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

724.11/5–753:Telegram

The Ambassador in Bolivia (Sparks) to the Department of State

confidential
priority

La Paz, May 7, 1953—8 p.m.

300. Embdes 706 May 4.¹ In interview with Foreign Minister Tuesday, I vigorously protested Paz and Lechin May Day speeches. I said while texts had not yet reached Department I did not feel I need await instructions express my government’s displeasure that facts were distorted,² Paz publicly doubted US Government sincerity and motives and Lechin charged US with economic aggression.

While regretting this development, Foreign Minister declared consensus in government and MNR Party was distrust US motives that US did not intend reach agreement with Bolivia simply marking time knowing economic deterioration would eventually cause overthrow government. Foreign Minister said he had combatted this thinking but in absence positive helpful action by US he had been unable impose his ideas. He added many people interpreted US refusal grant immunity to Banco Minero as further evidence US opposition to government. He underscored gravity present situation and need for prompt action dispel this thinking avoid economic chaos political and social disorder.

I reviewed in detail US actions asserting failure reach understanding must be attributed Bolivian insistence on premises unacceptable US and present adverse economic situation is due directly acts of Bolivian Government, to lack confidence here in Bolivia and anticipation what is to come due fall in mineral prices and inefficient operation mines. I stressed lack term contract has had only psychological effect since actually Bolivia has not yet completed delivery January spot purchase. Therefore, US cannot be blamed for Bolivia’s ill.

Speeches reflecting awareness gravity situation, Paz’ extemporaneous response to enthusiastic audience and need for whipping boy have caused dismay among conservative Bolivians and intensified anti-US feeling. Public statement by Department has been suggested but this might be expected result in bitter polemic and further aggravate anti-US feeling unless it also included constructive statement on term tin contract.

I am now satisfied Bolivian Government is prepared settle with Big Three. It has signed agreement with Hochschild and Aramayo for retention on tungsten offering same to Patiño; is actively negotiating realistic percentage retention on tin after which will negotiate total amount of compensation. US insistence on settlement compensation problem and refusal discuss term contract generated pressure which influenced this radical change in Bolivian Government policy but this same pressure, although unintentionally applied, leaves US partially vulnerable to charges in Bolivia and Latin America. Since new Bolivian policy can be implemented only if Bolivia retains its market for tin in US, I urgently suggest prompt consideration negotiating term tin contract.

Foreign Minister again inquired regarding usefulness Lechin and his going Washington.

Sparks

1. The referenced despatch, from La Paz, dated May 4, 1953, containing a summary text of President Paz Estenssoro’s May Day speech, is in file 724.11/5–453.

2. The Department’s telegram 247, to La Paz, dated May 20, 1953, reads in part as follows:

   “We approve your protest Paz Lechín speeches and suggest you take appropriate opportunities (1) to emphasize our surprise distortions in speeches and apparent deliberate campaign of hostility undertaken against United States by Bolivian Government and labor movement it presumably controls, (2) to point out danger this campaign may make it impossible Bolivian Government later obtain popular support measures cooperation with United States which it professes desire undertake, (3) to warn such a campaign might so antagonize American people and Congress as to endanger substantial United States assistance already being given Bolivia and future assistance such as term tin contract which Bolivian Government desires.” (724.11/5–753)