824.6354/12–447

Memorandum by the Ambassador to Bolivia ( Flack )25 to the Assistant Secretary of State for Political Affairs ( Armour )

confidential

On November 3, the day before my departure from Bolivia, President Hertzog asked me to come to see him at the palace and, among other things, stated that he would like me to convey a message from him to President Truman about the price of tin in the new contract for 1948. While President Hertzog did not mention any price per pound which he may have had in mind, he said that he felt that Bolivia should have an adequate price for tin for the following reasons:

1.
Bolivia is obliged to pay the high prices for the manufactured goods and foodstuffs which it must buy almost exclusively in the United States, and these prices are constantly increasing while the price of tin has been fixed by the contract with RFC.
2.
An increase in the price would augment tin production in Bolivia and thus provide Bolivia with additional foreign exchange.
3.
Increased production would likewise augment the national revenues which depend largely on tin which would enable the Government to pay salaries and maintain adequate administrative functions.
4.
President Hertzog stated that due to the illiteracy of the Bolivian Indians and the ignorance of the laborers, Bolivia is a fertile field for Communism unless the economy of the country can be maintained on which a functioning democratic Government can rest. He said that, for a relatively small amount more each year for tin, Bolivia could accomplish all of these things and provide a stable nucleus in the southern part of South America. He considered this very important from the standpoint of Hemisphere defense and said that he felt that Bolivia was particularly open to possible infiltration of Communists and the agitation they bring with them.
5.
He mentioned that, since the United States is spending such vast sums to check Communism in Europe and other places, he felt that the assistance which could be rendered to Bolivia’s tin industry through an adequate price increase is fully justified and would act as insurance against possible rise of Communism in Bolivia, while stabilizing Bolivia’s economy and democratic institutions.

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I told President Hertzog that after my arrival in Washington I would endeavor to seek an interview with the President for the purpose of conveying to him the personal message above mentioned.

Joseph Flack
  1. The Ambassador returned to Washington on November 4 and appears to have remained there for several months.