1938: Bolivia

Although 124 members were elected, on March 13, to a national convention which two months later was to choose a successor to President German Busch, this Chief of the General Staff, who a year and a half ago ousted the military regime of Colonel David Toro, still served as president of the Bolivian republic at the end of the year. Colonel Toro in April attempted to foment a revolution against the Busch government in the Chaco, but failed and fled to Argentina. On July 14 the Congress passed a law amending the Constitution of 1880 so as to grant the President power to suppress Rightist newspapers. The Cabinet appointed on Aug. 12 has been described as 'predominantly socialist,' although President Busch is said to have dropped the socialistic program of his predecessor. Reports of the political situation in Bolivia are very conflicting, however, as on Nov. 25 a state of siege was proclaimed, following the suppression of a revolt attributed to Leftist agitators.

In September Argentina and Bolivia ratified a treaty establishing the boundary between them. In accordance with a recent commercial treaty between Chile and Bolivia, providing mutual facilities to increase trade between them, the Bolivian Government has decided to establish its own custom officers at Arica, as well as a branch of the Bolivian central bank. Since Chile feels that it has made Arica substantially a free port for Bolivia it was irked when the question of an outlet to the Pacific was revived at the Lima Conference by the Bolivian Foreign Minister, Eduardo Diez de Medina.

In November 1937 Argentina agreed to permit Bolivia to ship petroleum across Argentine territory free of all taxes just so long as the Bolivian oil fields remain in the possession of the Government. The properties referred to in the new commercial treaty belonged to the Standard Oil Company of New Jersey until, through court order in March 1937, the concession was terminated. An appeal is still pending before the Supreme Court of Bolivia. The 'confiscated' properties represent an investment of $17,000,000. This situation, which was the precursor of the expropriation decree in Mexico, cannot now be adjusted without involving complications with both the Argentine and the Brazilian Governments. The oil industry of Bolivia has been nationalized, with an official petroleum board, created in 1937, and a government oil enterprise modeled after Argentina's, known as Yacimientos Petrolíferos Fiscales Bolivianos.

Bolivia's economic life centers in tin, which accounts for from 70 to 75 per cent of its total exports, but mine labor shortage due to the Chaco war continued to be reflected in a reduced output, and Bolivia again in 1938 was unable to meet the export quota granted by the International Tin Committee. At the end of 1937 it had produced under half of its allotment. Because of this fact it will not be affected by the reduction in the world production quota made by the Committee in February. Low tin quotations toward the end of 1937 reduced the amount of exchange available for imports, and fluctuating tin prices have created a very uncertain exchange situation. In December 1937 an Argentine company was granted exclusive rights to smelt tin in Bolivia. This arrangement, if made effective, would remove the disadvantage of shipment of ore abroad, especially to Great Britain, for smelting and then re-exporting to consuming countries.

The budget for 1938 provided for an increase of 37 per cent over the 1937 budget, and of almost 100 per cent over that for 1936. Revenues and expenditures are balanced at 274,123,000 bolivianos. (For the Chaco settlement see PARAGUAY.)