724.3415/2090 13/14
Memorandum by the Assistant Secretary of State (White)
Mr. Espil called and showed me confidentially a telegram from his Government giving what was apparently the Paraguayan reply to the previous Argentine suggestion of a truce of thirty or forty days on the basis of actual possessions. The Paraguayan Government definitely rejected this proposal.
Mr. Espil asked what the developments were and I told him of the telegrams we had received from Santiago and Lima. He had heard nothing about it from his Government. I told him how the Neutrals felt; that I had advised Mr. Mendoza, at their request, as the suggestion appeared to have originated from the Peruvian Government, in order that he might inform his Government, and that furthermore I had answered the telegrams from our Embassies in Chile and Peru stating that the Neutrals felt that the proposal to have a conference at which the Neutrals would have but one representative would in effect exclude the other Neutrals and that therefore they were not in favor of it but that they wished to keep the Neutral Commission intact. I said that of course we welcome the cooperation of the other countries and the interest they are taking in the matter and desire to work with them to the fullest possible extent, and I felt that in advising us in advance of the nature of the proposal they would probably want to be told of any features in the program which the Neutrals did not feel they could support. This, of course, did not mean our rejection of the whole project—I thought it opened the way for more active participation by the four neighboring countries if they were willing to take the responsibility therefor—and I sincerely hoped they were.
[Page 190]I then told Mr. Espil, for his personal and confidential information, that the object to which the Neutrals are working is this: We support the declaration of August 3. We suggested the line of June 1 for the cessation of hostilities as it offered the possibility of immediate acceptance, we thought, by both sides, with honor to both and a support of the August 3 doctrine. Bolivia had wanted to maintain her actual possessions. We had offered a way out by suggesting that a definite date be fixed on which the forts would be given back if the negotiations between Bolivia and Paraguay for an arbitral settlement did not result in agreement. Under this proposal, Bolivia of course maintained the liberty to make any proposal she wanted in the negotiations for the arbitral settlement.
I said that I am not in favor of maintaining inexorably our suggestion for the cessation of hostilities on the June first line. I am perfectly willing to give up this point if it will lead to a definite settlement and as soon as I see that Bolivia is ready and willing to make a definite settlement I will give up this position. I am not willing to give it up, however, until I see it will do some good to do so.
Our next step will depend very much on the Bolivian answer to our note of August 1757 in which we asked for definite suggestions but, unless that answer is helpful, I thought the Neutrals should then ask Bolivia whether, in making her proposal to maintain actual possessions until the sovereignty thereof is settled by an arbitral agreement, she would be willing, in case after one year’s negotiations with Paraguay do not result in an agreement, to submit the proposals made by both sides for an arbitral agreement to say the Seventh Pan American Conference in Montevideo, or the Hague Tribunal, or any other similar body, together with a statement of the reasons why each side finds certain proposals of the other unacceptable and considers them obstructive and unfair, in order that that body might pass on the merits of the demands of each side and then draw up itself a treaty for the arbitration of this matter, based on the suggestions of the two parties and which it should consider equitable to both. It would be provided that if Bolivia did not ratify this arbitral agreement six months after it was drawn up and presented to it the forts would then go back to Paraguay.
This proposal would mean that Bolivia had had the choice of giving back the forts on a given date, if agreement was not reached prior thereto with Paraguay, Bolivia being free to make any proposal she wanted regarding the arbitration, or of continuing with the occupations until the whole Chaco matter was settled by arbitration but [Page 191] having to submit to the decision of a third impartial body as to whether the conditions she exacted were fair or not.
Should this proposal not be accepted then I thought the Neutrals should ask Bolivia what zones she had in mind in suggesting that the matter be submitted to arbitration on determined zones. Paraguay would be asked the same. It was to be expected that of course there would be a certain part of the territory which both sides would agree should be submitted to arbitration and zones which each party would ask to be excluded from the arbitration and recognized as appertaining to it. Each Government would then be asked whether it would agree to exempt the zone or zones of the other from arbitration provided the zone or zones suggested by it should similarly be exempted from arbitration. If this were done, a zone agreed to by both would then be submitted to arbitration. If this should not be accepted, then both Governments would be asked if they would submit their whole dispute to arbitration without mentioning reserving any zones whatsoever but leaving it up to the Arbitral Tribunal to decide all such matters. Each side could of course allege that it had special rights and titles to certain zones and the Arbitral Tribunal would take this into consideration. Should Bolivia reject this, then the emphasis would be off the June 1 line and on the principal question, namely whether Bolivia would submit the whole Chaco matter to an arbitral settlement. Should Bolivia or Paraguay refuse, then I thought the Neutrals should call in the neighboring countries; explain to them what they have done and how the matter stands; explain the refusal of one side or the other to submit the matter to an arbitral settlement, and consult as to what measures should be taken in view thereof to prevent hostilities. I said that the question would then be so defined that public opinion throughout every country in America would clearly see the issue and support the Neutrals and the neighboring countries in any measures which might be taken to prevent hostilities.
Mr. Espil said he thought that this was a well thought out reasonable proposal and was the line to proceed on if we had reasonable men to deal with. If there were a different Minister of Foreign Affairs in Argentina, there would be nothing he would like better to do than cooperate with us and help carry out this program. Conditions being what they are, however, he rather jumped at the Peruvian proposal of carrying on the negotiations somewhere else because he said, quite frankly, that if the negotiations are carried on here he knows that sooner or later he will be in an open break with his own Minister of Foreign Affairs, Saavedra Lamas.
[Page 192](The above program of the Neutrals, which I outlined to Mr. Espil, I talked over with the Neutrals in a meeting of the Neutral Commission this morning, and all agreed with me that that was the line on which we should proceed).