811.20 Defense (M) Bolivia/509: Telegram
The Secretary of State to the Ambassador in Bolivia (Boal)
832. Reference Department’s 765, October 23, 6 p.m. and Embassy’s 983, October 28, 11 p.m.88 We are airmailing copies of a revised cinchona proposal and of proposed contracts with cinchona producers and with the Government quinine factory.
We agree in principle to the suggestions made in your telegram under reference, except point 1 as to prices.89
The revised proposed agreement between Defense Supplies and Bolivia is not greatly different, except in form, from the original proposal. Where changes in substance do occur, it is felt that they are in Bolivia’s favor. This is notably so in the case of prices of anti-malarial products, the offer for quinine sulphate USP XII having been revised upward from $23.50 to $28.34 per kilogram, f. o. b. ocean steamer Arica.
For various reasons, none of the Government agencies concerned deem it wise to accede to the price demands being made by Bolivian producers for high-content bark. Our offers for other bark are now being analyzed. While we want to increase available quinine supplies as much as possible, this does not obscure the unfortunate repercussions upon our over-all economic relations with Bolivia which would probably result from giving in on bark prices. Moreover, to do so would necessitate generalizing these concessions to other countries with whom agreements have been or are being made. In this connection and for your confidential information, Bolivia’s relative importance as a source of cinchona bark has definitely receded as a result of information recently obtained on other sources.
You are aware of our preference for an agreement with the Bolivian Government rather than a number of contracts with producers and with the factory. For this reason and for those sketched above, you are authorized and instructed, upon receipt of the documents, (1) to withdraw the original proposed cinchona agreement and (2) to replace it either by the revised proposal or by the program suggested in your telegram under reference, whichever appears to offer the best chance of acceptance.