502. Telegram From the Secretary of State to the Embassy in Bolivia1

79. For Rubottom2 from Snow. Tung oil proposal3 passed Paraguayan Embassy today. Paraguay refused it stating political reasons prohibited voluntary undertaking this nature by GOP. Suggested counter proposal which might be acceptable GOP. This would permit entry this crop year ending October 30 of approximately 8 million pounds Paraguayan oil and acceptance 25 million pound annual quota provided Paraguayan share 33. On both counts this out of question. Paraguayan historical share U.S. imports period October 1, 1951 to September 30, 1956 slightly more [than] 11. [Page 1013] U.S. proposal would have divided 25 million pounds 22.325 million Argentina and 2.675 million Paraguay. This division based on relative percentages 1954 voluntary agreements.

Paraguayan refusal makes voluntary agreement impossible and unilateral action inevitable. Discussed situation with Hauge and we believe worthwhile for you discuss this GOP effort obtain acceptance U.S. proposal. Please advise for Hauge’s information if you willing undertake this in Asuncion.4

  1. Source: Department of State, Central Files, 411.006/8–857. Official Use Only; Priority. Drafted by Vaky and initialed by Snow. Repeated to Buenos Aires and Asunción.
  2. Rubottom was en route to the Economic Conference of the Organization of American States, held August 14–September 4, in Buenos Aires.
  3. The U.S. Tariff Commission was proposing a three-cents-per-pound import fee, rather than a quota system, for tung oil. (Department of State, Central Files, 411.006/6–1157)
  4. Despatch 85 from La Paz, August 9, reported that Rubottom would discuss the tung oil problem when he visited Asunción.