Bolivian Tungsten, Pati

Simon Patino, the world's richest Bolivian, returned to Manhattan from Panama last week at a critical moment in U.S.-Bolivian relations. U.S. industry badly needs Bolivian tungsten, in which Patino has an interest, and Bolivian tin ore, over half of which he controls. Last week the U.S. arranged to get the tungsten, but it is still not getting the tin ore.

Cynical Americans could conclude that the Bolivian Government is still a Patino government, although Patino has not set foot in the country for 17 years. Equally cynical Bolivians, on the other hand, deduced that the U.S. was run by the Rockefellers. This mutual misunderstanding made an enlightening case history in the shortcomings of U.S.-Latin American relations.

Bolivia is among the most pro-Nazi countries below the Rio Grande. It is also indescribably poor, and its cost of living (it imports most of its food and textiles) has nearly tripled in the past two years. Bolivians assume Germany will win the war unless the U.S. implements its Good Neighbor policy with a tough sense of economic and political realities. The tin deal did little to reassure them.

Bolivia lives mainly on tin exports, and when the U.S.'s far-eastern supply was threatened, Bolivians assumed the U.S. would want their total production. That could be almost enough for U.S. needs provided the run-down Bolivian mines were fixed up with new equipment, including a railroad connecting Bolivia's interior with Brazil (and with tidewater).

But when the Bolivians sought a $10,000,000 loan, the U.S. State Department turned them down. Reason: Bolivia expropriated $17,000,000 Standard Oil (N.J.) properties in 1937, and has not yet indemnified Standard. The textbook justice of the State Department's stand did not impress the Bolivians. When their Government asked its Senate for authority to negotiate with Standard, the only result was a wave of anti-U.S. sentiment that still boils in the streets of La Paz.

Considered as a step toward hemispheric self-sufficiency, the rest of the tin deal was the rest of a fiasco. Patino's companies are interlocked with the British-Dutch cartel, and he controls a smelter in Liverpool. His ore has always been smelted there, crossing the Atlantic twice before it gets to the U.S. After prolonged negotiations, Jesse Jones contracted with a Dutch firm to smelt Bolivian ore in Texas--with a Dutch East Indian ore admixture, which keeps U.S. tin technology tied to the Far East. To feed the Texas smelter he secured less than half of Bolivia's production--a mere 18,000 tons a year. Patino's ore still goes to Liverpool for smelting, then returns to the U.S. Patino men said last week they have had no trouble at all getting ships.

With this experience behind them, some Bolivians wondered whether Washington would let their tungsten (invaluable in hard steel alloys, especially for the cutting edge of machine tools) slip through its fingers too. Early this year Jesse Jones's No. 1 Latin-American agent, Cottonman Will Clayton offered to buy the entire Bolivian output (up to 4,000 tons a year) for 85-c- a lb. The Japanese countered with an offer of $1.15. Bolivia's small mine owners and labor leaders at once went pro-Japanese. The Government, already in trouble over its attempt to settle with Standard Oil, called off the tungsten deal, and the entire cabinet thought it prudent to resign. But last week all but one of the Cabinet members were back. Will Clayton had raised his offer to $1.05--just high enough to permit the Bolivian Government to close the deal. Last week the contract was signed for 100% of Bolivia's tungsten for three years, including Senor Patino's.

Like a woman asserting her independence, devotion and venality in the same breath, Bolivia meanwhile continued trying to explain herself to the righteous U.S. State Department. Fortnight ago she expropriated her Nazi-owned airline, Lloyd Aero Boliviano; asserted her anti-Rockefeller complex by offering the Nazis compensation; last week coyly gave the franchise to Pan American-Grace Airways.

This file is automatically generated by a robot program, so reader's discretion is required.