740.24112RP/7–2044: Telegram
The Secretary of State to the Chargé in Bolivia (McLaughlin)
Washington, July 21,
1944—7 p.m.
765. Reference your telegram no. 1405, July 20, 7:00 p.m. The Department is clearing, in consultation with the Eximbank an instruction with respect to financial assistance and the replacement and expropriation program. The subject of financing is being discussed with the Eximbank, and the detailed instruction expanding the following points is expected to be sent within the next few days. In the interim, the Department’s views are as follows.
- 1.
- The Department considers it highly desirable that Bolivia proceed to carry out the expropriation and replacement of the important Axis firms. The Department has believed it to be the intention of the Bolivians to take such a step after recognition.
- 2.
- The procedures previously suggested in the Embassy’s telegram no. 515, February 19, 1944, with regard to a method of financing should be suggested to the Bolivians as desirable and feasible. The Department feels, as was indicated in the Department’s airgram A–545, June 15, 1943,45 that a financing procedure involving a double financing operation would be highly undesirable.
- 3.
- With reference to the Embassy’s airgram no. A–292, June 27, 1944, and to point no. 1 therein, the Embassy is authorized to state that this Government is willing to renew the assurances contained in the exchange of notes of October, 1943, should the Embassy consider that such a statement would impel the Bolivians to take action in connection with the replacement program. The Embassy should note the conditions and limitations set forth in the exchange of notes of October, 1943. The Department will inform the Embassy prior to July 26 if Eximbank should feel that this previous commitment should not now be again extended to the Bolivians.
- 4.
- With reference to paragraph no. 3 of the Embassy’s airgram no. A–292, June 27, 1944, the Department feels that present Bolivian legislation is not satisfactory to give clear title to a purchaser and therefore to serve as the basis for an extension of credit. The Department feels that measures should be taken by the Bolivians to prove both their ability and their sincere desire to carry out a replacement program before negotiations looking toward the establishment of any credits from the United States are begun.
- 5.
- An answer along the above lines may be made to inquiry by the Bolivians on this question of financial assistance. It will be desirable, however, if the Embassy’s answer is brief and general, and if the [Page 526] Embassy clearly explains that further detailed instructions are expected shortly, after which fuller discussion may be had with the Bolivians.
Hull