434. Memorandum From Secretary of State Rogers to President Nixon 1

SUBJECT

  • Resumption of Commercial Sales of Stockpile Tin

Recommendation:

In the light of Ambassador Siracusa’s strongly reiterated warning that the initiation of stockpile tin sales now could lead to an irrational reaction in Bolivia which might threaten American lives and property,2 I recommend that you authorize a further temporary suspension of sales for a period not to exceed 90 days.3 We would plan to proceed with disposals before the end of that period, in order to take advantage of the favorable market, and would use the period or such lesser time as may be necessary to work out arrangements to minimize the risks to American lives and property.4

Background:

By memorandum of April 8, 1970, General G.A. Lincoln, Director of the Office of Emergency Preparedness, requested your decision on a difference of views between the OEP and the Department of State concerning commercial sales of excess stockpile tin.5

In a memorandum of April 29, 1970, Mr. Peter M. Flanigan informed General Lincoln that you did not at that time approve the sale of 18,000 tons of tin from the stockpile as requested and that the request would be reviewed by July 1 in the event that General Lincoln and the Department of State were unable to agree upon the proposed sale prior to that time.6

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As a result of continued high prices for tin, an anticipated shortfall in supply and the exhaustion of the International Tin Council buffer stock, pressure from U.S. and foreign consumers for initiation of a stockpile disposal program intensified during late April and May. At the same time, political tension in Bolivia appeared to be easing.

In an effort to be responsive to these pressures and to move toward the initiation of a tin disposal program, the Department instructed Ambassador Siracusa to determine Bolivian President Ovando’s attitude toward a modest disposal program in light of the new market conditions. While maintaining Bolivia’s basic opposition to disposals, the Bolivian President conceded that under existing market conditions some kind of action was required and he agreed in principle that some degree of stockpile sale was probably necessary.

At the specific request of President Ovando, two officers from the Department were sent to La Paz during the first week of June to consult with Bolivian officials confidentially on a proposed commercial tin sales program. These consultations, in which the Ambassador participated, elicited Bolivian acquiescence in a modest one-year sales program of 6,000 tons. The Bolivians indicated that if the program were held to 6,000 tons they would make only a pro forma protest.

Following the June meeting in La Paz, the Department opened consultations with the other major tin producers (Malaysia, Indonesia, Thailand, Nigeria, Congo (K) and Australia) and with the International Tin Council, looking to a disposal program limited to 6,000 tons annually, beginning on or about July 1, 1970. Some misgivings were expressed about the timing of our disposals but in the main those six producers and the Tin Council were reasonably satisfied and the Department had planned to conclude consultations in time for disposals to begin on July 1.

On June 17, Ambassador Siracusa urgently requested suspension of action leading to tin sales. The basic change in the situation between the Ambassador’s discussion with President Ovando on May 23 and the dispatch of his June 17 cable was a deterioration of the political situation marked by a week of rioting and disorder in Bolivia that left four persons dead and scores wounded.

In requesting the further suspension of tin sales the Ambassador warned of a serious danger to American lives and property that is likely to result from an irrational Bolivian reaction to U.S. disposals. Enclosed are a series of cables in which the Ambassador analyzes the situation and describes the threat (Enclosures 1. La Paz 2896; 2. La Paz 3235; 3. La Paz 3343; 4. Lima 3963; 5. La Paz 3590).7 It is noteworthy that [Page 1069]although President Ovando has as recently as July 22 reiterated his government’s assurances of making only a pro forma protest and providing protection should violence be directed against U.S. personnel and installations,8 the Ambassador discounts the ability of the Bolivian Government to make good on these pledges.

Ambassador Siracusa’s clear warnings about the dangers to American lives and property must be carefully weighed and appropriate steps taken to eliminate the risks or reduce them to a minimum. However, our legitimate tin disposal policies would be frustrated and a favorable market situation missed because of the possibility of an irrational Bolivian reaction.

I, therefore, propose that, if you concur, we inform the Ambassador that we are going ahead with our sales program not later than 90 days from now. We would instruct the Ambassador to: (a) consult with President Ovando as to the most appropriate timing within this period for such a disposal in order to minimize the political problems such action would pose for him; and (b) request the cooperation of the Bolivian Government to work out arrangements to minimize the risks to U.S. personnel should our disposal program lead to violent anti-American reactions and to prepare an appropriate contingency plan.

William P. Rogers
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 396, Stockpile. Secret. Attached to a September 5 memorandum from Vaky to Kissinger reporting that the President had approved Rogers’ recommendation and recommending that Kissinger sign a directive to the State Department and OEP informing the agencies of the President’s decision. Kissinger’s September 7 memorandum to Rogers and Lincoln, also attached, informed them that tin sales were further suspended for a period not to exceed 90 days and that plans to resume sales should be undertaken before the end of the 90-day period in order to take advantage of the favorable market. They were also to work out arrangements to minimize the risks to American lives and property.
  2. Telegrams 2896 and 3235 from La Paz, June 17 and July 7, respectively, transmitted the Ambassador’s warnings. (Ibid.)
  3. See footnote 2, Document 433.
  4. The President initialed the Approve option.
  5. See Document 431 and footnote 2 thereto.
  6. See Document 431.
  7. None printed. The five telegrams were also attached to Document 436.
  8. As reported in telegram 3590 from La Paz, July 23.