even before the Blue Book had been made public.40 Rather than weakening Villarroel and the MNR, Braden’s assault had apparently bolstered their nationalist appeal.
The Argentines agreed with U.S. diplomats that the Blue Book had shifted Bolivian public opinion in favor of Perón and “against foreign interference.” Indeed, Argentine diplomats now believed that Bolivian “men of Government and general opinion look upon Argentina with special sympathy” as fellow victims of U.S. aggression. That reaction seemed to be fairly pervasive across Latin America: the Blue Book generated more complaints about U.S. interventionism than alleged Argentine or Bolivian fascism. Because Braden’s efforts lacked international support, Ambassador Andrade argued, they were no longer of any “importance or danger” to either the Bolivian government or the MNR, although Braden’s “state of mind and position” remained a cause for concern.41 There was, in short, “no likelihood at all of any governmental change being effected in Bolivia” as a result of the Blue Book revelations. Although the Blue Book did not fail as miserably in Bolivia as it did in Argentina, like the FDA’s assaults, it only furthered the “fortress” mentality that now pervaded the Villarroel regime.42
Duly chastised, the State Department declined to take further opportunities to influence events, in part out of fear that more overt U.S. opposition might drive Villarroel completely into the “camp of Argentina.” Evidently speaking for the Frente Democrático Antifascista and anticipating that the Blue Book augured a more aggressive U.S. position, a Liberal leader approached the U.S. Embassy in May, requesting a pledge of U.S. aid should his party succeed in toppling Villarroel from power. The Liberals sought to guarantee wheat and meat supplies should Perón cut off shipments in retaliation for the removal of his supposed ally. Despite the U.S. Embassy’s support for a measure that would “counteract Perón’s victory in Argentina,” Secretary Acheson bluntly warned Adam that, to preserve the policy of nonintervention, “you should refrain from any discussion whatever of the matter.” Wanting to pursue a policy of “discreet and patient pressure,” some State Department officials hoped to use the tin contract to obtain a quid pro quo should Villarroel “go ahead with his undemocratic Nazi-Fascist totalitarian program in league with the Perón Government and against all the principles and tenets of the Inter-American System.” But this was not to be.43
The 1946 Tin Contract
Had Assistant Secretary Braden truly sought the fall of the Villarroel government, the tin contract would have been his best means to bring it about. In late 1945, Ambassador Andrade, Mauricio Hochschild, State Department officers, and representatives of the Foreign Economic Administration (FEA) assembled in Washington to negotiate the first postwar contract. Although the intrigue that permeated these negotiations gave Braden the perfect opportunity to deal a significant blow to the Villarroel government, to the surprise of many, he remained largely neutral and, at times, even supported Ambassador Andrade. The Bolivian government needed all the support it could get as it faced off with the technocrats of the FEA and found itself under assault by Hochschild as well.
The Bolivians had initially hoped that the end of the war would lead to a relaxation of the wartime controls and a three-year tin contract that started at 63½¢ per pound. Instead, the FEA opted to deploy a “revolver to the head” policy, as Hochschild called it. Arguing that, with the end of hostilities in the Pacific, Malay Straits tin would soon become available and depress the market price, the FEA’s “sharks of Wall Street” demanded a price decrease over six months from 63½ to 55¢ per pound. This phased reduction, they claimed, would allow the Bolivian economy time to adjust to the lower prices they believed would prevail in the postwar period. That said, the FEA announced that there were to be no negotiations: Villarroel and the tin barons could simply “take it or leave it.” In short, the “honeymoon [was] over.” Because the FEA had already stockpiled one hundred and twenty thousand tons of tin metal and thirty-three thousand tons of concentrates, this was no bluff, and in Ambassador Andrade’s words, “we Bolivians couldn’t eat our tin.”44
For its part, the State Department viewed the FEA position with alarm, believing it threatened to “seriously jeopardize the economic and social stability of Bolivia.” According to Ambassador Thurston, although Patiño could continue to produce tin for Great Britain profitably at FEA prices, it was “likely” that all “Aramayo production would be suspended” and Hochschild would be forced to follow suit. In effect, “our principal current production sources of supply would be terminated” if FEA’s “untenable” proposal was implemented. There was little chance, if any, that Villarroel might roll back wage increases or taxes to allow the mines to remain profitable and even less chance that he might “relinquish his power to more conservative civilian groups.”45
Assistant Secretary Braden’s diplomats argued that the FEA should not even suggest “slashing wages or depriving the workmen of the benefits of recent social legislation.” Doing so would only “increase the rift between the Government and the miners and involve us in a very messy domestic situation.” Indeed, the most likely consequence of the FEA’s approach seemed to
be nationalization of the mines. If Aramayo and Hochschild ceased or even reduced their operations, Villarroel would be compelled to seize and reopen the mines, if only to ensure the flow of foreign exchange. It did not help that elements of the RADEPA and the MNR were already ideologically disposed to do so. Any or all of these steps would at best only “delay a return of sound, democratic government.” Instead, Undersecretary of State Will Clayton suggested his own price schedule, which would keep the tin price at 60¢ per pound for a year.46
Ambassador Andrade and the tin barons naturally found the FEA proposal unthinkable and Undersecretary Clayton’s alternative only marginally less so. Outraged by the FEA’s uncompromising stand, Andrade argued that the U.S. position was “unjust,” “unwise,” and based on unrealistic assumptions. It was unjust because it punished the Bolivian producers who had dramatically increased their production during the war to support the U.S. war effort and unwise because it would almost certainly force Villarroel to nationalize the mines to sustain the national economy. The ambassador had no illusions that the government could operate the mines for more than two years before tapping out the best veins; moreover, he knew that nationalization would scare off desperately needed foreign investment and eliminate any possibility of his nation receiving foreign loans for the foreseeable future. On the other hand, he saw little reason why the price of tin should be reduced at all before Asian production facilities were in Allied hands, and he doubted FEA claims that significant quantities of Malay Straits tin would be available within three years. It made little sense to assert, as the FEA did, that it was to the benefit of Bolivians to deny them a fair price for a year to prepare them for an even lower one the next. Indeed, if his country did not receive 70¢ per pound, “Bolivia [might] have to be written off as a casualty of war.” If, however, the United States would maintain the tin price for several years, Paz Estenssoro could realize his program and Bolivia would “emerge as a diversified and largely self-sufficient economy.”47
Although Mauricio Hochschild derided this “dream” of self-sufficiency, he agreed entirely with Ambassador Andrade that U.S. policies were “unfair
and unjust” and that the Bolivian government would “exhaust and ruin” any nationalized mines. Not surprisingly, he believed that the tin price should be “at least” 80¢ per pound and “very probably” $1.00. He also claimed that he and Carlos Aramayo were already “losing money” at the current price and “had not made any money” during the war because his labor costs had, thanks to the 1943 revolution, increased from eighty-five to five hundred dollars per ton. If the United States government would not pay him what he believed his tin was worth, it should at least pressure the Villarroel government to “cut out labor agitation” and “revise the tax system.” When told that this would violate Good Neighbor nonintervention pledges, Hochschild cited Braden’s campaign against Perón, claiming that “although [the United States] talked the doctrine of nonintervention, [it] did not follow it.” He was quick to point out, however, that this was “exactly the right thing” to do. Indeed,
