711.2427/4–2847: Telegram

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


406. Late today Foreign Minister Urriolagoitia told me at Foreign Office that as result of meeting with officials of Ministry Defense, including Minister and officials handling civil aviation, with President66 on Saturday it was decided that Article 8 proposed bilateral air agreement is after all unacceptable because in their opinion it violates Bolivia’s sovereignty by freezing existing contract with Panagra. They feel that if Article 8 is retained they would be committing themselves to us as a govt not to modify Panagra’s contract for its duration. There is no article in Panagra’s contract providing for procedure of modification.

Furthermore, Foreign Minister said, with reference to section 1 of annex that Bolivia could only grant three stopping points for international traffic, that is La Paz, Cochabamba, Santa Cruz since they consider they could not grant such rights at airports not at present equipped for this traffic. For bargaining purposes we think we could renounce Concepcion, San Ignacio, San José and Valle Grande not of value for international service.

Minister said Bolivian counterdraft incorporating above-mentioned changes would be in my hands tomorrow when I will telegraph any other minor changes suggested and transmit text by air.

I told Minister that in event my Govt was adamant in regard to retention of Article 8 I hoped that Bolivia might later present a modified version of that article acceptable to it and that with regard to the three international points of call I would inform my govt and obtain its early views. He intimated that with present Bolivian modifications agreement might be signed at once.

On basis of oral info obtained by Embassy it appears that Captain Pol, Chief Civil Aeronautics Ministry Defense is endeavoring bring about modification of Panagra contract because he feels that we are so interested in signing bilateral agreement that we would exert pressure on Panagra to agree to revising conflict [contract] with Bolivia. [Page 369] This has been constantly contradicted by all of us in conversation with Bolivian officials and his conclusions are accordingly erroneous. Embassy also understands that Bolivian pressure to modify Panagra contract might lead to President bringing this question to Bolivian Supreme Court.

Repeated Buenos Aires for Bell.

  1. Enrique Hertzog.