BOLIVIA: Republic up in the Air

Way back in 1868, so the story goes, Queen Victoria settled the Bolivia problem in her own imperious way. General Mariano Melgarejo, the Bolivian dictator of the day, had urgently invited the British Minister to attend a reception in honor of the general’s new mistress. When the diplomat frostily declined, the affronted dictator had him tied aboard a donkey, facing aft, and trotted him three times around the main square of La Paz. The minister fled home and told Queen Victoria of the outrage. “Where is Bolivia?” the Queen demanded. A map was brought and the Queen was tactfully shown that La Paz was much too far inland for the guns of a British man-of-war to force a suitable apology. So—says the legend—the Queen took a pen, scratched a few lines across the map and declared: “Bolivia no longer exists.”

Last week the picturesque, landlocked mountain republic of Bolivia was back on the map as never before in its obscure but violent 127-year history. Climaxing a long and bloody struggle, a new revolutionary government had nationalized the country’s three big tin companies and placed their mines under a new, government-run Bolivian Mining Corp. It was the most important act of nationalization in Latin America since Mexico seized the foreign oil companies in 1938. For better or for worse, it made the nationalist government of President Victor Paz Estenssoro the most important since SimÓn Bolivar founded the republic in 1825.

The Hand That Feeds. The audacity of the nationalization act, say Bolivia’s superheated nationalists, was equaled only by the necessity for it. Determined to assert the fact of their nationhood, they are willing to risk biting off the hand that feeds them. Tin pays for 50% of the food that they must now import from abroad. It is the foundation of their teetering economy, source of 80% of their foreign exchange and almost half of their government revenue. And for years Bolivian tin—and Bolivia itself—has been dominated by the three expropriated companies: Patiәo, Hochschild, Aramayo.

Starting at the turn of the century, when the world developed a ravenous tin appetite (for food containers, automobile bearings, welding), Simon I. Patiño. a cholo (half-Indian) from Cochabamba, parlayed an abandoned Bolivian tin mine into a fortune estimated at a cool $1 billion. His annual income used to surpass the government’s. He formed a world cartel, bought heavily into Malayan tin, and lived abroad like an emperor, marrying his son Antenor to a niece of Spain’s Alfonso XIII, his daughters to a French count and a Spanish grandee of such exalted lineage that he was entitled to keep his hat on while chatting with his king. Making himself Bolivian minister to France (to avoid the nuisance of paying French taxes), old Simón handsomely built his own legation—plus palaces in Biarritz and Nice—and three Bolivian mansions, costing $30 million, two of which he never even saw before his death in 1947.

Though son Antenor now heads the empire, he spends much of his time fighting separation suits with his Bourbon wife (current agreement: $50,000 a year) and getting into the tabloid press with various international beauties. Most active of the tin barons nowadays is shrewd, old (71), German-born Mauricio Hochschild. Reported to carry three passports (Bolivian, Argentine, Chilean), he operates mostly from Chile. Though not nearly as rich as the Patiños, Don Mauricio is not pinched for spending money. When Pan American’s Stratocruiser El Presidente was delayed by engine trouble in northern Brazil last year, he radioed the rival Panagra airline to send a DC-6 from Miami to fly him and his wife straight on to New York. It was just about the costliest private charter flight on record—$40,000, at $1,500 an hour. Don Carlos Victor Aramayo, another second-generation tin baron and owner of La Razón, the La Paz newspaper closed by mobs last April, now makes his headquarters in Switzerland.

The Hand that Digs. In classic contrast to these old-school enterprisers are the 35,000 Bolivian Indians who gouge the tin from the Andes’ granite flanks, more than two miles above sea level. One such is Sabino Perez, 41, a loader in the newly nationalized Patiño tin mine at Huanuni. Sabino, once a farmer, took the job five years ago, thinking that savings from his $1-a-day wage — Bolivia’s best —would soon enable him to buy a plot of windswept altiplano soil. But the temptation to swap merchandise from the company store for consoling chicha (native corn beer) proved irresistible. After deductions for store purchases and social security, his cash pay has averaged less than $1 a week, but will improve somewhat after the wage rise ordered upon nationalization.

For such pay the miners work eight hours underground in all-but-unbearable conditions. Some mine galleries driven deep into the Andes get so hot that drillers work in naked pairs, taking five-minute turns, one holding the pneumatic drill against the steaming rock face, the other standing behind and hosing his partner down. The brown jaw of each bulges with a wad of coca leaves, packed with enough raw cocaine to deaden pain and hunger. On tunnel walls, ore carts and mine portals dangle faded paper flags, the miners’ offerings to Pachamama (Mother Earth), the Indian goddess from whom they believe they are stealing the tin.

Highland Home. Above the slopes, where derby-hatted women miners pick and sort the greyish-blue lumps for milling, are Huanuni’s strings of company-built miners’ homes. Over a cow-dung fire, Sabino Perez’ wife cooks the evening meal of potatoes; because of the low boiling point at 12,800 feet they come out of the pan almost as raw and hard as they went in. Blue-cheeked children huddle inside the windowless, dirt-floored, one-room hut to escape the biting mountain wind. Within are a bed, two chairs, and a four-inch figure of the Infant Jesus on a homemade altar; magazine pictures of bathing beauties, futbol players and stern-faced priests are tacked indiscriminately around the walls. The house has no water or sanitary facilities; the nearest public bath is six miles away, but Sabino and his wife have not visited it this year. The only sign of civilization that the second biggest tin mine in Bolivia has brought to Huanuni is a 25-watt lamp that hangs incongruously from the thatched roof.

Bolivia is packed with such stark contrasts. It is a country of majestic mountain scenery and miserable human squalor, of tremendous natural resources and examples of their wretched neglect and abuse. To the west, condors soar over abandoned Spanish silver mines near icy, blue Titicaca, highest navigable lake in the world; in the remote east, ranchers graze their gaunt herds in a jungle reputed to be floating on oil. The Bolivian land itself is split in two—the barren, windswept uplands, fenced about by the snowy Andes; and the vast, green east, an unpopulated, trackless region of plains and jungle whose rich soil could easily feed all Bolivia if the mountain Indians would only move there.

March to the East. Brutal as any contrast of geography or industry is the cultural chasm between Bolivia’s Indians and the whites and mestizos of the cities. The Indians, the vast majority of Bolivia’s 3,200,000 inhabitants, live quite outside the national economy, even speaking Aymara or Quechua instead of Spanish. At home on the high, forbidding plateau since before the time of the Incas, they have developed oversize lungs to be able to live and work, dance madly and play reed pipes, get drunk and breed children in the cold, thin air. Their wants are simple. If they have any money to spare, they sew it up in a piece of cowhide and bury it. A storekeeper who has dealt with them for years gives this comprehensive list of the things they buy: cotton cloth for shirts, plow points, dye, thread, needles, old automobile tires to be cut into sandals, sugar, chocolate, rice, macaroni, aspirin, second-hand sewing machines.

Can the half-million modern Bolivians bring these backward highlanders to the ways of the western world? Amid the faded red-tile roofs of La Paz (pop. 321,000), world’s highest capital, rise such steel-and-glass skyscrapers as the 14-story University of San Andres. Shaggy llamas shuffle indolently to the side of the capital’s steep, cobbled streets to make way for Fords and Cadillacs. Government officials, demanding emancipation from the tyranny of tin, urge Bolivians to look eastward to the regions where the Andes fall away in giant green gorges called yungas to the Amazonian jungles and Chaco plains. With the aid of a $26 million U.S. Export-Import Bank loan, Bolivia hopes to finish a highway linking the mountain cities with Santa Cruz, capital of the plains, by late 1953. Brazil and Argentina are busy building railroads across the Chaco (see map) to open the area to the Atlantic. Bolivian nationalists, sponsors of a “March to the East,” talk paradoxically of luring foreign capital to develop the long-neglected oil of the Chaco.

179 Revolutions. But as Bolivians themselves say, theirs has been a land of the future for four centuries. Since Bolivar won them independence, they have had 179 revolutions, an average of one every nine months. They have lost four wars and half of their territory. Their outlet to the sea was lost to Chile in the “War of the Pacific” (1879-1884).

After the last bitter defeat by Paraguay in the Chaco war (1932-35), Bolivians took up ideas of social revolution from both right & left. Marxist socialism penetrated the universities. Officers of the defeated army organized totalitarian dictatorships. One dictator, pro-Nazi President Gualberto Villaroel, was overthrown after World War II in a fashion so violent that all the world remembers him—hanged from a lamp post before his palace. The downtrodden tin miners, finding a leader of their own in a magnetic, Marxist-minded ex-soccer star named Juan Lechin, rallied to his union and fought bloody battles with company-paid army garrisons.

In 1951, Villaroel’s Finance Minister, Victor Paz Estenssoro, ran for the presidency from exile in Buenos Aires. He won, only to have the result set aside by an army junta that grabbed power. Egged on by the tin firms, the junta risked the collapse of Bolivia’s tottering economy to wage a war of bluff with Stuart Symington, then head of RFC, trying to force him to buy Bolivia’s tin for the U.S. near the Korea-scare price of $1.90 a Ib. Soon food ran short in Bolivian cities. Paz’s nationalists shouted: “Bread for the People!” and raised him to power in a bloody revolt last April.

Professor in Power. Here was no half-literate army bullyboy. Paz was one nationalist fanatic who talked cold business like a businessman, a former economics professor who had balanced a budget and knew the cost of sweeping reform. But with his economist’s eyes wide open, Dictator Paz took the plunge by nationalizing tin at once in spite of his empty treasury. It was a political decision. “You forced me to do it,” he told a representative of the tin companies.

Bolivians are united behind his action as they have not been in years. They are generally convinced that 1) the companies were bigger than the state, 2) the companies were draining away resources without investing the profits in Bolivia, and 3) the tin barons themselves, particularly the heirs of Patiño, were living lives of luxury in the outer world while scorning their own country.

For all the finality of Paz’s nationalization decree, the tin companies are still fighting back. Because the bare book value of their property exceeds $60 million, they scoffed at the $22 million offered as indemnification by the government. They denounce the government’s recently presented “bill” for $505 million in unaccounted-for foreign-exchange funds as a brazen pretext for outright confiscation. They have not accepted the government’s invitation to negotiate indemnification which would include Patiño’s U.S. minority stockholders. Their apparent strategy is to wait until the stoppage of tin sales—through unofficial world embargoes or through the U.S. Government’s refusal to buy—brings the regime down.

The U.S. seems caught in the middle. To make a go of his gamble, Paz needs foreign technicians, credits to buy supplies, peace with his miners, and a long-term contract for sale of Bolivia’s tin. With huge private investments already under pressure in such neighboring countries as Venezuela, the U.S. cannot openly condone Bolivian nationalization. The RFC, which resumed buying Bolivian tin (at $1.17½ a Ib.) after Paz’s revolution, stopped when nationalization occurred. Yet from a strategic standpoint, Bolivia’s tin (only 20% of the world’s nowadays, but the sole supply in the western hemisphere) is essential to the U.S.

Reds in the Future? Can Paz, in a country whose whole history is a record of failure, achieve the miracle of making nationalization work? The first obvious threat to him is an army comeback. Observers on the spot report that the army was all but destroyed by the April revolution and, with the country behind him, Paz is probably safe against any rightist coup for a year or more. But what will happen when the Bolivian tin miners discover that working for the government is sadly like working for Patiño? When the Paz regime was organized, a diplomat observed: “There is a time bomb in that cabinet, and his name is Juan Lechin.” Now Minister of Mines as well as boss of the tin miners’ union. Lechin is the second most powerful man in Bolivia.

So far Paz has been able to control and even use him. But back of Lechin are Communist labor leaders, who also plan to use him. Such Marxists are spreading the word among Bolivia’s Indians that land reform is next, and a restlessness has already been noted on the altiplano. If Paz shoots the nationalist wad and fails, the door to Marxist revolution may be blown wide open. And if the Reds sneak in, Bolivia will indeed be back on the map of the world’s trouble spots.