Memorandum of Conversation, by Mr. Spencer M. King of the Office of North and West Coast Affairs


Subject: Bolivian Tin

Participants: Sr. Don Ricardo Martinez Vargas, Ambassador of Bolivia
The Secretary of State
Assistant Secretary Miller
Mr. King, NWC

The Ambassador expressed his appreciation of the time granted him while I was so busy with other work, but said his Government had instructed him to call personally to request the Department’s assistance in solving Bolivia’s acute economic crisis. He said his country unfortunately depended on the exports of a single commodity—tin—and the very life of Bolivia was threatened by the present crisis. He handed me a memorandum setting forth facts about tin and Bolivia’s role in the recent war. He said the lengthy memorandum contained suggestions and pleas for US assistance.

I told the Ambassador I was aware of the great importance of tin to Bolivia and that we were all desirous of assisting it to solve the serious problems faced today. I assured him the papers left with me would receive the careful and sympathetic attention of appropriate officers in the Government.

The Ambassador explained his familiarity and agreement with the US policy to help only those who help themselves. He said Bolivia wished to do whatever it could and was always willing to cooperate. It has a program to diversify its economy through development of agricultural potentialities which, in five or ten years, will lessen the dependence of the population on imported foodstuffs which must be [Page 745] purchased with the exchange received from tin exports. He stated that 80 percent of the demand for foodstuffs had to be met through imports at the present time. (This figure is greatly exaggerated.) He expressed his appreciation of the cooperation of the US, and specifically Mr. Miller, in arranging recent Export-Import Bank credits to complete the Cochabamba–Santa Cruz highway, without which the diversification program could not be completed.2

Assistant Secretary Miller pointed out to the Ambassador that the problem of Bolivia and its tin was one which the Department had been studying for many months. He noted that the present price of tin, about 75 cents per pound, is still considerably higher than the price during the war. If any practicable solutions of the present crisis could be suggested, we would be most happy to consider them. However, it was only fair to state frankly that the Munitions Board had indicated it did not consider continuous access to Bolivian production to be of great importance to the security of the US at present. Even were all Bolivian mines to close down, which is unlikely, the stock-pile program and concentrates available from other areas would be sufficient for this country, at least at the outset of any emergency. He cautioned the Ambassador that no immediate solution or special assistance to Bolivia was in sight. Furthermore, Bolivian producers are now forced to turn in a large portion of their foreign exchange for local currency at a most unrealistic and unfair rate which increases their natural high production costs. Bolivian tax and fiscal policies appear to be against the interests of the producers. Mr. Miller also mentioned the Bolivian feeling that the ECA program had assisted in the rehabilitation of the Far Eastern tin industry, which hurt Bolivia.

The Ambassador admitted that the tin industry of Bolivia bears a heavy burden, but explained that it was the only source of income for the Bolivian Government and that consequently it simply had to carry the load until such time as the dependence on it of the national economy might be decreased. The diversification program and reforms to be instituted after completion of studies by an International Monetary Fund mission currently in Bolivia ought to be of great assistance. Meanwhile, US assistance is required.

In closing, I reiterated that the problems of Bolivia would receive the careful attention of the Department.

  1. On May 1, 1950, the Export-Import Bank and a representative of the Bolivian Government signed, in Washington, an agreement in which the Bank loaned Bolivia $16 million towards the completion of the Cochabamba–Santa Cruz highway. The bank had approved the loan in principle the preceding October.