824.50/145

The Bolivian Minister of Finance (Espada) and the Bolivian Minister of National Economy (Crespo Gutiérrez) to the Secretary of State

[Translation]

Mr. Secretary: We have been honored to receive Your Excellency’s note of today’s date, summarizing the results of our discussions during the past few weeks concerning measures of economic and financial cooperation between Bolivia and the United States. We agree with Your Excellency that these conversations have resulted in arrangements which should be of great economic benefit to our countries and which at the same time contribute definitely toward the strengthening of inter-American cooperation.

The recommendations of the United States Economic Mission have been considered by us in their various aspects, and we agree that these recommendations comprise a practicable working plan for economic developments in Bolivia. We likewise agree that the establishment of a Bolivian Development Corporation should provide an efficient means by which these developments can be carried out. It is the intention of the Bolivian Government to give every possible assistance in facilitating the establishment and the operations of the Corporation.

In view of the large amounts of materials and financing that would be involved in the execution of the entire long-term program recommended by the Economic Mission, which totals approximately $88,000,000, the recommendation of the Economic Mission that the program be carried out by degrees, or in stages, appears logical, utilizing in the first stage of the program $26,125,000, of which $12,000,000 will be allotted to highways; $6,625,000 to agriculture; $5,500,000 to petroleum; $1,000,000 to mining; and $1,000,000 to health and sanitation.

As outlined in Your Excellency’s note, the Bolivian Government is prepared to allot funds in the amount of $9,000,000 for the capital of the Bolivian Development Corporation, such funds to be provided during three consecutive years at the rate of $3,000,000 per annum. In addition, the Bolivian Government is prepared to provide $1,500,000 for the use of the Bolivian Development Corporation in carrying out highway developments.

[Page 608]

The Government of Bolivia agrees that the credit of $15,500,000 which the Government of the United States has agreed to extend through the Export-Import Bank of Washington for the developments in the first stage of the long-term economic program should constitute an exceptionally useful form of cooperation between the United States and Bolivia. Likewise, the additional funds provided by agencies of the Government of the United States—$2,125,000 for assistance in increasing production of rubber, and the grant of $1,000,000 for health and sanitation projects—will be of great assistance in these specific fields of activity. The offer of the Treasury Department of the United States to enter into a monetary stabilization arrangement involving up to $2,000,000 for the stabilization of the dollar-boliviano exchange relationship is in itself fully appreciated by our Government, but because of the difference in views concerning certain provisions of the proposed arrangement, this matter must be postponed for further detailed consideration. The agreement of the Export-Import Bank of Washington to establish special short-term credits of up to $2,000,000 for the Banco Central of Bolivia, should also be a very beneficial measure of financial cooperation between the United States and Bolivia.

The favorable disposition of Your Excellency’s Government to enter into conversations with the Government of Bolivia with respect to additional financing of highway work in the event it is found that the $12,000,000 allotted for highways in the first stage of the program is not sufficient to complete the projects which are approved, is likewise a foresighted measure of cooperation. In this respect, we have the honor to inform Your Excellency that the Government of Bolivia has decided to allot a special fund of $1,500,000 for highway works in order that the important construction of the Sucre–Camiri highway may be carried out. Likewise, the favorable disposition of the Government of the United States to enter into conversations with the Government of Bolivia concerning cooperative financing of the Villamontes irrigation project, when the plans for that project are prepared, reveals in our judgment a high spirit of collaboration on the part of Your Excellency’s Government which we are pleased to recognize. These conversations, both with respect to highway works and with respect to irrigation works, will depend, as has been agreed, on the three requirements mentioned by Your Excellency in the note to which we are pleased to reply.

Our Government is certain that the financial cooperation of the United States, which Your Excellency mentioned with respect to the carrying out of the second stage of the long-term program, will encounter no obstacle in becoming opportunely practicable, since the Government of Bolivia is expecting the best results from the plan [Page 609] which is to be initiated and it has the fullest confidence that it will be able to depend always upon the assistance of the United States.

The Government of Bolivia is of course aware of the very great need in the United States for materials for the manufacture of war matériel. Since the Economic Mission, however, based its decisions concerning the projects to be included in the first stage of the program upon the estimated availability of equipment and materials in the United States, the Government of Bolivia is confident that the Government of the United States will make every effort to facilitate the exportation to Bolivia of the necessary equipment and materials.

The Government of Bolivia is on its part doing everything possible to facilitate and increase the provision to the United States of the strategic materials which are produced in Bolivia. We agree with Your Excellency that the recent arrangements for the exportation of practically the entire Bolivian rubber production to the United States, the recent revision of the agreement concerning the sale of a large proportion of Bolivian tin production to the United States, and the present discussions concerning revision of the arrangements for shipment of Bolivian tungsten to the United States should all constitute very practical measures for implementing this policy of the Bolivian Government.

The Government of the United States may be sure that it is the intention of the Government of Bolivia to continue and to extend the measures of control over commercial and financial operations of persons and entities whose activities are inimical to the security of the hemisphere.

We are pleased to inform Your Excellency that we have discussed with the President of the Foreign Bondholders Protective Council83 the possible inauguration of discussions with a view to servicing the Bolivian dollar debt. As a result of this preliminary exchange of views, we believe that it may soon be possible to find a mutually acceptable basis for subsequent formal discussions.

We avail ourselves [etc.]

Joaquín Espada
Alberto Crespo Gutiérrez
  1. Francis White.