Evening star., 1939-05-07

The government used this law, together
with other inducements in the form of
simplified exchange regulations to
high international quota allotted to Bo-
livia in that year of reviving world pros
perity.
Increasing world demand for tin
brought Bolivia exceptionally high
quotas in both 1896 and 1887, but owing
chiefly to lowered productivity of the
mines she was unable to take full ad-
vantage of them. OF 1886 quota of
$4,000 tons Bolivia was able to export
only $4,000 and of 1887 quota Of 49,4O0
tons only 25,50O Bolivia thus missed her
opportunity to pull out of the postwar
moraSs.
During 1898 the situation was re-
versed. Rising productivity in the tin
industry met declining foreign market
and a declining quota. Allotted 22,385
tons-about ATS per cent of the 1929 pro-
duction-Bolivia overshipped by ap-
proximately Is per cent. This must be
taken now out of her 1899 allotment.
which for the first half Of 1899 was
further reduced to 40 per cent of 1929.
So although tin prices are being MAIN
tanned at a high level-currently about
40 cents a pound-Bolivia may export
less than formerly and the flow OF
money into the country dwindles.
Mine Firms Triple Taxed.
A decline in receipts from tin exports
shows up Immediately in government
finances, which rest primarily upon the
tin industry. The mining companies are
taxed not only on their property values
but upon the expectation of their prod
uct, and, most important of all, on the
proceeds of their sales abroad
All exporters are required to turn
over to the Central Bank of Bolivia a
specified portion of the foreign exchange
they receive in the sale of their exports
abroad, In return for which they receive
Bolivian currency at low rate. The
government then sells this foreign ex-
change to importers at high rates-o-
converts it to its own use-the differen-
tial between buying and selling rates
constituting an extremely important
part of Bolivian government revenues.
The budget for 1899, for instance, total
ing more than 100000 900 bolivianos, in
cludes estimated receipts of 10000 900
bolivianos, or 40 per cent, from this
source. Customs-export and import
duties and internal taxes make up l68,-
600 900 boiivianos. Thus any major fi,1c-
tuation in tin expectation Immediately
affects the amount of export taxes COL
lected and the amount Of profit on forced
conversion of foreign exchange.
Although forced conversion Of foreign
exchange proceeds from exports Of min
comprising more than 95 per cent
of the value of the countrys exports
assures that substantial portion of the
return from exploitation of the country's
natural wealth remains within its bor-
ders, the mining companies resent what
they declare is confscation of their
| profits. The traditional rightist parties
are the political voice of these mining
interests, and it is partly against this
| extreme rightist agitation that the new
| Busch regime directs itself.
Conversion Portion Varies.
Although the portion of their foreign
proceeds which exporting companies
must turn over to the government
varies according to their size-the Patino
group thus converting more than the
Aramayo group-and according to the
f1neness OF the concentrates shipped, the
average conversion is 45 per cent Of the
proceeds, for which the exporter re-
ceives about 100 bolivianos to the pound
sterling about 20 to the dollar. At the
same time the government sells foreign
exchange to importers at about 200
bolivianos to the pound sterling and
bolivianos to the pound.
President Busch, as one Of his first
moves toward improving the government
financial position, intends to increase the
| portion Of foreign exchange proceeds
which exporters must convert at the
Central Bank. This he can do now by
decree, without waiting for the return
of Congress, now abolished.
Pending in the United States Congress
is strategic raw materials bill which
might go long way toward solving
Bolivia's problems by creating war stocks
of tin in the United States
The bill, passed by the House and
awaiting designation OF conferees in both
branches of Congress- carries 500, 0,OOO,-
900 for purchase of strategic and criti-
cal raw materials and authorizes ex-
change with Britain of wheat and cotton
surpluses for tin and rubber surpluses.
Whatever tin the United States may
acquire either by direct purchase or BY
exchange of surplus commodities would
prove a great boon to Bolivia, for the
metal would be taken out of buffer
stocks held by the London committee or
extra-quota production arranged for
with the producing countries.
BY assisting in the solution of Bolivia s
vital problem. it is asserted, the United
States might be a potent force for aban-
donment Of the dictatorship and restora-
ton of normal conditions in the Andean
republic.
World Committee Help.
Although Bolivlas economic difficulties
have shackled her, they would have been
far greater without some means by which
the lower cost producers of Malaga, the
Netherland Indies and Siam were kept
from flooding the market with tin. Al
though curtailment of exports In accord
ance with the lower quota under the in
ternational agreement might appear to