284. Telegram From the Secretary of State to the Embassy in Bolivia1
182. Your 220 Dec. 21 reassuring. In New York talk Friday afternoon Chavez similarly relaxed. He had just come from seeing Paz Estenssoro off to London and indicated complete support for stabilization plan. He predicted that COB would not attack stabilization but would ask for higher wages. Chavez said did not like subsidies any more than unrealistic exchange rates. He feels 1300 general increase and 3950 to compensate miners for loss of commissaries inadequate. Unconcerned by miners seizure of commissaries. He indicated complete agreement with both elements of basic US position.
Obvious that Chavez is in very close touch with situation and appears he will cause no trouble at least for present.
Encourage Siles to hold fast on wages. Wage price spiral cannot be broken if Govt gives way at beginning. Will send further guidance on this point after consulting with other Departments after Christmas.
In daily financial report useful have more analysis purchase and sale foreign exchange.
[Page 589]While not yet out of woods Department congratulates you on well done job.
- Source: Department of State, Central Files, 824.10/12–2156. Confidential; Priority. Drafted by Turkel and initialed by Rubottom.↩