740.00112A European War 1939/31477: Telegram
The Chargé in Bolivia (Woodward) to the Secretary of State
[Received 6:48 p.m.]
994. For Hiss43 from Ramsey. The Minister of Hacienda44 informed me last night that the Bolivian Government will today or Monday intervene 19 Axis firms (including branches) and will officially promulgate the decrees governing interventorship which have been transmitted as enclosure 11 to despatch 1679 under date of May 14 and enclosure 2 to despatch 1712 under date of May 21.45 Interventors have been recommended by the Economic Defense Board and will be appointed by the interim President.46 In response to questions on my part Espada stated (a) that rules and regulations will be issued which will assure the interventors full powers of management and control, (b) that receipts of the intervened businesses will be blocked in accordance with the Washington Conference, (c) that no foreign exchange or credits will be granted in respect of intervened firms except to the interventor, (d) that the Superintendent of Banks will rigidly enforce the supreme decree of July 15, 1942, to prevent owners of the intervened firms from transferring the assets or obtaining money by loans against such assets, and (e) that the intervention will be gradually tightened and broadened toward the end of transfering the assets of intervened firms pursuant to a constitutional law to be approved by the Bolivian Congress. The firms to be intervened include all of the essential listed firms recommended to the Economic Defense Board by the Embassy and transmitted with despatch 1689, May 14,47 except Gundlach and Company, Imprenta Antoniana, and Helmouth Abel (whose only important asset, a launch, has recently been sunk). The branches of such firms will not be intervened by separate interventors at present but Espada assured me that selections will be made in the near future if such seems desirable or is recommended by the Embassy. He stated that he would work closely with the Embassy in selecting additional interventors or in selecting [Page 598] additional firms or branches to be intervened or in replacing interventors who proved ineffective. He said that we should not be too concerned if “the lid were not nailed down too tight on the German firms at present” and that we might rely on his cooperating with us in making the interventorships thoroughly effective. He stated further that the interventors would be directly responsible to the Superintendent of Banks and that he would superintend their activities rigidly through that official. He also said that he would immediately investigate whether any of the intervened firms had been guilty of exporting capital and that if [he] found any firm guilty of such offense he would give it the alternative of returning such capital to Bolivia or having its assets confiscated immediately. Espada showed me a list of 18 interventors who had been selected for appointment. Espada has stated that they may be replaced for cause if their actions do not prove satisfactory. He stated that six of the interventors had been of his own selection and that five more were equally competent men; he further stated that he was fearful of only one interventor on the ground that he was suspected of being favorably inclined toward Kyllmann, Bauer y Compafiia.
We consider this step together with Espada’s assurances of continued cooperation as a heartening step forward in proposed replacement program. [Espada?] also indicates the desirability of remaining on the job and working closely with the Bolivians during this critical interventorship stage and toward the end of stimulating more effective controls and preparing the stage for the presentation of a forced transfer law to the Bolivian Congress.
Wynn requests that Rosenthal, Lazo, Oppenheimer, Stone, and Kazen of BEW be advised of this development. [Ramsey.]