824.2544/7–951
Memorandum of Conversation, by the Acting Director of the Office of International Materials Policy (Brown)
Subject: Bolivian Tin Situation
| Participants: | The Secretary |
| Mr. Symington, Administrator, Reconstruction Finance Corporation | |
| Mr. McKinnon and Mr. Allen—RFC | |
| ARA—Mr. Miller | |
| OMP—Mr. Brown |
Mr. Symington said he wished to discuss the Bolivian tin situation with me, as the mission which had been sent down to Bolivia reported rather explosive conditions there and he wished to cooperate with the Department in every way.
[Page 1158]Mr. Symington then reviewed the history of tin prices since Korea and said that the increase in price had been very costly to the American taxpayer. He said he felt the problem of buying tin and the problem of preserving the Bolivian economy ought to be treated separately, although he realized that there was a real political problem and would be prepared to cooperate as much as he could.
Mr. Symington said that if the State Department would tell him what price it thought he ought to pay to Bolivia to get things moving, he would pay it.
Mr. Symington said that the mission’s proposal had been suggested by Mr. Atwood, and Mr. Weaver had felt it should be supported.1 Mr. Symington felt, however, that there was a technical obstacle in that the waiver of smelting charges would result in larger quantities of low-grade ore coming to the smelter, which would mean the smelter would operate at a loss.
I said I agreed that we could not determine tin prices just on political considerations, but we could not ignore political considerations either. My desire was to get something moving. I asked whether some middle ground could not be found between the proposal of the mission and the proposal of $1.03, with retroactive adjustment based on the results of the current cost study, which had been Mr. Symington’s offer to the Bolivian Ambassador. Mr. McKinnon said that the mission’s proposal would have the effect of a price of about $1.20, that being the average smelting charge on Bolivian ores. Mr. Brown said that mathematically the mid-point between $1.20 and $1.03 would be about $1.12. Mr. Symington said he would buy that price and would make the Bolivian Ambassador an offer based on it right away. He said that the Johnson Committee2 was of the opinion that $1.10 might be about the right price for Bolivian tin.
Mr. Symington said he was very anxious to get away from the Singapore price, which he believed to be a manipulated price. Mr. Brown stated that the Department also saw merit in making a contract at a definite price rather than a contract tied to a market price.
Mr. Miller said he thought the Bolivian Ambassador might be willing to consider $1.12 and that he had pressed the Ambassador not to adopt an arbitrary and adamant attitude.
Mr. Symington then said he would call the Bolivian Ambassador at once and make him an offer of a contract at $1.12, with the price to be adjusted retroactively based upon the results of the cost study. He asked whether the Department would have any objection if he specified [Page 1159] that the adjustment should be either up or down. Mr. Miller said he was confident that it would not come out as a downward adjustment, but he saw no reason for not trying that out on the Ambassador.
- The joint State Department–Interior Department–RFC mission recommended that the Bolivians be offered an interim contract at the price of $1.03 and that smelting charges be waived, which would have had the effect of raising the net price offered for Bolivian tin concentrates to $1.20 per pound.↩
- Preparedness Subcommittee of the Committee on Armed Services, United States Senate. Lyndon B. Johnson was Chairman of the subcommittee, which was popularly known as the Johnson Committee.↩