281. Telegram From the Secretary of State to the Embassy in Bolivia1
178. Encourage President to face initial adverse reaction with his characteristic courage and ride through this crisis. Present exaggerated prices reflect scarcity of supply which will tend to decline as products move to markets. Working classes naturally shocked since their wage increases have not yet been received and prices have not yet settled down.
Agree with your reassurance to President our earnest desire to give him every possible assistance in this situation but Bolivians themselves must face issue. Our position re necessity of proceeding with stabilization program as planned would be the same whether Siles or left wing heads government. As you emphasized to Siles and Lechin, departure Siles would not change criteria and would solve no problems this regard.
- 1.
- Suggest use of government transport if necessary to move goods.
- 2.
- Basic principle of world market prices for essential goods should continue. Suggest considerably lower price for bread (enforced by price control if necessary) to be financed by budget subsidy. Although kerosene probably not significant in cost of living, subsidization of this item might also be considered if important in quieting general public reaction.
- 3.
- Suggest all available means be used to supply meat to cities but warn against subsidy since present prices appear reflect scarcities.
- 4.
- Concerning exchange system, proceed as planned. Separate ICA telegram on support follows. Please report daily.
- Source: Department of State, Central Files, 824.00/12–1956. Secret; Niact. Drafted and initialed by Turkel.↩