436. Action Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon 1

SUBJECT

  • Resumption of Commercial Sales of Stockpile Tin

Secretary Rogers and OEP Director, General Lincoln, agree that we should resume sales of stockpile tin, but they disagree as to when.

[Page 1072]

In the memo at Tab A, Secretary Rogers notes the strongly reiter-ated warnings of our Ambassador to Bolivia that an initiation of stockpile tin sales now could lead to an irrational reaction in Bolivia which might threaten American lives and property there.2 He accordingly recommends a delay for a period not to exceed 90 days. He proposes to use the delay to consult with Bolivia on the best timing of sales and on plans to protect American lives and property, as well as to make our own contingency plans. The Secretary stresses that the 90-day limit is a maximum, and that we would endeavor to initiate sales as soon as possible before that.

General Lincoln believes that 90 days is too long a delay. He notes that the world tin price has risen probably because of our evident delay in selling from our stockpile.3 A Tin Council meeting in October is expected to try to establish the present high price as the normal price which would be inflationary. If we continue to wait, therefore, we would surely receive industry and congressional complaints. The 90-day delay would also extend beyond the congressional elections

He also notes that we have already delayed tin disposals for almost 18 months because of instability in Bolivia. He questions whether Bolivian instability is serious enough to preclude our sales, or whether it will improve in the foreseeable future. Having been charged by you to proceed with actions to obtain receipts of $750 million from the overall stockpile in FY 1970 [ FY 1971], General Lincoln believes we must proceed with tin sales (approximately $23 million) as soon as possible to take advantage of current favorable market conditions for such sales.

We must weigh, on the one hand, the economic advantage of early disposal and the risk of industry complaints and unfavorable price movements if we do not; and, on the other, the risk of being inadequately prepared for a plausible threat to American lives and property.

In my view the risk of violent Bolivian reaction is a central consideration. It is sufficiently probable that we must give the Ambassador the benefit of the doubt and assume it as a likely occurrence. We should not risk being in a position in which we could be charged with not taking reasonable precautions to protect our people. Therefore, I believe we must provide for a period within which we could make immediate and appropriate preparations before initiating the sales.

Although General Lincoln recommended that sales resume prior to October 1, he acknowledges that this may leave too little time to [Page 1073]take precautions and would agree to a later deadline. On the other hand, reasonable plans to meet the dangers cited surely can be made in a shorter time than the 90 days proposed by Secretary Rogers, if we begin immediately.

A 60-day maximum period, i.e., November 1 deadline, should therefore be an adequate compromise which would accommodate the various considerations posed by OEP and State. Peter Flanigan concurs.

Recommendation:

That you instruct State and OEP to initiate tin disposal sales as soon as possible but not later than November 1, and to take immediately all feasible steps to protect U.S. lives and property in Bolivia against threats that may arise as a consequence.4

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 396, Stockpile. Secret. A notation indicates the memorandum was sent to the President at the Western White House in San Clemente. (Ibid., White House Central Files, President’s Daily Diary) It was forwarded to Kissinger under cover of an August 28 memorandum from Vaky which called Kissinger’s attention to Lincoln’s belief that the United States could not afford economically and budgetarily to wait the 90 days proposed by Rogers. Vaky reported that he had proposed a compromise at 60 days, to which Lincoln and Flanigan would agree, and expressed hope that the State Department would as well. (Ibid., NSC Files, Subject Files, Box 396, Stockpile)
  2. See Document 434.
  3. See Document 435.
  4. Neither the Approve nor Disapprove option is checked or initialed, but the President approved Secretary Rogers’ recommendation; see Document 434 and footnote 3 thereto. A handwritten note by Butterfield on the first page of the memorandum printed here called Kissinger’s attention to the Department of State memorandum.