Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

824.2544/6–1752

Memorandum of Conversation, by Herbert H. Liebhafsky of the Metals and Minerals Staff

confidential

[Washington,] June 17, 1952.

Subject:

• Sale of Bolivian Tin

• Participants: OMP—Mr. Evans¹
• OMP—Mr. Bramble² (MMS)
• OMP—Mr. Getzin³ (MMS)
• OMP—Mr. Liebhafsky (MMS)
• OSA—Mr. Atwood
• OSA—Mr. Hudson⁴
• Mr. Walsh⁵—Emergency Procurement Service
• OSA—Mr. Ammott⁶
• Mr. Courand—DMPA⁷
• Mr. Larson—DMPA
• Mr. Rowntree—Export–Import Bank⁸
• Mr. Shannon—RFC⁹
• Mr. McKinnon—RFC¹⁰

Mr. Evans opened the meeting by stating that the Bolivian Government had decreed that the Banco Minero should be the sole exporter of all valuable minerals produced in Bolivia. The Banco Minero had given some sort of authorization to a Mr. Ditisheim,¹¹ who in turn was being represented in Washington by Mr. Leon Henderson, to act on its behalf. Neither Mr. Henderson nor Mr. Ditisheim has shown this authorization to United States officials but they had claimed to have an exclusive agency for sale of all Bolivian tin, including Patino concentrates. The problems requiring the most immediate solution were whether any agency of the United States Government should now recognize the monopoly of the Banco Minero and deal with it, and, if so, whether such negotiations should be carried out with Ditisheim–Henderson.

Mr. Evans pointed out that the sweeping authority granted to the Banco Minero by the Bolivian Government apparently cut across existing contracts. This raised a number of questions: (1) Would the Bolivian Government now give assurances that the Banco Minero would honor (a) existing contracts between United States Government agencies and Bolivian producers; (b) existing contracts with United States private purchasers; (c) existing contracts with other foreign governments and individuals? (2) Would the Bolivian Government also honor existing contracts if the mines were nationalized? (3) Until assurances were received from the Bolivian Government on these questions would it be wise to deal with a representative of the Banco Minero even if he proved his right to act in its behalf? (4) Was there a danger of becoming involved in litigation with present mine owners if United States agencies accepted deliveries from the Banco Minero under existing contracts with private companies? (5) Assuming that other obstacles to dealing with Ditisheim-Henderson were removed, and their claim that they were in a position to offer all Bolivian tin were substantiated, should the United States Government purchase all or any part of the Patino concentrates in spite of the long-standing arrangements between Patino and the British?

EPS reported that it had contracts for tungsten and asbestos. Some of the former were tied to loans made by the Export–Import Bank. DMPA said it was buying columbium on open offer at premium prices. Premiums were, however, only paid to producers themselves and not to sellers who were not producers. Export–Import Bank reported that it had authorized three loans for tungsten development. There have been disbursements in connection with only one of these.

The question was raised as to whether RFC and the other procurement agencies of the United States Government could agree not to make further contracts for Bolivian minerals until Bolivia had indicated whether or not it would honor all existing contracts with United States Government agencies. It was pointed out that the only effective bargaining weapon in the hands of the United States for insuring fair treatment to the contracting agencies was the conditions under which we were willing to buy these minerals from Bolivia, and most particularly the conditions under which we were willing to buy tin.

RFC stated that from the standpoint of supply it was not at present forced to buy tin for the Texas City Smelter. It had stocks on hand and was, moreover, faced with a strike. At the same time a suggestion that RFC stop buying tin would place that agency in a difficult position, since it had had an apparently genuine offer from Ditisheim and Henderson. It was charged by Congress with operation of the smelter and tin was in overall short supply. Moreover the offer included Patino concentrates and a refusal might lead to Congressional criticism. RFC had not, however, been shown any authorization to act on behalf of the Banco Minero by Ditisheim—Henderson. RFC could only agree not to make any term contract for Bolivian tin if each interested agency sent a letter to RFC specifically requesting that it refrain from doing so.

After further discussion it was agreed that RFC would talk with the agents and ascertain their terms but not immediately conclude a contract. Meanwhile a telegram would be dispatched to La Paz for information as to whether Bolivia would honor existing contracts now and as to the mechanics of safeguarding the Export–Import Bank loans. An inquiry as to whether Bolivia had selling, plans other than the Ditisheim—Henderson arrangement would be included. The telegram would also indicate that until satisfactory replies were received from Bolivia, United States Government procurement agencies would not conclude any contracts with the Banco Minero or its agents.

It was also agreed that a memorandum embodying this decision would be signed by all the participating agencies and would be given to RFC. A copy is attached.¹²

Subsequent to this meeting, further discussion among representatives of the State Department, EPS, DMPA and the Export–Import Bank led to the conclusion that the request by these agencies to the RFC should be not to make any term contract with the Banco Minero or its agents while the present uncertainty concerning nationalization of the mines persisted, and that no other purchase be made until satisfactory answers had been obtained from the Bolivian Government to the questions referred to above. It was also agreed that the proposed cable¹³ be altered accordingly.

1. John W. Evans, Deputy Director, Office of International Materials Policy.
2. Harlan P. Bramble, Chief, Metals and Minerals Staff.
3. Edmund E. Getzin, Chief, Nonferrous Metals Branch, Metals and Minerals Staff.
4. William P. Hudson.
5. A. J. Walsh, Commissioner, Emergency Procurement Service, General Services Administration.
6. John C. Ammott.
7. Claude Courand.
8. R. Henry Rowntree.
9. Spencer S. Shannon, Special Assistant to the Administrator.
10. Wylie F. McKinnon, Chief, Tin Division, Office of Production.
11. Hans Ditisheim, a Swiss-born naturalized U.S. citizen.
12. Not printed.
13. Apparent reference to telegram 365 to La Paz, dated June 20, 1952 (824.2544/6–1952).