824.24/12–2849: Telegram

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

confidential

662. Embassy today received check from Bolivian Government in [Page 548] amount 5,000,000 BS (bolivianos) on account 10,500,000 BS.1 This year’s payments due January 1 and July 1 of $150,000 US and $100,000 US respectively converted at 42 BS to $1.

I am addressing note2 to Foreign Office with copy to Finance Minister acknowledging receipt this payment and at same time making official demand for remaining bolivianos 5,500,000. I shall also include in note notice of two payments due next year specifying dollars of 100,000 January 1 and 100,000 July 1, with remainder $15,644.21 due 1951. Latter connection presume Department wishes payment in dollars next year, view dilatory action Bolivian Government making current payments.3 Hope Department might also bring failure Bolivian Government meet full payments this year attention Bolivian Ambassador Washington, particularly view his note of last July.4

Espy
  1. The check represented a partial payment by Bolivia of the amount due the United States under a previously reached lend-lease settlement. The status of negotiations on this question had been summarized in a memorandum (not printed), dated November 18, from Mr. Sheldon King of the Office of North and West Coast Affairs to the Director of that Office, Mr. Sheldon Mills, which read in part as follows:

    “During the existence of the lend-lease program, Bolivia took up only slightly more than $5,000,000 worth of equipment as against an allocation of $11,000,000. In 1947, an agreement was reached under which Bolivia promised to repay $915,644.21 in local currency at the legal rate of exchange in six semi-annual installments ending July 1, 1950. Payments were made as scheduled through July 1, 1948, but Bolivia has defaulted on the payments due January 1 and July 1, 1949, which total $250,000. The Embassy and the Department have discussed these payments on numerous occasions with various Bolivian officials and have received repeated assurances that the payments would be made. It appears that $300,000 were available early in September with which to meet this obligation, but, in view of the emergency arising from a large-scale revolutionary attempt, the funds were turned over to an Air Force major who came to this country and purchased planes and military equipment. We have again requested immediate payment of the outstanding lend-lease obligation, also calling the attention of Bolivia to the fact that there is another unpaid balance of almost $500,000 representing a ‘cash reimbursable’ account which must be settled.” (824.24/11–1849)

  2. Not printed.
  3. The Department’s instruction No. 17, March 17, 1950, to La Paz (not printed), stated that the installments due from the Bolivian Government on January 1 and July 1, 1950, were payable in U.S. dollars (724.56/3–450).
  4. The note, dated July 7, not printed, had indicated that the payments due on January 1 and July 1, 1949, would be made during the month of August 1949 (824.24/7–749).