840.51 Frozen Credits/7047
The Secretary of State to the Ambassador in Bolivia (Boal)
The Secretary of State refers to the Embassy’s despatches no. 69 of June 15, 1942, no. 149 of June 25, 1942, and no. 223 of July 22 [2], 1942,15 and to the Embassy’s telegram no. 535 of July 13, 1942, and to previous correspondence in connection with the ineffectiveness of the Bolivian controls of inimical firms in that country.
The Secretary of State also refers to the visit to Washington of Mr. Humberto Cuenca, General Manager of the Central Bank of Bolivia, for the purpose of attending the Inter-American Conference on Systems of Economic and Financial Control which was held in Washington from June 30 to July 10, 1942.16 A circular instruction outlining the results of this conference will shortly be transmitted to the missions.
At the first working session of the conference, each delegate was asked to explain the steps already taken by his Government to implement Resolution V adopted at the Third Meeting of the Ministers of Foreign Affairs at Rio de Janeiro. Mr. Cuenca stated in substance that although Bolivia had promptly adopted a freezing decree, it had been found impracticable to apply its provisions rigorously to certain large German commercial firms which are essential to his country’s economy, owing to their predominance in the distribution of prime necessities in certain outlying areas. He stated that he hoped that the conference would look sympathetically upon Bolivia’s special predicament in the field of economic and financial controls of politically undesirable firms.
Thereafter certain members of the United States delegation discussed the situation privately with Mr. Cuenca. It was explained that this Government viewed with concern the continued operation, with the consent of the Bolivian Government, of dangerous organizations, such as the Eisner firms and Kyllmann, Bauer. It was stated that while Bolivia’s problems may be difficult because of the past [Page 624] importance of these firms, nonetheless this appeared to be a situation which could be promptly remedied by action on the part of the Bolivian Government to foster other clean organizations to take over the functions of the German firms and ultimately to eliminate them. Mr. Cuenca stated that he had given the matter serious consideration and that although he himself is completely anti-Nazi and would like to wipe out the German firms, there is neither sufficient technical skill nor financial resources available in Bolivia to enable the Bolivian Government to take this action on its own initiative without assistance from the United States. It was explained to him that this Government would be pleased to consider, with representatives of the Bolivian Government, the question of financial assistance and the elimination of German firms, and there was again strongly emphasized the necessity of the Bolivian Government’s taking strong action to this end. At one point in these conversations Mr. Cuenca stated that he felt it incumbent upon him to make a general reservation to any resolutions adopted at the conference calling for strong controls over the Axis financial and commercial transactions within the American republics, but he did not press this question further and made no reservation to any of the resolutions adopted.
Upon receipt of the Embassy’s telegram no. 535 of July 13, it was decided that instead of discussing the problem further with Mr. Cuenca, it would be desirable to arrange for a meeting between the Ministers of Finance and National Economy and Mr. Cuenca, together with certain responsible officers of the Department. This meeting was held on July 16, and a copy of the memorandum of conversation is transmitted herewith17 for the Embassy’s information. It will be noted that neither the Minister of Finance nor Mr. Cuenca was able to attend this meeting, but that it concluded in the determination to pursue the discussions further in the effort to arrive at a concrete formula for the elimination of German firms.
The Embassy will be informed of further developments in connection with this matter.