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

SUBJECT

  • Commercial sales of Stockpiled Tin and Their Impact on Our Relations with Bolivia

On September 7 you approved State’s recommendation to delay by 90 days the resumption of commercial sales of stockpiled tin.2 The additional period you authorized expired December 7. Acting Secretary John Irwin has requested a further suspension of 90 days to avoid further radicalization of the new Bolivian Government. (Memorandum at Tab A).3 [Page 1074]General Lincoln strongly opposes any further delay because of the possible adverse effect on your stockpile disposal program. (Memorandum at Tab B).4 OEP will not initiate action, however, until a decision has been made on State’s request for an additional extension.

Your decision of September 7 to delay tin sales was based on the need to work out a program acceptable to the Bolivian Government, then headed by General Ovando, in order to minimize the adverse reaction in Bolivia and reduce the threat to American lives and property. In fact State achieved an understanding with Ovando which would have permitted us to proceed with the sale of 6000 tons of tin, but Ovando was overthrown and replaced by General Torres before it could be implemented. Torres was expected to be more radical than Ovando, but he has taken a moderate approach thus far (including a commitment to abide by the Gulf Oil Company settlement).

State argues that a resumption of tin sales so soon after he took office would

  • —be taken by Torres as an attack on him and his government;
  • —give radical elements a strong anti-US issue, and would tend to push him in the direction of radicalization thereby jeopardizing the Gulf settlement (which should be pinned down by March) and our longer-term relations with Bolivia;
  • —additional time might permit the conclusion of an agreement with Torres similar to that achieved with Ovando.

OEP contends that continued failure to resume tin sales jeopardizes the entire stockpile disposal program. The OEP case acknowledges that the amount to be realized from tin sales ($23 million) is not large relative to the total disposal program ($750 million), but notes that Congress will be increasingly reluctant to grant further disposal authorizations (16 disposal bills are pending on the Hill) if the Administration fails to use the authority it already has for tin disposal. (OEP is being prodded by Representative Mendel Rivers)5 In addition, OEP argues that:

  • —the most recent delay is only the last of a series stretching back to 1968;
  • —tin sales at the level contemplated should not adversely affect the world market price of tin.

With respect to State’s position, OEP points out that Bolivia is inherently unstable politically and that it is unlikely that the situation will improve much in 90 days.

[Page 1075]

The tin sales issue is a dilemma to which there is no really good solution. The key questions to consider in making a decision which minimizes the adverse consequences to our interests are:

  • —Would a further 90-day suspension in tin sales really endanger the entire commodities disposal program?
  • —If not, would an additional 90 days make any difference in reducing the foreign policy costs of ultimately resuming sales?
  • —If so, how can the additional time best be used to achieve this result?

The immediate impact of a continued suspension in tin sales on the overall stockpile disposal program is not certain. The amount of money to be realized from tin sales is not great. Moreover it is by no means established that tin sales is the ruling factor in the passage by the Congress of the 16 pending disposal bills. It seems unlikely any action will be taken by the Congress during the remainder of this session regardless of actions on tin sales. Tin will be one factor during the coming session but only one of several.

On the other hand, the foreign policy costs of resuming sales in the absence of adequate preparation could be very great. Bolivia is in a particularly unstable phase and the Torres Government is more likely to over-react to tin sales than would a more solidly-based government. This situation is not apt to be much different in three months but a little time devoted to careful diplomatic and propaganda work might help to limit the reaction of the Torres Government when we do begin sales. Bolivia was not very much different three months ago than it is now either, yet we achieved a tacit agreement with Ovando before he has overthrown. A further delay, therefore, might reduce the foreign policy risks.

A major factor not present at the time of your earlier decision to suspend sales is the existence of the Allende Government in Chile. As yet Chile’s neighbors, including Bolivia, have taken a correct but cautious approach toward the Allende regime. If we give Bolivia a strong reason for reacting against us now, the likely result will be to align them more closely with Chile than would otherwise be the case. Moreover, the emergence of a more radical government in Bolivia, coming so soon after a Marxist victory in Chile, will be seen as another political loss for the US. This is by far the strongest argument for not resuming tin sales at the present time.6

If you do approve a further delay, State should be directed to use the extra time to make a maximum effort to work with Torres to reach an understanding with him similar to the one achieved with Ovando, [Page 1076]and to prepare a counter-propaganda campaign in Bolivia. Moreover, consultations should be held on the Hill to explain the reasons for delaying tin sales and to urge that consideration of the other disposal bills not be tied to the tin problem. Bill Timmons concurs.

Peter Flanigan concurs with understanding that delay would be for not more than 90 days.

Recommendation

That you approve delaying resumption of tin sales by no more than 90 days, with the understanding that State will undertake a program to prepare the Bolivian Government and people for an eventual resumption of tin sales, and that extensive consultations will be undertaken to explain our position to the Congress.7

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 267, Office of Emergency Preparedness, Volume II 11/69-12/71. Secret. Forwarded to Kissinger under cover of a December 7 memorandum from Nachmanoff, on which Kissinger wrote: “What is amount of money involved?” Another note, presumably by Haig, reads: “$23 million.”
  2. See footnote 3, Document 434.
  3. Irwin’s December 2 memorandum to President Nixon is not printed.
  4. Lincoln’s December 3 memorandum to the President is not printed.
  5. Attached to Lincoln’s memorandum at Tab B is a copy of an October 19 letter from L. Mendel Rivers, Chairman of the House Armed Services Committee, asking about the delay in the release of surplus tin from the stockpile.
  6. In the margin next to the last two sentences in this paragraph, the President wrote: “forget it—It will happen inevitably anyway—if it’s going to happen—Tin will not do it.” See Document 149.
  7. Neither the Approve nor Disapprove option is checked or initialed. The President drew a line through the paragraph and wrote below the options: “no—go forward with the sales as I ordered 18 months ago.” The President underlined “no” twice. This memorandum, however, is attached to a January 27, 1971, memorandum from Kissinger to Rogers and Lincoln informing them that the President had approved a further delay in the resumption of sales of stockpiled tin; see footnote 3, Document 439.