The Chargé in Bolivia (Galbraith) to the Secretary of State

No. 1916

Sir: I have the honor to refer to the Embassy’s despatch no. 1847 of November 6, 1947, which forwarded to the Department the text of the United States-Bolivian Bilateral Air Transport Agreement as proposed [Page 377] by the Bolivian Government, and to enclose a copy in Spanish, along with the Embassy’s translation thereof, of a confidential Memorandum dated November 28, 1947,75 which the Bolivian Ministry for Foreign Affairs sent to the Embassy explaining the position of the Bolivian Government with regard to the points for international air traffic in Bolivia designated in the Annex of the Bilateral Agreement.

This Memorandum comes as the result of conversations between Ambassador Flack and Bolivian Sub-secretary Alvarado, and of a letter that the former sent to Mr. Alvarado on October 30, 1947, before his departure from Bolivia, expressing the opinion that a memorandum prepared by the Foreign Office concerning the airport traffic points referred to above would be of considerable benefit to him when he took the matter up with the appropriate authorities of the United States Government in Washington with a view to arriving at a fuller understanding of the viewpoints of the respective Governments. The matter of the number of traffic points designated in the Annex of the Bilateral Air Agreement remains the one outstanding point of difference between the texts for the Agreement as proposed by the United States and Bolivian Governments respectively.

It will be noted that the reason stated in the enclosed Foreign Office Memorandum for Bolivia’s desire to reduce the twelve Bolivian traffic points as proposed by the United States to six, lies first of all in the need for protecting the national airline, Lloyd Aereo Boliviano, from the competition of foreign airlines. Furthermore, the memorandum points out, the reduction is necessary because Bolivia has only a very limited number of airports possessing the facilities and organization capable of handling regular international air traffic. It is stated that it would have been best to limit the airports designated in the Bilateral Agreement to three, i.e. La Paz, Cochabamba, and Santa Cruz, which alone have adequate facilities for handling international traffic, but that the Bolivian Government, desiring to offer further proof of its deference and cordiality towards the United States Government, has agreed to concede the six airports specified in its draft of the Bilateral Agreement, which the Embassy forwarded by the despatch of November 6 previously referred to, these airports being La Paz, Oruro, Cochabamba, Sucre, Santa Cruz and Roboré.

With regard to the position assumed up to the present by the Department in this matter, namely that the 12 airports must be included in the Bilateral Agreement so as to protect the monetary value of the installations that Panagra presently possesses at those airports, the Embassy may point out that Panagra’s interests at those airports are protected by its operations contract with the Bolivian [Page 378] Government, and that Panagra officials in La Paz themselves do not see the necessity for including all 12 points in the Bilateral. International airlines of the United States would probably be interested only in handling traffic at La Paz, Cochabamba, Santa Cruz and possibly Oruro. The concern expressed by the Department that Captain Pol, with his anti-Panagra attitude, would force the price down on Panagra’s installations at airports not mentioned in the Bilateral Agreement would appear to be dispelled, at least in part, by the fact that Captain Pol is no longer connected with Civil Aeronautics in Bolivia and that he appears to have lost out in his obstructionist policy connected with Panagra and the Bilateral Agreement.

It is, therefore, respectfully requested that the enclosed Memorandum of the Bolivian Foreign Ministry be referred to Ambassador Flack and to the appropriate officials of the Department for the use it may have in the final deliberations in Washington over the possibility of concluding the Bilateral Air Agreement.

Respectfully yours,

Willard Galbraith

[Negotiations continued intermittently in 1948. Bolivia withdrew its opposition to Article 8, and the United States reduced its requirement of 12 traffic points to 6. The agreement was signed September 29, 1948, and is considered to have gone into effect on November 4, 1948.]

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