711.2427/1–3047: Telegram

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

confidential

99. Concerning proposed bilateral air transport agreement Captain Pol, Director of Civil Aeronautics in Ministry of Defense, states that Ministry determined to amend operations contract between Panagra [Page 364] and Bolivian Government signed in May 1943 and not scheduled to terminate before 1967, before signing bilateral agreement with Article 860 included as proposed in United States draft. As operations contract contains no clause providing for its termination or amendment before date of expiration Captain Pol stated that Government’s plan for amendment is to be as follows:

1.
The Government will issue a decree directing Ministry of Defense to effect desired modifications in Panagra contract;
2.
Ministry of Defense armed with the decree will approach Panagra and attempt to work out new text for contract incorporating desired modifications;
3.
If agreement is reached new contract will be concluded; but if Panagra cannot find basis for agreement with government the latter will issue another decree stating that present contract is terminated due to impossibility of carrying out previous decree calling for its modification. Then Bolivia will agree to sign agreement with Article 8 intact. Pol stated desirability of issuing the first decree before Panagra informed so that latter’s officials will not have time to use their influence with government Ministers to prevent its issuance. Embassy desires views of Department in matter and instructions in light of this new situation, especially if informal views of Pol are embodied in government’s views soon expected through Foreign Office.

Flack
  1. This article stipulated that existing rights and concessions granted to airlines would continue in force.