711.2427/2–147: Telegram

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


106. ReEmbtel 101, January 31.61 Jess B. Bennett, special representative Braniff Airways in La Paz to conclude operations contract with Bolivian Govt, attempting to put pressure on Embassy regarding revision Panagra’s 1943 operations contract. He points out Panagra not obligated by present contract to share airport facilities in La Paz and other points with other airlines so until this is revised Braniff contract to be concluded with govt is virtually worthless, as Panagra can deny use of its facilities. He points to fact that Panagra guaranteed cabotage privileges until contract expiration in 1967 and that contract provides for controlled frequencies—both facts he asserts are in direct violation international principles subscribed to by US. He states our Government should be ashamed to sign bilateral agreement permitting continuance [Page 365] of a contract embodying those violations. He is convinced Bolivian Government will not sign bilateral agreement with Article 8 intact before revision Panagra contract. He told Embassy it is its responsibility to help Braniff, an airline certificated by US Government, to obtain satisfactory contract for operation thru Bolivia which can be effected only by proper revision of Panagra contract. He states his complete agreement with Captain Pol and other Ministry Defense authorities on necessity of this revision and thinks Embassy should share his point of view and should agitate strongly with Dept for instructions to support contract revision before government expected to sign agreement with Article 8 intact. Suggest urgent consultation with Braniff in US as Bennett clearly attempting to force issue to head and putting Embassy into position which may become difficult unless it can receive further clarifying instructions on these issues. Therefore request such views and instructions as may help to clarify this situation.

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