824.6354/379
The Acting Secretary of State to the Bolivian Ambassador (Guachalla)
My Dear Mr. Ambassador: Some days ago you called and discussed with me the current tin negotiations being carried out between representatives of certain Bolivian producers and the Office of Economic Warfare and particularly the points of view in regard thereto of President Peñaranda as expressed in telegram No. 230 of July 21, 1943, received by you from your Foreign Office, a copy of which91 you kindly made available to the Department in an informal manner. The Department has been following these negotiations closely and officers of the Department have participated in them. I am glad to avail myself of this opportunity to explain the position of the Department with especial regard to the points raised in the telegram, thus supplementing the Department’s memorandum to you of July 28, 1943.92
The conversations between President Peñaranda and President Roosevelt have, of course, been carefully considered in the present negotiations and they have been largely based upon those conversations. In keeping with a fundamental point covered in the conversations, it has been made clear that there will be complete willingness on the part of this Government to extend the term of the tin contract which is now in effect for a period of two or three years beyond its present expiration date of June 30, 1945. It is believed that this will [Page 569] meet President Peñaranda’s desire to have the contract remain in effect for a total of five years.
The interested agencies feel, however, that it is impracticable at this time to establish a fixed or minimum price beyond June 30, 1945 in the absence of any means of foretelling at this time what an equitable price may be during the period after that date. An extension of the contract along the lines indicated would assure the Bolivian producers a stable market for their production of tin over a period of years and it would, of course, be the intention of this Government to conclude equitable price arrangements by mutual agreement from time to time.
Full and careful consideration has been given to the desire of the Bolivian Government to have the present price of 60 cents per pound of fine tin raised to 70 cents per pound during the unexpired portion of the existing tin contract. The interested agencies of this Government have come to the conclusion, however, that a price of 60 cents, which represents an increase of more than 25 percent over the original price under the existing tin agreement, is as much as can reasonably be offered, taking into consideration all factors of the situation. You will realize that the purchase of tin is accomplished with public funds appropriated by Congress. The Metals Reserve Company is already paying Bolivian producers a price substantially in excess of that for which tin can be acquired in other producing countries, and a further increase could hardly be justified under existing circumstances.
Should it prove impossible at this time to obtain an agreement on price for the unexpired portion of the present contract, I would suggest that the price of 60 cents might be maintained for an additional period of two to six months, on the same informal basis as has been used for the months of July and August 1943, without prejudice to either party in the establishment of a longer term contract price. The Government of the United States would be prepared either to continue the negotiations during this period in an effort to reach agreement or to suspend the negotiations and reopen them at a later date, whichever would be more satisfactory to the Bolivian Government and tin producers.
My Government is of course desirous of assisting the Bolivian Government to the utmost in so far as may be possible in stabilizing its economic structure. It is for this purpose that it has gladly extended credits to the Bolivian Development Corporation; has entered into long-term tin, tungsten, and rubber agreements; and is prepared to extend the term of the present tin contract. The plans of the Bolivian Development Corporation include an extensive program for the development of public works, for which credits extended by the Export-Import [Page 570] Bank will be available. So far as assistance to labor is concerned, the willingness of this Government to lend financial assistance in the implementation of the recommendations of the recent Joint Bolivian-United States Commission of Labor Experts has already been manifested. We are ready to enter into negotiations whenever your Government desires as to the scope of the assistance which can be offered to complement the expenditures which may be undertaken by the Bolivian Government and mineral producers.
If there is any phase of the tin negotiations which you wish to take up, the other interested officers of the Department and I will be glad to consider it with you at any time.
Believe me [etc.]