824.2544/7–3152
Memorandum of Conversation, by William P. Hudson of the Office of South American Affairs
Subject:
- Bolivian Tin
- Participants: Ambassador Andrade1
- ARA—Mr. Miller
- OSA—Mr. Hudson
Having called for the first time on Mr. Miller, Ambassador Andrade said that he wished to bring up certain specific problems. By far the most important of these was tin. His principal immediate responsibility was to negotiate a contract with the Reconstruction Finance Corporation. The price to be specified in this contract was of course important, but it was less important than the length of the contract. Bolivia urgently needed a term contract with a duration of one year or more.
The Ambassador indicated that he planned to offer Patiño ores to the RFC, although he was aware that such an offer would involve legal [Page 497] complications which would have to be studied. He indicated that Bolivia would hope to receive a more favorable price if Patiño ores were included than if they were not.
Mr. Miller replied that the RFC had been buying Bolivian tin and was prepared to continue doing so, on a short-term or spot basis. However, in view of certain purely commercial considerations arising out of the pending nationalization issue, the United States believed that a long-term contract at this time would be premature. The issue of nationalization was one for the sovereign people of Bolivia to decide for themselves, but it would raise problems which would make a long-term contract at this time commercially unrealistic. For example, the decisions on nationalization which remained to be taken and implemented might create questions of the ownership of the ores involved in a tin contract, and the quantity of the ores involved in a long-term contract would be difficult to predict in advance of these decisions. The United States also had to consider the interests of American citizens who were stockholders in Bolivian mining companies.
Regarding the Patiño ores, Mr. Miller supposed that the RFC would be willing to consider their purchase, but the United Kingdom was greatly interested in this matter, and there were legal complications which would require very careful study.
Ambassador Andrade remarked that he had read with interest the report2 of the Preparedness Sub-Committee of the Senate Armed Services Committee. Mr. Miller commented that this report, which had caused certain difficulties in our relations with tin-producing countries, had not been cleared with interested executive agencies of the United States Government and thus was the view solely of the legislative branch. The executive branch agreed with some of the findings of the Sub-Committee, but disagreed with others. It was extremely unfortunate that in the heat and excitement of the tin crisis of the past year the impression of an economic battle between the United States and Bolivia, both members of the friendly community of American states, had been created. However, he could assure the Ambassador that there was no question of any such battle now, and that the Ambassador would find United States officials prepared to discuss the tin problem with him in a manner becoming members of the same friendly family of nations.
The Ambassador said that he wished to clarify the position of Leon Henderson. Mr. Henderson had had an option authorizing him to sell Bolivia’s tin production, but this option had expired, and although Mr. Henderson seemed to believe that he still had some authority to offer Bolivian tin ores, this was not in fact the case. It was his personal opinion that the granting of the option had been a mistake in the first place and he was speaking officially for the Bolivian Government in [Page 498] saying that he himself was now the only person authorized to deal with the RFC, although he would have certain technical assistance from other Bolivian officials. [Mr. Hudson later telephoned the Ambassador to confirm an impression that in speaking of the “Henderson option” the Ambassador had been referring to the arrangement with the Banco Minero in which Hans Ditisheim had the principal interest. The Ambassador replied that this impression was correct, and that what he had said about Mr. Henderson applied also to Mr. Ditisheim.]3
Mr. Miller indicated that the Department had had doubts about the soundness of the Ditisheim—Henderson arrangement, and said that he wanted to assure the Ambassador that there was no need for Bolivia to employ intermediaries in dealing with the RFC.
The Ambassador said that he had heard a rumor that the United States planned shortly to permit the resumption of tin imports by private buyers, and he wondered what effect this development would have on the negotiation of a contract between Bolivia and the RFC. Mr. Hudson replied that the announcement of this action was to be made the following day, and that the American Embassy in La Paz had been requested to inform the Bolivian Government in advance. He said that this action should not make any difference in the negotiation of a contract for Bolivian ores, since the RFC would continue to purchase ores for the Texas City smelter. The resumption of United States private trade in tin might have some effect on the market, but it was the opinion of some tin experts that this effect would not be very marked, since the RFC would continue to buy and sell large quantities of tin at $1.21½. For the Ambassador’s confidential information Mr. Hudson gave him a copy of a statement on this subject by the Administrator of General Services,4 which was being released to the press for publication the following day.