I replied that as yet I had no official indication from Washington; this was evidently primary purpose of calling me to Foreign Office.