Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

249. Telegram From the Ambassador in Bolivia (Drew) to the Department of State¹

La Paz, April 1, 1955—11 a.m.

185. Department telegram 159.² March 24 decree raising salaries and wages precipitated controversy involving COB and so-called labor ministers touching off spate of low-grade rumors of imminent government collapse. (See Weeka number 12, despatch 421, March 25)³ Communists capitalizing situation through flood of fly sheets baiting government about inadequate wage increase and rising cost of living with FSB gloating expectantly in wings. Impossible now forecast outcome although situation definitely improved last forty-eight hours. While I have placed all US government agencies on discreet alert status our first hand contacts this week with President Paz, Lechin, Guevara⁴ and other Cabinet Ministers revealed no nervousness on their part. I have not considered that either rumors or known facts justified any message at this stage which might cause alarm.

Early announcement of approval pending Export Import Bank credits⁵ would supply strongest available support for Paz regime (see Embassy telegram 179, March 29).⁶

Will naturally not fail report promptly all significant developments.

Drew

1. Source: Department of State, Central Files, 724.00/4–155. Secret; Niact.
2. In telegram 159, March 31, the Department requested the Embassy to assess the political situation and to recommend actions which the United States should take to support the existing government, and, possibly, to strengthen the moderate elements within the government. (Ibid., 724.00/3–3155)
3. Despatch 421 from La Paz explained that the present unsettled situation arose primarily from the soaring cost of living and from a demand by the Central Obrera Boliviana, the Bolivian workers’ confederation, for a 100 percent wage increase and a price freeze. The government, however, allowed only a 75 percent increase in wages and permitted some prices to rise. (Ibid., 724.00(W)/3–2555)
4. Walter Guevara Arze, Bolivian Minister of Foreign Affairs and Worship.
5. On April 4 the National Advisory Council advised the Export-Import Bank that it did not object to the loan. (Minutes of the Meeting of April 1, 1955, and Action No. 774; Department of State, NAC Files: Lot 60 D 137)
6. Telegram 179 from La Paz reported that if the Export-Import Bank decision were favorable, the Foreign Minister was hopeful that an announcement could be made prior to the April 9 celebration of the anniversary of the MNR revolution. (Ibid., Central Files, 824.10/3–2955)