BOLIVIA: Nationalization Day

On a windswept field near Bolivia’s big Catavi tin mine, President Victor Paz Estenssoro stepped to a rude table one day last week and with a golden pen signed the decree nationalizing the country’s three big tin companies. Twenty thousand black-shawled women and tin-helmeted men yelled vivas. A leather-jacketed Indian stepped to the President’s side and sounded the ancient Inca battle call on a curved bull horn. That night bonfires burned all over the Bolivian Andes, and the cobbled streets of La Paz echoed with the din of jubilant partisans firing off the rifles and pistols they had seized from government arsenals and routed army units last April during the uprising of Paz Estenssoro’s totalitarian Movement of National Revolution.

Time to Explain. The tin decree, climaxing long years of bloody struggle, was the most important act of nationalization in Latin America since Mexico expropriated its foreign oil companies in 1938. The three nationalized companies—Patińo,* Hochschild, Aramayo—produce 72% of the country’s tin. Though Bolivia now mines only 15% of the world’s tin, it still accounts for virtually all that is produced in the Western Hemisphere. And tin is still backward Bolivia’s one cash crop, providing 80% of the country’s foreign exchange. Last week’s decree set a tentative valuation on the expropriated properties of $21,750,000—barely a third of what the companies think their investments in Bolivia are worth.

Nevertheless, President Paz Estenssoro hopes to make a peaceful settlement with the big three. He has insisted that “lawful compensation must be paid.” On the eve of nationalization, the companies received what appeared to be a demand for $505 .million in unreported foreign exchange and $15 million in allegedly evaded income taxes (TIME, Nov. 3). Last week the President’s experts explained that this was not a final reckoning. The implication was that the tin companies, if they agree to dicker instead of fighting the regime by litigation and fomenting embargoes abroad, might still wind up with some cash compensation for their shareholders (including the U.S. citizens who reportedly own 26% of Patino Mines & Enterprises stock).

Time to Restrain. In the hope of striking such a bargain, President Paz Estenssoro has offered engineers and other foreign employees of the three companies security of tenure, salary and other contract benefits if they will keep on working for the government’s newly constituted Bolivian Mining Corp. But coming to terms with the tin barons and their experts may not be the President’s toughest problem. Speaking to the miners at Catavi last week, Labor Boss Juan Lechin, Bolivia’s left-wing Minister of Mines, said: “Nationalization must be carried out without payment to the thieving tin barons.” Now, more than ever, Paz Estenssoro’s chances of bringing off a miracle, of taking over tin without wrecking his country’s precarious economy, depended on his ability to hold his most fanatical followers in check.

*Whose president, Anterior Patińo, had troubles of a different sort in the U.S. last week (see PEOPLE).