BOLIVIA

     
"BOLIVIA: THE PRICE OF TIN"

Part I: Patiño Mines and Enterprises

 
By Norman Gall
    

January 1974

Sentinel without arms, town without spirit, people without grace, land without water, sun without warmth: Each one there-stranger or citizen-should calculate his risks beforehand. An audacious start and a cautious retreat are indispensable. Mines of legendary name - many prosperous and some now empty - climb from slope to slope the length of the cordillera, in constant struggle with the earth. Adolfo Costa du Rels, Los Andes No Creen en Díos.

The Siglo XX ("Twentieth Century") tin mine is cradled among sullen, rusted hills that rise from the altiplano - the highland desert of scrub and stone that runs the length of Bolivia - to embrace the swollen hive of penury that the great mine has become.

The road from Cancañiri down to the mine runs past winding, reddish river beds pocked with small excavations that burrow into the alluvial deposits which are, increasingly, the salvation of the dispossessed and the main source of profits for the nationalized Empress Miners Catavi. The road begins, in switchblade fashion, at abandoned mine shafts such as Dolores, Cerro Azul and Socavón Patiño, dating from the earliest bonanzas of this century, that still scar the mountain at 15,000 feet. It descends past the smaller communities of Calvary and Cancañiri, then through the mining camps themselves: steep, gullied streets threading a mass of decayed adobe warrens with corrugated metal roofs that glisten in the altiplano sun and are loaded with stones so the wind won't blow them away. It passes the old concrete movie house that is poised like a Greek temple at the edge of a precipice, overlooking the ramshackle structure of the "Sink-and-Float" preconcentrating plant next to the mountainous gray-green dumps of waste rock that bear witness to 70 years of continuous extraction. The road finally dissolves into the Plaza del Minero, the center of communal life at the mine. All the installations in sight were built before the mines were nationalized in the Bolivian Revolution of 1952, save for the union headquarters, the only permanent building on the plaza. Its three-story concrete façade is painted with a mayhem of political slogans, its walls pocked with bullet holes and some windows still broken from the army's invasions of the mines in 1965 and 1967. The sindicato building stands between the crowded, crumbling mining camps of Siglo XX and the newly prospering town of Llallagua. Farther down the mountain, beyond the cemetery and the barren pampa of the María Barsola Field, lies the administrative complex of Catavi, with the concentrating mill and the slatternly office buildings of the Empress.

The Plaza del Minero at Siglo XX is dominated by an heroic statue, commemorating the 1952 Revolution, of a bare-chested, helmeted miner raising a rifle aloft in his right hand and pressing a pneumatic drill into the ground with his left. The bold, angular lines of the miner's face and figure point to the sindicato building, which contains a movie theater, a radio station ("Voz del Minero") and a billiard parlor apart from the union offices of the sindicato. It is shelter as well for the organizations of marginal workers who mine the low-grade alluvial deposits, abandoned tunnels, and the liquid wastes from the "Sink-and-Float" plant. A recent addition to the plaza, under the same clump of eucalyptus trees as the miner's monument, is a statue of the dead communist leader, Federico of revolutionary politics, while Patiño-forbidden by his doctors to return to Bolivia - tried to run the mine from Europe by remote control through a continuing interchange of detailed reports and instructions with his agents on the scene. By the time the old man died in 1947 in his eighty-seventh year, the mine had become the scene of many uprisings and "massacres" that pushed Bolivia toward its 1952 Revolution, when the major mining groups - Patiño, Hochschild, Aramayo - were nationalized and Indian serfdom was abolished.

Since the Revolution, Siglo XX's production declined by half because of political conflicts and the rapid depletion and decapitalization of the mine. At the same time, even with the exhaustion of its ore, the congestion and human vitality of the great mine has increased dramatically. Although the price of tin has risen in recent months to unprecedented heights (around $3.00 per lb. New York), this accelerated demographic concentration on de­clining economic resources could only be accom­modated, under present organizational capacity and technology, by a gradual regression from industrial toward pre-industrial forms of production. A British geographer wrote recently that, the beds of rivers draining the mineralized area are swarming with people-men, women and children frequently working as family groups, sometimes as cooperatives ­ turning over the surface washings and bur ­ rowing into the deeper alluvium. Work begins at dawn and finishes at dusk. The mineral is handpicked and concentrated in makeshift channels cut out of the stream bed. The only direct outlay, the cost of materials, is small compared with the uncosted input of labor; the return is a proportion of the tin price current at the time of working. Thus, unlike tin mined by other means, total production costs are always below the market price. Parts I and II in this series of Reports will trace the economic transformations at Siglo XX in this century. These transformations have been extremely dynamic, embracing the creation of an integrated Escobar, who during the revolutionary period (1952-1964) held the powerful post of Control Obrero at the nationalized mine: a kind of worker ­ ombudsman with broad veto powers over management decisions. A small, muscular man with a booming voice, much - beloved for his defense of the workers, Escobar was portrayed by the sculptor in a characteristic pose, with his mouth open and his finger pointing. He died mysteriously in 1967.

The steps of the sindicato building are crowded each afternoon with boys and young men who gather round a huge rack of comic books-Spanish translations of Superman, Batman, and Donald Duck-that they rent for a penny a half-hour, while bowler-hatted Indian women sell ice cream, cotton candy, and glasses of chicha next to the miner's statue. Near the market stalls across the plaza there is a constant flow of altiplano Indians in dusty ponchos and floppy sheepskin hats who bring potatoes and firewood on clusters of llamas to sell at the miners' houses. These Indians gradually melt into the mining community - as porters in the marketplace and peons in the marginal workings ­greatly swelling the local population.

The story of the Siglo XX mine carries much of the Bolivian experience in this century, embracing one of Latin America's most profound and convul­sive social revolutions. That revolution was carried out largely by a small middle class and mining proletariat created by this backward country's sudden incorporation into the world's industrial economy around the turn of the century. What few signs of modernity that exist on the altiplano were installed by exporting enclaves such as the Siglo XX mine, which for most of the century was "the richest tin structure and most productive in the world.” “Since mining began in 1903 it has produced about 30 per cent of all Bolivia's tin and 6 per cent of the world's tin, a total in excess of one-half million tons of tin worth about $2 billion at early  1966 prices.” In the first three decades of the century this pro­vided the economic base for Latin America's first and only multinational corporation - with interests in the United States, Canada, South America, Europe, Africa, and Southeast Asia - created by Simón I. Patiño, an industrial genius of Indian ex­traction who has been compared with Rockefeller and Carnegie. Under the impact of the Great De­pression and of Bolivia's humiliating loss to Paraguay in the Chaco War (1932-1935), the mine over the next two decades also became a cauldron of revolutionary politics, while Patiño – forbidden by his doctors to return to Bolivia—tried to run the mine from Europe by remote control through a continuing interchange of detailed reports and instructions with his agents on the scene. By the time the old man died in 1947 in his eighty-seventh year, the mine had become the scene of many uprisings and “massacres” that pushed Bolivia toward its 1952 Revolution, when the major mining groups— Patiño, Hochschild, Aramayo—were nationalized and Indian serfdom was abolished.

Since the Revolution, Siglo XX’s production de­clined by half because of political conflicts and the rapid depletion and decapitalization of the mine. At the same time, even with the exhaustion of its ore, the congestion and human vitality of the great mine has increased dramatically. Although the price of tin has risen in recent months to unprecedented heights (around $3.00 per lb. New York), this accelerated demographic concentration on de­clining economic resources could only be accom­modated, under present organizational capacity and technology, by a gradual regression from industrial toward pre-industrial forms of production. A British geographer wrote recently that, the beds of rivers draining the mineralized area are swarming with people - men, women and children frequently working as family groups, sometimes as cooperatives - turning over the surface washings an burrowing into the deeper alluvium. Work begins at dawn and finishes at dusk. The mineral is handpicked and concentrated in makeshift channels cut out of the stream bed. The only direct outlay, the cost of materials, is small compared with the uncosted input of labor; the return is a proportion of the tin price current at the time of working. Thus, unlike tin mined by other means, total production costs are always below the market price.

Parts I and II in this series of Reports will trace the economic transformations at Siglo XX in this century. These transformations have been extremely dynamic, embracing the creation of an integrated industrial organization and technology from pre-industrial beginnings within the Patiño empire (Part I), and then a regression to pre-industrial systems of labor under increasing demographic pressures on a diminishing resource base (Part II). This focus must exclude some aspects of the social and political history of the mine, which I hope to cover in another Report. Because the last two Bolivian censuses were made in 1900 and 1950, there is today an extreme scarcity of meaningful demographic statistics to objectify the personal ob­servations made in my visits to the mine in 1965, 1966, 1970, and 1973. To compensate in part for this paucity of hard data, I carried out a question­naire sampling of some families at the mine in August-September 1973 that may provide at least some basis for evaluating fertility, infant mortality, literacy, migratory patterns, and income levels.

I

The mountain of Llallagua, which Simón Patiño transformed into the world's richest tin mine, is superficially a brown, barren mass with primeval potato patches scratched into its lower slopes. The gray-green mineralized portion of the mountain "is an intrusive body of quartz porphyry which represents an old volcanic vent." "The ore was formed by hot, ascending solutions circulating upward through channel ways in the igneous rock .... Some of the bonanza lodes, among the richest tin veins ever mined, are as much as three meters wide." In the early years of the mine, these bonanza veins were so rich that the ore taken from them - containing 65 per cent tin - was simply placed in sacks by Indian women called palliris and exported without going through the concentrating mill. That was at the beginning of this century.

The mountain of Llallagua bears the Quechua name for the benign spirit that brings abundant harvests of potatoes, the staple crop of the Indian peasants of the Andes. The first Spaniard said to have reached the mountain was Juan del Valle, one of the conquistadores who accompanied Ñuflo de Chávez on his epic march from Paraguay to Alto Peru (Bolivia). There is little known of Juan del Valle, except the legend that says he went to the top of the mountain and prayed for the power to dis­cover there the silver that his countrymen had found in Porco and Potosi. As part of his invocation he changed the name of the higher of the moun­tain's twin peaks from the Quechua "Intijaljata" to Espíritu Santo, but this new baptism brought him no luck. In his Llallagua: Historia de una Montaña, the Bolivian diplomat-historian Roberto Querejazu writes that Juan del Valle, abandoned the place in disillusionment and was lost forever in the darkness of time and distance. Nobody would have known of his existence or his presence in Llallagua if the region's inhabitants, over many generations, had not kept the name of Juan del Valle for the other peak, where his abandoned mine was located.

Early in the seventeenth century the Spaniards reported a population of 29,621 for the "Provincia y Corregimiento de Chayanta," in which the moun­tain was located. The population was divided into 5,759 able-bodied men ("tributarios"), 15,417 women, 7,632 children and 813 old men. This imbalanced demographic pyramid can be ex­plained by the mita, or forced Indian labor in the mines, which provoked the migratory flight of hun­dreds of thousands of highland Indians into remote and inaccessible areas. In his classic essay on "The Quechua in the Colonial World," George Kubler wrote that "the entire Colonial epoch in Perú has not incorrectly been designated as a vast religious and political organization for the exploitation of the mines." Between 1628 and 1754 the popula­tion of Chayanta was roughly halved to 15,231. According to the Bolivian historian Luis Peñaloza:  

In general, the work in the interior of the mines was uninterrupted. The standard period of continuous work was 36 hours; the shafts were lighted by candles or tallow wicks. The ore was extracted by blows with an iron bar - the use of explosives was very limited - and brought to the surface on the backs of Indian porters ("japiris"), who climbed ladders of rope or leather to the open-air patio ("cancha") of the mine. According to Padre Jose de Acosta, "each man carries 50 pounds of ore on his back in a cloth tied around his chest; they come to the surface in teams of three. The one in front has a candle tied to his thumb so they can see because, as they say, there is no light in that sky" ....Important mines in Upper and Lower Peru, as well as in Mexico, were paralyzed by flooding of the lower levels . . . . The water was extracted in leather pails that were passed from hand to hand until they reached the surface . . . . A more costly and complete way of emptying the mines of water, used only in grave and im­portant cases because of its high cost, was to dig special tunnels at an angle so the water could fall by gravity and exit at the lower levels of the mines. 

In his treatise entitled Arte de los Metales (1637), Padre Alvaro Alonso Barba, curate of the San Bernardo parish in the Villa Imperial de Potosí, reported that "next to Chayanta, in the Audiencia of Charcas, there is another tin deposit from which for some years the mineral has been extracted in abundance," adding with greater enthusiasm that the district "is full of seams of gold. It has some old tunnels, and in its Rio Grande there are nuggets within the sands." The eighteenth cen­tury Spanish travelers Jorge Juan and Antonio de Ulloa described the province as being "very famous for its gold and silver mines. The former are indeed at present discontinued, though the ancient sub­terraneous passages are still open . . . . The silver mines are still worked to great advantage; but with regard to cattle, this province feeds no more than are barely sufficient for its inhabitants." Penaloza concludes that tin was found jointly with silver in this region and was "exploited almost by obligation," being used "principally in the lining of tanks or vessels for the distillation and storage of aguardiente [a potent sugar-based brew]." 

The transition from silver to tin came late in the nineteenth century, and assured Bolivia a role in the industrial expansion of Europe and the United States. The rise of the canning industry in these countries coincided with the exhaustion of the ancient tin mines of Cornwall in England - which since Roman times had been Europe's main source of the metal. Also, the silver prosperity ended with ehaustion of the Bolivian and falling world prices.

In the 1880s Patiño himself had worked in the most famous of these silver mines, Huanchaca, which had been in the vanguard of industrialized mining in Bolivia. After Huanchaca, he worked for 15 years as a clerk in the mineral-buying and supply firm of Gérman Fricke in Oruro, then suddenly left his job at age 37 to dig for tin, with the help of some Indian peons and his wife, at a ten-acre concession called "La Salvadora," on the mountain of Llallagua. The mine was near the peak of the mountain. Patiño worked there for three years with great difficulty and little results. In March 1899 he wrote a friend: "Yesterday I had to escape from where we grind the ore because I didn't have the money to pay the workers." Nevertheless, on an afternoon in 1900, one of the peons emerged from the mineshaft to say: Don Simon, come see what we have found! It looks like pure silver. It is a very wide vein!" As Patiño disappeared into the mine, his wife Albina - who was helping the Indian women sort out pieces of ore and pulverize them in the crusher - knelt before a crucifix and prayed: "Let it not be silver, my God! Let it be tin! Tin in Bolivia was to be the metal of the Twentieth Century. Charles Geddes, former general manager of Patiño's Banco Mercantil in La Paz, explains in his biography of Patiño: 

Although he had only lived in mining camps and in small towns, not even in the capital of the republic, in a high and very backward, landlocked country, had never seen the sea or anything but very small factories, Patiño somehow had become convinced that tin was to become one of the great industrial metals of the future. Canning was then only in its infancy and the steadily‑growing demand for tin was not yet reflected in its price. But Patiño was sure that demand and price would increase, and for this reason he set his heart on being a tin-miner, not just a miner.

A photograph exists of Patiño at the age of 33, when he still was a clerk with Fricke in Oruro. In that picture he is a lean, balding young man with small, keen eyes and very tense lips. Some 20 years later, on the eve of World War I, after taking up residence in Europe, he was described by his ad­miring biographer as "a little less than average height but appeared shorter still owing to his stocky build; he walked with quick, short steps, was broad of shoulder and still muscular. His bright eyes sparkled, often mischievously, his look was darting and penetrating, and he knew how to smile." By 1913 Patiño was so important to German interests that he was decorated with the Red Eagle of Prussia and invited to dine with Kaiser Wilhelm. A few years later this half-Indian who was so acutely sensitive about his illegitimate birth would be marrying his children into the European nobility.

Paul Walle, an early chronicler of the Bolivian tin industry, wrote in 1914 that in the face of the surging demand for tinplate the ancient Cornwall mines were so depleted that they could only pro­duce 4,000 or 5,000 tons per year, while those of Saxony and Bohemia were almost completely abandoned. On the other hand, "the Bolivian lodes are of exceptional extent and richness, and their number is so great that it will be long indeed before they can be exhausted.” Between 1896 and 1902 the world price of tin doubled, and then doubled again by 1917. Between 1898 and 1912 Bolivia's tin production increased by nearly tenfold, while the value of those exports multiplied eighteen-fold. While production costs in Bolivia rose only slightly (from £75 to £90 per ton) between 1910 and the Great Crash of 1929, tin prices spiraled from £154 in 1910 to over £300 during World War I (1917-1920) and again in the late 1920s, giving Patiño an extraordinary profit margin with which to expand and diversify his empire. Llallagua by itself produced roughly 17 per cent of the world's tin supply in 1918, when the average price was a record £329 per ton.

Three ore samples taken from the rich lode discovered by Patiño's peons in 1900 were brought to the laboratory of an English company operating at the nearby mining town of Huanuni. The chemist told Patiño that the samples contained extraordinarily high-grade ore respectively of 56, 58, and 47 per cent tin. However, Patiño's little Salvadora mine was merely one of several operating on the mountain of Llallagua under the pre-industrial technology of the time. According to Geddes, the exploitation of the mine began in earnest with an increase in the number of workmen, who with hammer and pickaxe extracted the exposed minerals which continued to be crushed in the primitive mill. This was composed of an indented flat stone on which an enormous round boulder, weighing seven tons or more, was rocked to and fro by means of long poles inserted into holes in its sides to give it leverage. Small pieces of ore were slipped under the boulder when the latter was tilted up by the poles, and the whole constituted a very serviceable mineral crusher [quimbalete].

After Patio's rich strike he had to defend his mine against a plethora of counterclaims, both in the courts and in a famous gunbattle in 1901 between Patiño and his peons and an attacking band led by Armando Artigue, who held a neighboring concession on the mountain. Claim-jumping was a common practice in those days, and both large and small companies were accustomed to running shafts into their neighbors' concessions. Almost from the first, Patiño hired an engineer to run the mine while he concentrated on his lawsuits and on the rapid industrialization of the operation. By 1901 he had ordered the $1 million Miraflores concentrating mill, containing Bolivia's first diesel engines, enabling him to quadruple the amount of ore processed between 1904 and 1905, the plant's first year of operation. Patiño's voluminous corre­spondence shows an almost religious zeal for the installation of efficient management and tech­nology, as well as recurrent hectoring of his man­agers over accounting and costs.

The difficulties of creating an industrial infra­structure on the altiplano were dramatized in 1918, when Patiño bought a heavy, 600-horsepower Sulzer generator in Switzerland. After being unloaded in the Chilean port of Antofagasta, the motor was divided into five parts to be brought by railroad to the altiplano terminal of Machamarca, from which Patiño was building a spur of track to his mine at Uncía. About 30 miles beyond Machamarca the axle of the engine - nearly nine meters long and weighing eight tons - was loaded on a specially built cart drawn by several mules, with the other heavy pieces loaded on other carts. The generator was an important source of energy for the mill in Uncía and the air compressors in the interior mine.

The struggle to emerge from pre-industrial to in­dustrial forms of production would continue for many years. In 1916 the Engineering and Mining Journal published an article by two American geologists who visited the mine at the time a second concentrating mill was being built. Here they describe the coexistence of labor - and capital - intensive modes of production:

Aerial trams connect the Salvadora and Patiño tunnels with the mills. At the mouth of the tunnels cholo [Indian] women sort out some of the richest ore, called guía, which is shipped without further concentration .... In the new mill, now in process of construc­tion, the treatment [of ore] will be somewhat modified. The old mill produced about 900 tons of tin barrilla a month, while the new mill is expected to produce from 1,200 to 1,500 tons monthly. The barrilla is put in bags and transported to the terminus of the railroad by carts or by llamas. Roughly, about two-thirds is carried by llamas at a cost of $10 a ton for the distance of 18 miles. Each llama will carry about 100 lb. and will only make from 10 to 12 miles a day, as the llamas get their entire sustenance from the coarse grass along the route and so must be permitted to stop and graze at frequent intervals . . . . The old mill was making only about 65 percent recovery from three per cent tin ore, but it was hoped to mate­rially improve this in the new mill. At Huanuni the miners in 1915 were paid 75 to 85 cents a day, the boys 45 cents and the women 30 cents. The miners were compelled to furnish the oil for their lamps, at a cost of about six cents a day. These wages are about half what was paid before the European War demoralized the Bolivian tin indus­try ....Ore taken for samples was carried in rawhide bags by Indian boys to the tunnel level. These boys, some of whom were no more than 10 to 12 years of age, would carry 60 pounds of ore at a time.

In 1915 the Argentine writer Jaime Molins visited Uncía, "a municipality of 10,000 inhabitants with an irregular topography" covered by the sudden, chaotic growth of most mining towns. Just before World War I bonanza wages were paid: more than $4 daily for drillers and a general average wage of $2.20 for a 12-hour shift, several times the real value of wages at the nationalized mines a half-century later. These high wages drew an intense migration of workers, mushrooming the town with improvised agglomerations of shacks along twisted alleys on the hillsides near the mine. But by 1915 Molins could write of Uncía: "Today it is a respectable center, dotted with stores in the hands of Syrians, Austrians, Italians, Spaniards, and an occasional Frenchman. It has a subprefect, a city hall, a theater, a public market, schools, hotels and even a weekly newspaper with its own printing press." The general manager of the mine, Máximo Nava, was also president of the Municipal Council. Molins went on to describe the degree of industrialization already achieved in Patiño's operations.

Before entering the mine, we take a brief tour of the workshops, the electric power station, the railway terminal for the ore-cars and the warehouse for spare parts. At that moment a German-made Imperator electric locomotive, drawing 20 ore-cars, emerges from the mine, undulating like a scorpion .... Some recently-arrived machinery, including two large air-compressors and a Borsing water pump, await with suitable dignity their installation in the labyrinth of underground galleries.... At the time of our visit to the mines of Uncía, some 1,500 men worked in the mine and the mill, sometimes reaching 2,500 in peak periods. The workers are distributed in the galleries like bees in a honeycomb. We hear the noise of compressed - air drills, electric drills and the funereal echoes of dynamite explosions. Among the workers are barreteros, carreros [ore-car pushers], air-drill and locomotive operators, rail-layers, blacksmiths and other artisans. Outside the mine work the palliris: Indian women who select fragments of ore rich in mineral. On this mountain the palliris do not break or crush the stone as in other mines ....The Uncía mill has the most modern and productive tin-concentrating process in the country, and is even superior to many European mills. The ore enters the mill by cable-car and falls into six crushing mills after its specific gravity is registered on automatic platform scales. After the crushing and pulverizing process it is sent to the cylindrical mills and then to the classifying tables. The low-grade ore goes through a magnetic separation process that is unique to this mill. Llama teams are used to bring the tin concentrates to the end of the railway line, but in the months of November and December this service is interrupted for the lack of pasture grass.

Both the dramatic enlargement of Patiño's plant capacity at Uncía, needing more and more ore to achieve economies of scale, and the lawsuits that challenged his title to the great Salvadora lode, seemed to drive Patiño to consolidate and expand his properties, first on the mountain of Llallagua, and then elsewhere in Bolivia. In 1910 he took his first big step toward complete control of the whole Uncía-Llallagua tin district by buying the neigh­boring Compañia Minera de Uncía for £600,000 from the British geologist John B. Minchin. In 1911 he paid £450,000 for several British mines at nearby Huanuni. In 1914 he bought several flooded silver-tin mines in the Colquechaca district of Potosí. In addition to building the $5 million, 58-mile Machamarca-Uncía railway, he founded an electric utility company for his hometown, Cochabamba, and, in 1906, the Banco Mercantil, which soon became Bolivia's largest bank, with branches in the major cities and mines.

Patiño's attention was constantly called back to conflicts and rivalries on the mountain. The last of the lawsuits challenging Patiño's ownership of Salvadora was not settled until 1921. Meanwhile, a group of Chilean financiers had bought - in 1907 - the other major operation on the mountain, forming the Compañia Estañifera de Llallagua. The two companies were working lodes so close to each other that, in 1911, Llallagua workers acci­dentally blasted into one of Patiño's galleries. Patiño continued to complain of the Chilean company's "opening up entrances into my work­ings" until a detailed boundary agreement was reached in 1914 between the two firms. While Patiño's operations continued to be plagued by acute power shortages, however, the Chilean company managed to build an artificial lake and a dam on the Chayanta River, greatly increasing its electricity supply. This enabled the Chileans to double their tin production between 1916 and 1918 and to overtake Patiño as Bolivia's largest producer.

Nevertheless, by the early 1920s Patiño was said to have a greater annual income than the Bolivian government. Increasingly he devoted himself to the buying and selling end of the business, spending more and more of his time in Europe until, in 1924, his doctors forbade him to return to Bolivia because of a heart condition. Explaining Patiño's absorption with business dealings in Europe, Geddes wrote:

English, German, French and American traders were struggling to capture the European minerals market. It was indispensable for a large-scale producer to learn the intricacies of the mineral trade as it would have been ingenuous to assume that the stiff competition then existing between British and German smelters would automatically secure for him permanently the best prices. A wise seller had to be wide-awake and know all there was to know about the ramifications of the trade where a whole array of agents, assayers, industrial chemists and managers of smelters waged perpetual war with the producers about such things as: tariffs for shipping, smelting, railway freight and insurance; amounts of impurities in the minerals; losses of weight through evaporation of moisture in transit; credit facilities, and so on.

This involvement in the European mineral and money markets led to a rapid diversification of Patiño's operations. Unlike the principal nineteenth century silver magnates-Aniceto Arce, Gregorio Pacheco, and Severo Fernandez Alonso, each of whom became President of Bolivia-the tin barons tended to avoid open involvement in politics except to promote and defend their business interests, gravitating instead toward the centers of international trade and finance. The growth of the Patiño interests into an important multinational enterprise began with his first trip to Europe in 1908, when he bought half-ownership of the German smelting firm of Zinnwerke-Wilhelmsburg, which was refining nearly all his ore. The other half-ownership of the German smelter was bought by the United States National Lead Company, the world's second largest consumer of refined tin, which then managed the smelter. Thus began Patiño's long association with National Lead, which gave him much of the power he lacked in his drive to dominate the Bolivian and international tin industry. He and his family resided in Oruro from 1903 to 1912, but then took up residence in Hamburg. In those days Patiño relied heavily on Germany for machinery and financing for his new projects, but he soon began to range farther afield. At the start of World War I in 1914, Patiño shifted his base of operations to England. Diverting all his ores to the Liverpool smelter of Williams, Harvey, he began maneuvering to break the British monopoly in tin smelting. In 1916 Patiño and National Lead, acting together, told the family that owned Williams, Harvey that they would build their own smelter if they could not buy into the firm. Faced with this ultimatum from its largest supplier and its largest customer, the Pearce family sold a one-half interest to National Lead, which in turn sold one-third of its share to Patiño. By 1929 the Patiño interests had taken over whole ownership of Williams, Harvey, and had begun buying large quantities of stock in the principal Malayan tin-mining companies.

Ironically, it was these powerful international connections that enabled Patiño to make his greatest claim to being a Bolivian nationalist: the long, secret process of proxy share-buying that enabled him, in 1924, to displace the Chilean interests that controlled the neighboring Compañia Estañifera de Llallagua. Not only had Chile deprived Bolivia of her seacoast in the War of the Pacific (1879?1884), but also of the world's richest nitrate and copper deposits, which were located in those coastal deserts and mountains. Two decades after the war some of Chile's leading political and financial figures bought the Llallagua mine that was developed by Pastor Sainz, a Bolivian miner-lawyer-politician, and entered promptly into an intense rivalry with the Patiño interests. After the 1914 boundary settlement was signed between the two firms, Patiño secretly went about buying stock in the Chilean company through two intermediaries, the British import - export firm of Duncan Fox in Antofagasta and the Anglo - South American Bank of London, which quietly began accumulating shares on the Santiago stock exchange in behalf of a mysterious "English group." Again Patiño worked in close collaboration with National Lead President Edward J. Cornish, linking the Llallagua stock purchase with the total takeover of Williams, Harvey, under the economic rationale that the world's largest tin smelter would have as its ensured source of supply the world's largest mine. The moment of truth came in April 1924 when Patiño and National Lead together held two-thirds of the Chilean company's stock and Patiño announced his ownership - along with the merger of the two companies on the mountain - at the annual meeting of Llallagua shareholders in Santiago. A Bolivian at the meeting shouted: "Viva Patiño!" Patiño shouted back: "Viva Bolivia!"

By the time of the Great Depression, Patiño had laid the foundations of an extraordinary economic empire. According to Herbert Klein:

His major investments after 1920 came to be greatly diversified, not only in Far Eastern and African tin production and international smelting, but in non-tin related investments as well. Recognizing the declining nature of the high-cost Bolivian tin industry, he carefully diversified his investments into non-tin mining, especially in Canada, and in general business investments in the United States and Europe. Thus by the time of his death in 1947 Patiño had built up a well-integrated fortune which has every appearance of surviving for a long time ....Even with the nationalization of his Bolivian tin properties in 1952, little real difficulty was created for the Patiño family. Forced to give up these increasingly marginal and unproductive resources, they were still able to force an early repayment plan upon the Bolivian government because of U.S. pressure and their control over the crucial Williams, Harvey smelter, the sole Bolivian tin concentrate smelter still operating in the world.

II

The Great Depression had a catastrophic effect on the price of tin. From a high of 71 cents per pound in November 1926 the New York price fell to 19 cents in April 1932. Bolivia's production of tin-in-concentrates fell from a record 46,338 tons in 1929 to 14,725 tons in 1933.48 According to a United States Congressional report, the high tin prices of 1926?27 caused a boom in the development of tin mines that led to an overproduction of tin as early as 1928.

Stocks began to rise and prices to fall. During the summer of 1928 the Tin Producers' Association was formed to regulate the output of tin mines, but the general industrial depression caused a decline in consumption that nullified all benefits from controlled production. In 1930 a move was started to effect a legally enforceable curtailment program.

Writing on the tin crisis in the Great Depression, Elizabeth S. May observed that the inspiration for these huge investments in tin production capacity “was the remarkably high price of tin in 1926, and the general belief that at the current rate of exploitation, the existing areas would supply the world demand for no more than 10 years. Fabulous was the amount of capital poured into the tin-mining industry in those years. Investors, evidently, had never heard of such a thing as over-capitalization of a productive area ....The falling off of demand in the United States in 1927 [consuming nearly half the world's tin] soon brought to an end the upward movement of price and by the end of the year those who said there would soon be a tin famine saw stocks accumulating.”

This extraordinary flow of investment into tin production capacity in the 1920s produced some major technological advances at Siglo XX, many of them realized by the new American manager, John C. Pickering, hired by Patiño in 1926 at $50,000 a year. By the end of 1928, the mine had roughly 87 miles of tunnels with rails for ore-cars, 43 lodes with 295 branches under exploitation and 1,098 blocks of ore identified and cubed by geologists. Despite record levels of production, reserves of fine tin increased during the late 1920s by about 15 per cent annually. The transport of ore by llamas and carts terminated with the completion of the Uncía-Machamarca railroad in 1921. The ore-treating capacity of the Victoria concentrating mill at Catavi had been expanded by half to replace the old Miraflores mill near Patiño's first workings on the other side of the mountain. To meet the chronic power shortage on the altiplano, the mine's two artificial lakes were greatly expanded to raise annual hydroelectric generating capacity to 16 million kWh. Nevertheless, as a 1928 medical report on silicosis showed, working conditions in the mines remained primitive:

The work consists of blasting rock with dynamite, or with gunpowder if the material is soft. These explosions produce great caverns of rock, earth and metallic material that is carried on the backs of peons to the main galleries, where it is loaded on ore-cars. The branch galleries are irregular, narrow and very low, with almost no ventilation, so that only small workers, mainly boys, can make their way through the tortuous caves that cut through the mineralized rock. All these galleries connect more or less directly with a central shaft that serves as a ventilation chimney. Besides this central shaft, there are other ducts that reach the outside and ventilate the deeper galleries. In some mines there are machines that pump in air through hoses. They are used mainly after explosions to reduce the smoke and dust. Lighting is by electricity only in the main galleries, the rest being illuminated by primitive oil lamps.

Two kinds of workers labor in the mines: temporaries and professionals. The first generally are altiplano peasants who, during the lulls in the farming calendar work for a few months in the mines, while the professional miners see the job as lifetime and even hereditary. The sons of miners begin at an early age, years according to labor legislation, as aspiris [porters] who carry the ore on their backs through those strange underground pathways from the dynamite blasts to the main galleries. As they grow up they are promoted to the job of miner, that is if an ahiza [cave?in] had not ended their young existences ....In such disastrous hygienic conditions - deficiently nourished, intoxicated by alcohol and coca, living eight hours daily inside the mine in an atmosphere saturated with metallic dust and toxic gases, descending to depths of more than 1,500 feet at temperatures of 85F degrees, only to rise suddenly to glacial temperatures at the surface, living in miserable huts in an atmosphere almost as unhealthy as the mine - it is easy to see that the miners' respiratory and circulatory systems cannot withstand such adverse conditions for much time.

In the mid-1920s the managers of Siglo XX began to look toward the time when the mine would have to produce much larger quantities of ore of lower grade. In his history of the mountain, Querejazu writes that "by 1922 the wealth of the famous Salvadora lode discovered by Patiño in 1900 had been exhausted between the peak and the level 411 meters below, but it had generated the economic base needed for the expansion and mechanization of the whole mine." In 1927 the intensive geological probing within the mine was rewarded with the discovery of the rich Contact lode, containing 160,000 tons of ore - bearing 7.7 per cent tin. However, the company continued the systematic inventory of the tin content of old dumps and the rehabilitation of abandoned tunnels that it had begun a few years before to begin exploiting ore-bearing material that was discarded during the bonanza at the beginning of the century, when the ore grade mined averaged between 12 and 15 per cent.

Much of this work of industrialization was stopped by the Great Depression, which by 1932 had reduced the value of Bolivia's tin exports and tax receipts by four-fifths below their 1929 level. Bolivia's tin industry was especially vulnerable to price reductions because of its high production costs when forced to compete with the more accessible alluvial deposits of Southeast Asia. As a United Nations report explained a generation later:

The costs of tin extraction in Bolivia are higher than in any other producing region. The Bolivian deposits are found in narrow underground veins, and the ore is a complex mixture of oxides and sulfides that is difficult and costly to concentrate and smelt. For this reason, Bolivian concentrates are of a lower grade than those from alluvial deposits and their price is correspondingly lower .... Other factors tending to increase costs are transportation of the concentrates from the altiplano to the coast, the relative labor-intensity of underground operations and the pronounced decline of the ore-grade mined. Underground vein deposits also need large investments in fixed installations and in maintenance. They also require large-scale operations for economic results, making it hard to vary production levels for short periods.

In his 1930 annual report to the stockholders, Pickering wrote that the mine, “because of its magnitude, is of paramount importance to Bolivia. Perhaps a sixth of the revenue of the Republic comes directly or indirectly from the Corporation and, furthermore, between 20,000 and 30,000 people depend on the Corporation for a livelihood. Consequently the Bolivian government requires to be consulted before measures calculated to adequately reduce operating costs may be given effect.... Curtailment of production and reduction in costs was brought about by operating at full capacity during part time only-eventually four days a week.... Unfortunately, men at the mine-influenced by a radical element skilled in the use of communistic catch phrases-misinterpreted the motives of the Corporation and engaged in serious riots in the month of September. Troops were subsequently sent to the district and order reestablished.”

During 1930 the payroll was cut by one-third from the 1929 level of 6,688, and by 1933 the work force at the mine had declined to 1,229. During the second half of 1932, the Catavi concentrating mill operated only seven days a month. Pickering reported that, to reduce costs, not only were operations drastically curtailed, but management reverted to cheaper, pre-industrial forms of labor. "About one-half the mine is completely shut down," he wrote, "the remainder being worked one shift daily, five days per week. Hand drilling, which is cheaper, has where possible replaced air drills - a maneuver not feasible in ordinary times since the necessary number of workmen would not be available. To eliminate pumping charges all workings below the Siglo XX haulage level have been allowed to flood; but precautions were taken to permit their being reclaimed when conditions warranted." The company also leased old dumps and alluvial deposits for primitive workings by unemployed miners who sold back to the company about 150 tons of tin per month, or one-fourth of its total production.

To prevent his Bolivian operations from being closed down entirely by the Depression, Patiño intensified in Europe the efforts he began in the 1920s to buy into the principal Malayan mines and smelters and to arrange for industry-wide production controls. Geddes explains that Patiño's interest in the Malayan companies was "to get to know exactly why those companies were able to yield much larger returns on capital than was possible in Bolivia; to secure details of their taxes and relations with government; . . . but, above all, to try to influence those companies to cooperate concerning production and exports." The managers of the Malayan companies began sending out circulars to stockholders urging them to pass resolutions restricting foreign ownership and control, while The Times of Malaya observed in 1933:

....Mr. Patiño's figures are correct, but what was and is Bolivia's situation as tin producer compared with Malaya? Some very well-informed people believe that without the so-called international tin control project, Bolivia's mining industry would have collapsed and therefore Malaya's chief rival would have suspended production. In other words, we would have obtained an automatic restriction through this suspension of the world's second largest tin producer.... We would add that whilst the mines belonging to the Chinese in Malaya could have continued to produce tin at this very low price [£109 per ton], we doubt very much if Bolivia could have done the same.

An intergovernmental agreement was reached that gave each producing country a quota in 1933 of one-third its 1929 production. By the time world tin prices began to rebound in late 1933, however, Siglo XX found itself with an acute labor shortage. More than 1,600 workers had entered the Bolivian army for the Chaco War with Paraguay in a semi-desert region of the southeast. As a result, Pickering wrote, "experienced drillers are very difficult to obtain and we are forced to accept, and train to that end, such labor as is available. This situation has an obviously adverse effect on the cost of operating the mine." Because of this labor shortage, the first women workers entered the mine in May 1935, and by September 1936 there were 200 women working underground mainly as ore-car pushers. Working conditions in the interior mine were described in a 1937 article by the American mill superintendent and chief geologist, who wrote that "almost all work is on a contract basis. Standard wages are guaranteed, and any bonus is divided among the men participating. Prices are based on the hardness of the rock....Powder is furnished by the company and charged against the contract. Each miner does his own blasting ....Bolivian workmen do not adapt themselves readily to working with mechanical tools."

Because of the Bolivian government's restriction on profit remittances abroad during the Chaco War with Paraguay (1932-35), mine production was curtailed and development work on new shafts and tunnels intensified. To further reduce costs, the company returned to old workings to extract ore. In his 1938 report to the stockholders, Patiño wrote that, “for the last two years, due to the change in the exploitation system, large tonnages have been used from the fills and low grade ores which were previously considered without any commercial value and, therefore, excluded from the reserves. The importance of this fact may be appreciated when considering that ... per cent of the 1938 production came from this new source .... treatment of said ores will considerably increase the life of the mine. It is considered that under the new system of exploiting low grade ores and old fills not included in the official reserves, an appreciable tonnage containing approximately 2.5 per cent tin may be obtained.”

Although the work force at the mine rose to 5,500 in 1938 and 7,700 in 1940, management continued to complain of a labor shortage because of the need to mine ever-greater quantities of ore to compensate for the declining tin content of the veins. In the mid-1930s, the Chaco War recruits were replaced by "Indians without experience, who in the best of cases agreed only to work for a few months" and by Peruvians and Chileans whose presence in large numbers in the mining camps led to a series of strikes and deportation of the "agitators." According to Roberto Querejazu, the system of bringing [Indian] workers into the mines by recruitment proved costly and ineffective. The company had its own enganchadores [recruiters], as did other mining companies, but it had to spend large sums to pay for transport, food and lodging for the recruits to bring them from their places of origin to Llallagua. Normally, they only accepted contracts for 90 days, using the system for tourism in the mining districts at the companies' expense. In 1938, some 6,800 new workers were recruited by Patiño Mines, but of these only 1,900 remained with the company more than three months for work in the interior-mine.

The rapid increase in the work force since the mid-1930s led to serious congestion in the mining camps, which had only 3,740 housing units - each with one room and an outdoor kitchen - for more than 7,000 workers and their families. Until new housing could be built, two families had to share these tiny dwellings, generating quarrels between husbands and wives and between families and, generally, a high level of tension in the camps. Querejazu notes that, in the voluminous Patiño archives in Paris chronicling a half-century of the mine's operations, "there was not a single document analyzing the political and social situation, even though the growing agitation among the workers and repeated errors of government made the future of the mining industry and the nation's economy increasingly insecure."

The final decade before nationalization of the mines in the 1952 Revolution was one of social convulsions and of desperate efforts by the company to compensate for the declining quality of ore. The pouring of peasant migrants into the mines led to a series of strikes, uprisings and "massacres" while Siglo XX's miners became, under Trotskyite influence, the largest and most militant unit of the Federacion Sindical de Trabajadores Mineros de Bolivia (FSTMB), the national union founded in 1944. These miners' revolts hastened the destruction of the Bolivian army in the streets of Oruro and La Paz in April 1952 as the coup de grace of a revolutionary uprising begun by students and factory workers and joined by regular units of the National Police.

At the same time, between 1938 and 1952, the average ore grade taken from the mine declined from 2.45 to 1.11 per cent tin. No major ore body had been found inside the mountain since the discovery of the Contact lode in 1927. In his annual report, the mine manager predicted that the mine might have to be closed by 1955 if new ways were not found for large-scale mining and treatment of low-grade ores. The company's response was two technological innovations: (1) the gradual gutting of what was left of the interior-mine by "blockcaving" methods of blasting low-grade masses of mineralized rock, permitting the extraction of much larger volumes of material and requiring much less manpower than conventional vein mining; (2) building a "Sink-and-Float" preconcentrating plant, designed to raise the tin content of ore entering the mill by eliminating large quantities of sterile material before hand. Thanks partly to these new methods, the company managed to produce an average of 10,500 tons annually during the 1947-52 period, a level never again reached after the Revolution.

On October 31, 1952, MNR President Victor Paz Estenssoro flew to the Maria Barzola Field on the barren pampa between the Catavi mill and the mining camps of Siglo XX where a decade before army troops had killed scores of people when they fired on a mass of advancing demonstrators. There he decreed the nationalization of the mines before a cheering assembly of miners, peasants and politicians, amid speeches, folk dances, and the brassy music of the altiplano. Neither the speeches nor the grandiloquent nationalization decree mentioned the fact that they were nationalizing a dying mine.


   

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