COMMODITIES: Help for Bolivia

The U.S., which already has an adequate tin stockpile, last week signed a contract to buy 10.000 tons of tin concentrates during the next year from Bolivia. The price: the New York market quotation at the time of delivery. For Bolivia, whose economy is almost totally dependent on tin production (tin exports give it more than 80% of its foreign exchange), the agreement meant a guaranteed market for a third of its output, and a chance to bolster its sagging economy.

The contract broke a long deadlock between the U.S. and Bolivia’s revolutionary government. Ever since the RFC stopped buying tin in quantity in 1951 because it thought the price (up from around 80¢ to $2 a Ib.) was exorbitant, Bolivia has suffered severe economic cramps (TIME, May 5, 1952 et seq.). Negotiations with the U.S. for a new, long-term contract were not helped when Bolivia nationalized its tin mines and offered to pay off investors, many of them in the U.S., at only one-third of the value of the tin companies.

But three months ago the Bolivian government, keenly aware that the U.S. (the world’s biggest tin consumer) would refuse to buy Bolivia’s tin unless some fair plan was worked out to repay the stockholders, announced an agreement insuring compensastion. On sales of tin at prices between $1.06 and $1.21½ a Ib., 5% of revenues will go toward compensation claims; between 90¢ and $1.05. Bolivia will set aside 2½%, between 80¢ and 89¢, 1%, and below 80¢, nothing. Even at that, it will take investors a long time to get their money. Current New York price for tin: around 81¢.