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

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

La Paz, December 19, 1956.

207. Embassy telegram 205.² President Siles sent for me evening Dec 18 to express serious concern with initial reactions stabilization. Appeared particularly disturbed by Lechin’s attitude that program proving prejudicial interests laboring class and he could not continue support program.

President urged me recommend increase in stabilization fund and establish lower rate. I gave him no encouragement and subsequently sent word through FonMin that after consulting Eder, Moore, Embassy staff, et al, attitude of continuing firmness in support stabilization program was felt to relieve situation.

FonMin confirms reports from other sources that group left wing deputies interpolated govt on stabilization afternoon Dec 18. Cabinet unwilling participate debate has submitted resignation. Barrau expressed confidence Siles will not resign as reported other sources. Interpolation described by Barrau as representing culmination long preparation by group 14 left wing deputies aimed primarily at right wing Cabinet members. President meeting with group key deputies and members CPN and Cabinet standing by at palace. I urged Barrau reassure President our continuing moral support and endeavor stiffen his attitude in crisis.

Drew

1. Source: Department of State, Central Files, 824.10/12–1956. Secret; Niact.
2. Telegram 205 from La Paz, December 18, reported that the immediate reaction to the inauguration of the stabilization program was an increase in food prices and riots in the markets. (Ibid., 824.10/12–1856)