Office of the Historian

811.515/1411: Telegram

The Secretary of State to the Ambassador in Bolivia (Boal)

Washington, July 10, 1942—8 p.m.

440. Your 507, July 6, 5 p.m. The currency problem was discussed with Cuenca July 8. He insisted that he did not receive notice of the United States controls over currency until June 14 after he had cabled Buenos Aires for information and had himself approached the Embassy. Apparently this was due to the delays inherent in notifying the Foreign Office and the Minister of Finance about this Government’s controls.10

In light of Cuenca’s vehement insistence that he did not receive prompt notice, his further statement that he suspended the purchase of dollar currency immediately after he did receive notice and the small amount involved, the Department feels that Treasury cannot refuse to take the $15,000 which the Central Bank now holds. The Department recognizes the need for bringing pressure on the Central Bank but feels that under the present circumstances such pressure will have to be exerted in other ways. Accordingly, Cuenca is being informed today that Treasury will accept the $15,000.

The agreement to accept the $15,000 is predicated upon the assumption that Bolivia has now instituted complete controls over dollar currency along the lines previously suggested by the Department and will effectively enforce such controls. Cuenca is apparently unaware of the fact that such controls have already been instituted. Treasury is handing him a memorandum outlining the types of controls which this Government desires to see instituted in order that he may take appropriate steps to put such controls into effect to the extent that this has not already been done.

Please cable whether the Department’s assumption is correct and confirm whether the Central Bank is now refusing to purchase dollars and is accepting such currency on a collection basis only.

Hull
  1. The Ambassador in reply to this assertion observed in his telegram No. 534, July 13, noon, that the Embassy note on the subject had been delivered to the Minister of Finance on May 29 and that the delay was due to the failure of the Minister to advise the banks (811.515/1434).↩