810.79611 PAA/7–2547: Telegram
The Secretary of State to the Embassy in Bolivia
434. Campbell of Panagra departed for South America July 24. Will arrive Bolivia about Aug 1 and will keep self in contact with Emb reEmbtel 607 June 25.69 Panagra position is present contract is [Page 371] satisfactory and no occasion to make new one. However, horse-trading between Panagra and Bolivian Govt may result in exchanging elimination Uyuni for disposal certain cabotage points, Dept believes. Pol sent Dept unofficially copy proposed new contract Panagra–Bolivia. Proposal would eliminate cabotage entirely after 3 years and has other objectionable features. Dept position is that present contract is binding and only mutually satisfactory accord between parties thereto can amend same. Campbell claims to have evidence conclusively proving no breach of contract by Panagra. Pol’s communication did not contain evidence Panagra acts of bad faith reDept’s memo of conversation June 1070 as promised, and Dept is replying personally unofficially to Pol stating its regret at failure of Pol to keep commitment and denying existence of basis for US Govt intervening in regard to new contract. Dept believes Emb should continue attitude re bilateral that same is not necessary at this time as contract rights are satisfactory and US not interested in any bilateral except on US terms including standard Art 8.
Dept requests you delicately determine whether Montes and Hertzog support Pol’s position, without creating impression in their minds that Pol is not looked on with favor by US. Please keep Dept advised.