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

257. Letter From the Ambassador in Bolivia (Drew) to the Assistant Secretary of State for Inter-American Affairs (Holland)¹

La Paz , November 8, 1955 .

Dear Henry : I assume that John Topping has kept you informed of the attitude of UNTAA toward our proposal to send a Fiscal Mission to Bolivia.

I was taken very much by surprise to learn on November 3 that Martinez Cabañas² and Karasz were in town. There has been some reference to the theory that Martinez Cabañas came here following attendance at a meeting on administrative affairs in Montevideo, but I am convinced that his trip to South America was primarily in connection with the proposed Fiscal Mission to Bolivia. In any case, at the request of Señor Oropeza Castillo³ for a meeting, I invited him, Martinez Cabañas and Karasz to come to the Embassy that same evening for a talk.

I saw Señor Guevara on the afternoon of November 4, primarily in connection with the plans for your trip. He mentioned that the note accepting our proposal on the Fiscal Mission was ready but that he had held it up when he learned that Martinez Cabañas was coming to La Paz to discuss the subject. He saw Martinez Cabañas later in the day but I have not seen Guevara since that time and Martinez Cabañas did not see fit to acquaint me with the nature of the conversation when I saw him again on November 5. Future events may shed some light on it.

I enclose two memoranda prepared by Mr. Gilmore summarizing the conversations which were held with Martinez Cabañas, Oropeza and Karasz on November 3 and 5.⁴

There is no doubt in my mind that Martinez Cabañas came to Bolivia with one purpose in mind, namely, to block the Fiscal Mission if possible and failing that to convert the Stabilization Council into a UN-dominated instrumentality. In our first conversation I was naive enough to proceed on the assumption that all of us present were imbued with honest good will. Before the conversation was over, however, I realized that I was dealing with a clever individual who carried a sharp axe behind his back. In the second conversation, particularly toward the end, the cloven hoof really emerged into full view. It ended on a superficially polite note but I think neither Martinez Cabañas nor I was under any delusions about just where we stood. I consider the attitude of UNTAA in this whole affair to have been improper and its action in sending him here to be opposed to our best interests. I think it is sufficient grounds for us to re-evaluate our whole attitude toward that organization.

Señor Guevara, who left with the President for the interior on the morning of November 5, is only due back today and consequently I do not know how successful Martinez Cabañas has been in his wrecking tactics. I am therefore writing this in ignorance of whether the note to us will be sent or not. In any event, however, I greatly fear that Martinez Cabañas has at least been successful in poisoning the well. There is no doubt in my mind that he has planted the seeds of suspicion in the minds of the Bolivians that we are attempting to set up an American-dominated super-ministry to run Bolivia’s finances. Whether Guevara sends the note accepting the Fiscal Mission or not, I fear that serious harm has been done by Martinez Cabañas to this whole project.

I very much want to discuss this problem with you. I am sure you can do a lot to help restore Bolivia’s confidence in the purity of our intentions with respect to her finances.

Incidentally, this letter has been read and concurred in by Oscar Powell ⁵ and Gene Gilmore.⁶

Sincerely,

Jerry

1. Source: Department of State, Holland Files: Lot 57 D 295, Bolivia. Official Use Only.
2. Gustavo Martinez Cabañas, Deputy Director of the U.N. Technical Assistance Board.
3. Alejandro Oropeza Castillo, Resident Representative of the U.N. Technical Assistance Administration.
4. Neither printed.
5. Oscar M. Powell, Director of Technical Cooperation, Institute of Inter-American Affairs.
6. A handwritten notation on the source text by Topping to Pearson indicates that the Department replied in telegram 90, November 14. Telegram 90 recommended that Karasz be designated as an adviser to the proposed fiscal stabilization council, reiterated U.S. determination to collaborate with the U.N. technical mission, and stated, “In view our primary responsibility Bolivia we would insist that in unlikely event conflict between suggestions US and UN advisors our views prevail. This seems so obvious as not to require further clarification. Provided Bolivians fully appreciate it, as they apparently do, nature recent actions UN representatives in Bolivia are of little significance.” (Department of State, Central Files, 340.3124/11–1055)