3. The Invisible Sources of Power

As Lungs Need Air, So the U.S. Economy Needs Latin American Minerals

In June 1969, when the astronauts had put the first human footprints on the moon, the father of that achievement, Werner von Braun, announced to the press a U.S. plan for a remote space station with functions that were less remote: he heralded an observation platform from which we will be able to examine all the wealth of the earth, including unknown petroleum, copper, and zinc deposits.

Petroleum continues to be our world's chief fuel, and the United States imports one-seventh of the petroleum it consumes. Bullets are needed to kill Vietnamese, and bullets need copper: the United States buys abroad one-fifth of the copper it uses. Shortages of zinc cause increasing anxiety: over half comes from abroad. Planes cannot be built without aluminum, and aluminum cannot be produced without bauxite: the United States has almost no bauxite. Its great steel centers -- Pittsburgh, Cleveland, and Detroit -- do not get enough iron from the Minnesota deposits, which are on the way to exhaustion, and there is no manganese within the United States: one-third of its iron and all of its manganese are imported. Nor has it any nickel or chrome of its own to produce jet engines. Tungsten is needed to make special steels and one-fourth of that is imported.

This growing dependence on foreign supplies produces the growing identification of the interests of U.S. capitalists operating in [150] Latin America with U.S. national security. The internal stability of the world's greatest power is closely linked with its investments south of the Rio Grande. About half of those investments are in the extraction of petroleum and minerals, indispensable for the U.S. economy in peace and war. In 1959, the chairman of the Chamber of Commerce International Department said: "Historically, one of the United States' chief reasons for investing abroad has been to develop natural resources, particularly minerals and more especially petroleum. It is quite obvious that incentives for this type of investment can only grow. Our needs for raw materials are continually increasing as the population expands and living standards rise. At the same time our domestic resources are depleted." : Government, universities, and big corporations invest astronomic amounts in scientific laboratories, which make new discoveries and inventions at a dizzy pace, but the new technology still has not found a substitute for the basic materials nature alone provides. At the same time, the materials necessary to meet the challenge of its industrial growth become increasingly scarce in the United States' own subsoil.

By-Products of the Subsoil: Coups d'Etat, Revolutions, Spy Dramas, etc.

The wealth of iron beneath Brazil's Paraopeba valley overthrew two presidents -- Janio Quadros and Joao Goulart -- before Marshal Castelo Branco, who made himself dictator in 1964, graciously handed it over to the Hanna Mining Company. An earlier friend of the U.S. ambassador, President Eurico Dutra (1946-1951), had handed Bethlehem Steel the forty million tons of manganese in the state of Amapa -- one of the world's biggest deposits -- for 4 percent of the income from exporting it. Since then Bethlehem has been moving the mountains to the United States so enthusiastically that in fifteen years' time Brazil may have no manganese for its own steel industry. Furthermore, thanks to the generosity of the Brazilian government, $88 of each $100 Bethlehem invests in mineral extraction are tax exempt, in the name of "regional development." As we can see, the experience of the lost gold of Minas Gerais -- "white gold, black gold, rotten gold," as the poet Manuel Bandeira wrote -- has [151] gone for nothing: Brazil continues the gratuitous self-plunder of its own natural sources of development. [The Mexican government, on the other hand, saw in time that the country, one of the chief exporters of sulphur, was being emptied of it. Texas Gulf Sulphur and Pan-American Sulphur had insisted that the reserves still in their concessions were six times greater than they actually were. The government decided in 1965 to limit foreign sales.] In Bolivia, the Matilde mine contains lead, silver, and abundant zinc twelve times more pure than that in U.S. mines; between massacres of miners, dictator Bene Bar-rientos, who seized power in 1964, handed it over to Phillips' Industries, a Dutch conglomerate. The firm was authorized to remove the crude zinc for processing in its refineries abroad, paying the state no less than 1.5 percent of the sale value. In Peru in 1968, page 11 of the agreement which President Fernando Belaunde Terry had signed with a Standard Oil affiliate was mysteriously lost; General Juan Velasco Alvarado overthrew Belaunde, took the reins, and nationalized the firm's wells and refinery. In Venezuela, the largest U.S. military mission in Latin America sits on Standard and Gulf's great petroleum lake. Argentina's frequent coups d'etat erupt before or after each offer of oil concessions. Copper was a far from minor factor in the Pentagon's disproportionate military aid to Chile before the electoral victory of Salvador Allende's left coalition; U.S. copper reserves had fallen by more than 60 percent between 1965 and 1969. In 1964, Che Guevara showed me, in his office in Havana, that Batista's Cuba was not merely sugar: the Imperium's blind fury against the revolution was better explained, he thought, by Cuba's big deposits of nickel and manganese. The United States' nickel reserves subsequently fell by two-thirds when Nicaro Nickel was nationalized and President Johnson threatened an embargo on French metal exports if the French bought nickel from Cuba.

Minerals had much to do with the fall of Cheddi Jagan's socialist government, which at the end of 1964 had again won a majority of votes in what was then British Guiana. The country now called Guyana is the world's fourth producer of bauxite and Latin America's third producer of manganese. The CIA played a decisive role in Jagan's defeat. Arnold Zander, leader of the strike that served as a provocation and pretext to deny electoral victory to Jagan, afterward [152] admitted publicly that his union had dollars rained upon it from one of the CIA foundations. The new regime -- very Western and very Christian -- guaranteed the Aluminum Company of America (Alcoa) against any danger to its interests in Guyana: it could continue tranquilly removing the bauxite and selling it to itself at the same price as in 1938, although the price of aluminum had since soared. [Arthur Davis, long-time chairman of Alcoa, died in 1962 leaving $300 million to charitable foundations, with the express condition that the money not be spent outside the United States. Not even through this channel could Guyana recover at least some of its stolen wealth.] The danger was indeed past. Arkansas bauxite costs twice as much as Guyana bauxite. The United States has very little bauxite on its own territory, but using cheap imported raw material it produces almost half of the world's aluminum.

The United States depends on foreign sources for most of the minerals it needs to maintain its ability to wage war. The jet engine, the gas turbine, and nuclear reactors have a great influence over the demand for materials only obtainable abroad, and there is a clear link between the imperative need for strategic minerals, indispensable for the maintenance of U.S. military-atomic power, and the massive purchase of land -- usually by fraudulent methods -- in Brazil's Amazonia. During the 1960s many U.S. firms, represented by professional adventurers and contrabandists, descended in a hectic "rush" upon these enormous forests, which under an agreement signed in 1964 had already been flown over and photographed by the U.S. airforce. Scintillometers to detect deposits of radioactive minerals, electromagnetic devices for X-ray photography of subsoils rich in nonfer-rous minerals, and magnetometers to detect and measure the iron were all used. With the aid of a U.S. government geological survey, information and photos concerning the extension and depth of Amazonia's hidden wealth were put in the hands of interested private concerns. Gold, silver, diamonds, gypsum, hematite, magnetite, tan-talite, titanium, thorium, bauxite, zinc, chrome, and mercury were detected. Photographing everything from the virgin forest of Mato Grosso to the southern Goias plains, the intrepid lensmen (as ecstatically reported in the final Latin American edition of Time in 1967) [153] captured God's-eye views showing lightning flashes of half a dozen distant storms on the same exposure as brilliant sunshine. The government had offered tax exemptions and other seductions to colonizers of these wild, magical lands. Before 1967, according to Time, foreign capitalists had bought, at $.07 an acre, a tract larger than Connecticut, Rhode Island, Delaware, Massachusetts, and New Hampshire put together. "We must," said the director of the government's Amazonian development agency, "keep the doors wide open to foreign investment, for we need more than we can get." To justify the U.S. airforce's aerophoto excursions, the government had previously declared it lacked the resources for the job. Again par for the course in Latin America: its resources are always surrendered to imperialism in the name of its lack of resources.

The Brazilian Congress managed to conduct an investigation which brought forth a voluminous report.2 In this were listed cases of sale or usurpation of twenty million-odd hectares of land, forming so odd a shape that (said the investigating commission) "they constitute a cordon to isolate Amazonia from the rest of Brazil." The "clandestine exploitation of highly valuable minerals" appears in the report as one of the United States chief motives for opening a "new frontier" in Brazil. Army testimony stresses "the interest of the U.S. government • in maintaining under its control a vast tract of land for later use, whether for exploitation of minerals -- especially radioactive ones -- or as a base for organized colonization." Says the National Security Council: "A suspicious factor is that the areas occupied or being occupied by foreign elements are the same areas where sterilization campaigns for Brazilian women are carried on by foreigners." In fact, according to the newspaper Correio da Manhd, "more than twenty foreign religious missions, mainly of the U.S. Protestant church, are occupying Amazonia, functioning in places that are richest in radioactive minerals, gold, and diamonds. . . . They make extensive use of sterilization, using the intrauterine device, and teach English to the catechized Indians. . . . Their areas are surrounded by armed elements and no one can enter them."³ Note that Amazonia is the largest of all the habitable deserts on our planet. Birth control has been introduced into this great empty space to avoid [154] demographic competition by the very few Brazilians who live and reproduce in remote corners of the immense forests and plains.

General Riograndino Kruel told the congressional investigating commission that "contraband in materials containing thorium and uranium amounts to an astronomical one million tons." Shortly before, in 1966, Kruel (then federal police chief) had denounced a U.S. consul's "insolent and systematic interference" in the open trial of four U.S. citizens accused of smuggling Brazilian atomic minerals. To the general's mind the fact that forty tons of radioactive minerals had been found in their possession was enough to convict them. Soon afterward three of the contrabandists mysteriously fled the country.

The smuggling was no new phenomenon, although it had greatly increased. Through clandestine leakage of rough diamonds alone, Brazil has for some years been losing more than $100 million a year. But the need to smuggle is only relative: legal concessions deprive Brazil, without any inconvenience, of most of its fabulous natural wealth. To give but one example -- just a new bead on a long string -- the world's largest niobium deposit, in Araxa, belongs to an affiliate of the Niobium Corporation of New York. Niobium is alloyed with various other metals which, because of their resistance to high temperatures, are used in constructing nuclear reactors, rockets, space ships, satellites, or simple jet planes. Along with the niobium, the concern incidentally extracts substantial quantities of tantalum, thorium, uranium, pyrochlore, and rare mineral-rich soils.

A German Chemist Defeats the Winners of the War of the Pacific

The story of the rise and fall of nitrates is a good illustration of Latin America's illusory fortunes in the world market: how transient the blissful breezes have always been, how crushing the catastrophes.

In the middle of the last century Malthus' dark prophecies hovered over the Old World. With Europe's population climbing steeply, it was urgently necessary to revive exhausted soil so that food production could grow in the same proportion. The value of guano as fertilizer was demonstrated in British laboratories, and after 1840 it began to be exported from Peru on a large scale. Since time [155] immemorial pelicans and seagulls, feeding on the prodigious shoals of fish in the coastal currents, had been accumulating mountains of excrement rich in nitrogen, ammonia, phosphates, and alkaline salts: on these rainless shores the guano had remained in a pure state. [The guano producers, wrote Robert Cushman Murphy long after the boom, were the world's most valuable birds in their dollar yield for each digestive process: they surpassed Shakespeare's nightingale that sang on Juliet's balcony, the dove that flew from Noah's Ark, and, of course, the sad swallows of Gustavo Adolfo Becquer.⁴] Soon after guano was launched in the international market, agricultural chemistry discovered even greater nutritive virtues in nitrate, and by 1850 it was being used intensively to fertilize European fields. Old World wheat-growing lands, impoverished by erosion, hungrily absorbed the cargoes of sodium nitrate shipped from Tarapaca (then in Peru) and later from Antofagasta (then in Bolivia).5 Thanks to the sodium nitrate and the guano lying on Pacific coasts, almost within reach of the ships that came to fetch them, the specter of hunger departed from Europe.

The uncommonly arrogant Lima oligarchy continued enriching itself and amassing symbols of its power in the palaces and Carrara marble mausoleums which sprouted amid sandy deserts. Once it had been Potosi's silver that nourished the great families of the capital city; now they lived from bird-droppings and the shiny white clots in the nitrate fields -- more vulgar means to the same elegant ends. Peru thought it was independent, but Britain had taken Spain's place. The country felt rich, according to Jose Carlos Mariategui, and the state carelessly used up its credit, living prodigally and mortgaging its future to British high finance. In 1868, the state's expenditures and debts far exceeded the value of its sales abroad. The guano deposits served as guarantee for British loans, and Europe juggled prices. The plunder of the exporters created havoc; what nature had accumulated over millennia on the islands was squandered in a few years. Meanwhile, out on the nitrate fields the workers survived in hovels hardly higher than a man, made of stones, nitrate, rubble, and mud.

The exploitation of saltpeter rapidly spread into Antofagasta, although the business was not Bolivian but Peruvian and, more than Peruvian, Chilean. When the Bolivian government proposed to tax [156] those nitrate fields on its territory, the Chilean army invaded the province, never to leave. Until then the desert had served as a damper on latent conflicts between Chile, Peru, and Bolivia, but now nitrates brought them to the boil. The War of the Pacific broke out in 1879 and lasted till 1883. Chile's armed forces, having occupied the Peruvian nitrate ports of Patillos, Iquique, Pisagua, and Junin in 1879, finally entered Lima as conquerors and the fortress of Callao surrendered the next day. The defeat brought mutilation and bloodletting to Peru. The national economy lost its two chief resources, productive forces were paralyzed, the currency collapsed, and foreign credit was cut off. [* Peru lost the nitrate province of Tarapaca and some important guano islands, but retained guano deposits on the northern coast. Guano remained the chief fertilizer for Peruvian agriculture until the fishmeal boom wiped out the pelicans and seagulls after 1960. The fishing concerns, mostly from the United States, quickly destroyed the anchovy shoals near the coast to feed U.S. and European pigs and poultry with Peruvian fishmeal, and the guano-producing birds took off after the fishing boats, ever further out to sea. Without the strength to fly back, they fell in the ocean. Others stayed put, so that in 1962 and 1963 one could see flocks of pelicans hunting for food along Lima's main avenue; when they could no longer take wing, they died on the streets.] But, as Mariategui notes, the collapse failed to wipe out the past: the colonial economic structure was untouched even though its sources of sustenance had been removed. As for Bolivia, it did not realize what the war had cost it: the most important copper mine today, Chuquicamata, lies in the province it lost to Chile. And the victors?

Nitrate and iodine accounted for 5 percent of Chile's income in 1880; ten years later, more than half came from the export of nitrates from the conquered territories. In the same period, British investments in Chile more than tripled: the nitrate region became a British factory. The English took over nitrates at bargain rates. The Peruvian government had expropriated the nitrate fields in 1875, paying for them in bonds; five years afterward, the war had reduced these documents to a tenth their former value. Such daring adventurers as John Thomas North and his partner Robert Harvey turned this to good account. While Chileans, Peruvians, and Bolivians exchanged bullets on the field of battle, the English bought up the bonds, thanks to credits graciously afforded them by the Bank of Valparaiso and other [157] Chilean banks. The soldiers were fighting for them without knowing it. The Chilean government promptly rewarded the sacrifices of North, Harvey, Inglis, James, Bush, Robertson, and other industrious businessmen: in 1881 -- by which time half the bonds were in the hands of Britain's speculating wizards -- it ordered the return of the nitrate fields to their "legitimate owners." Not one penny had left England to finance this masterpiece of looting.

In the early 1890s Chile was sending three-quarters of its exports to Britain and getting almost half of its imports from that country: its commercial dependence at the time was even greater than India's. The war had given Chile a world monopoly on natural nitrates, but the nitrate king was John Thomas North. One of his enterprises, the Liverpool Nitrate Company, was paying 40 percent in dividends. North had landed at Valparaiso in 1866 with only £10 in the pocket of his dusty old suit; thirty years later princes and dukes, top politicians and great industrialists, sat at table in his London mansion. He had appointed himself "Colonel" and, as befitted a gentleman of his standing, had joined the Conservative Party and the Kent Masonic Lodge. Lord Dorchester, Lord Randolph Churchill, and the Marquis of Stackpole graced his extravagant parties, where North danced in Henry VIII costume. Meanwhile, in his remote nitrate kingdom Chileans" put in sixteen-hour workdays without even Sundays off, and were paid in script that lost about half its value at the company stores.

Between 1886 and 1890, the Chilean state under President Jose Manuel Balmaceda undertook the most ambitious development plan in its history. Balmaceda promoted some industries, carried out important public works, modernized education, took measures to break the British'railroad monopoly in Tarapaca, and secured from Germany the only non-British loan Chile received in the whole of the past century. He announced in 1888 that the nitrate areas must be nationalized through the formation of Chilean enterprises, and refused to sell state-owned nitrate fields to the British. Three years later civil war broke out. North and his colleagues generously financed the rebels, and British warships blockaded the Chilean coast while the London press fulminated against Balmaceda, a "butcher" [158] and "dictator of the worst stripe. [The Congress headed the opposition to the president -- the weakness of many of its members for pounds sterling was notorious. The bribery of Chileans was "a custom of the country," according to the English, and North's associate Harvey described it thus at the trial of a lawsuit brought against him and other Nitrate Railways Company directors in 1897 by some small shareholders. Explaining a £100,000 expenditure on bribes, Harvey said: "The public administration in Chile, as you know, is very corrupt. ... I don't say that one has to bribe judges, but I think many members of the Senate who were short of funds got some part of that money in exchange for their votes, and that it served to prevent the government from flatly refusing to listen to our protests and claims . . ."⁶] Balmaceda was defeated and killed himself. The British ambassador informed the Foreign Office: "The British community makes no secret of its satisfaction over the fall of Balmaceda, whose victory, it is thought, would have implied serious harm to British commercial interests." State investments in roads, railways, colonization of new land, education, and public works promptly slumped as British enterprises extended their dominions.

On the eve of World War I, two-thirds of Chile's national income came from nitrate exports, but it was a prosperity which, far from developing and diversifying, only heightened the country's structural deformations. Chile functioned as an appendage of the British economy: the biggest supplier of fertilizer to the European market had no right to its own life. And then a German chemist, sitting in his laboratory, defeated the generals who had won the day on the battlefield. Perfection of the Haber process, which produces nitrates by fixing nitrogen from the air, decisively displaced Chilean nitrate and sent Chile's economy into a tailspin.

In the thirsty desert of Tamarugal, where the land dazzles one's eyes with its brilliance, I have stood beside the ruins of Tarapaca. During the boom there were one hundred and twenty nitrate fields here; now only two remain in operation. Since the pampa is without moisture or moths, it was not only possible to sell the machinery as scrap, but also Oregon pine boards from the best houses, zinc sheets, and even intact nails, nuts, and bolts. Workers specializing in taking towns apart appeared on the scene: they were the only ones who could get a job in these razed and abandoned immensities. I saw the [159] debris and the empty holes, the ghost towns, the dead tracks of the nitrate railway, the silent telegraph wires, the skeletons of nitrate fields mangled by the bombardment of years, the cemetery crosses buffeted at night by the cold wind, the whitish hills of slag piled up beside the excavations. "Here money flowed and everyone thought it would never stop," I was told by the surviving residents. They idealize the past as a paradise; even Sundays -- which in 1889 did not exist for the workers, and were won later by determined strike action -- are remembered with nostalgia. "Each Sunday on the nitrate pampa," a very old oldster said, "was a national fiesta for us, a new Independence Day every week." Iquique, the biggest nitrate port -- "a first-class port," according to its official citation -- was the scene of more than one massacre of workers, but its municipal theater in the Belle Epoque style once drew Europe's best opera stars before they went to Santiago, the capital.

Copper Teeth in Chile's Flesh

Copper soon replaced nitrates as the pillar of Chile's economy, while U.S. predominance took the place of British. On the eve of the 1929 crisis, U.S. investments in Chile exceeded $400 million, almost all made in the exploitation and transport of copper. Anaconda and Kennecott, two concerns with close links as parts of a single world consortium, remained masters of the best copper deposits up until the Unidad Popular victory of 1970. In half a century they bled Chile of $4 billion, sent to their home offices under various headings; yet by their own inflated figures they invested no more than $800 million, almost all in profits taken from the country. [These firms process Chilean copper in their own distant plants. Anaconda, American Brass, Anaconda Wire & Cable, and Kennecott Wire & Cable are among the world's chief manufacturers of bronze and wire.] The hemorrhage kept growing as production grew, exceeding $100 million a year in recent times. The masters of copper were masters of Chile. On December 21, 1970, President Salvador Allende spoke to an excited multitude from the government palace balcony. He announced that he had just signed a constitutional reform project enabling the mines to be [160] nationalized. In 1969, he said, Anaconda had garnered $79 million in profits from Chile -- the equivalent of 80 percent of its global profits, although its investment in Chile was less than one-sixth its total investments abroad. The "bacteriological warfare" of the Right -- a planned propaganda campaign of terror to avoid nationalization of copper and other structural reforms proposed by the Left -- had been as intense as in previous elections. The newspapers had pictured heavy Soviet tanks rolling before La Moneda, the presidential palace; bearded guerrilleros dragging innocent youths off to death appeared on Santiago walls; every house waited for the bell to ring . . . "Do you have four children? Two will go to the Soviet Union and two to Cuba," a senora explained. None of this worked; copper is "putting on poncho and spurs" and becoming Chilean.

The United States, its feet caught in the tangle of Southeast Asian wars, has not concealed its official displeasure at the trend in the southern Andes. But Chile is not within reach of a sudden Marine expedition, and Allende, after all, is president by every precept of representative democracy preached by Washington. Imperialism is in the first stages of a critical new cycle whose portents have shown themselves in economics; its function as world policeman becomes ever more costly and difficult. And the price war? Chilean products are now sold in several markets and new ones can be opened up in the socialist world; the United States lacks the means to set up a universal blockade of the copper Chile is exporting. Quite different, of course, was the situation in Cuba twelve years ago, when 100 percent of its sugar was destined for the U.S. market and was wholly dependent on U.S. prices. When Frei won the 1964 elections in Chile, the price of copper immediately rose; when Allende won the 1970 elections it was already falling and fell further. But copper, always subject to sharp price fluctuations, has in recent years enjoyed fairly high prices, and since demand exceeds supply, scarcity prevents any serious drop. While aluminum has substantially replaced copper as a conductor of electricity, aluminum also requires copper; furthermore, cheaper and more efficient substitutes have not been found to displace it from either the steel or the chemical industry, and copper remains the chief raw material used in gunpowder, brass, and wire manufacture. [161]

Along the Andean slopes Chile has the world's greatest reserves of copper, a third of all those now known. Chilean copper generally appears with other metals, such as gold, silver, and molybdenum -- an additional factor which stimulates its exploitation. And Chilean workers are cheap: their low costs in Chile more than compensated Anaconda and Kennecott for their high costs in the United States, and Chilean copper, through the device of "expenditures abroad," paid more than $10 million a year to maintain the offices in New York. The average wage in Chilean mines in 1964 was barely one-eighth of the basic Kennecott refinery wage in the United States, although the workers' productivity was the same. The foreign personnel in the big mines inhabit a world apart, a little state-within-a-state where only English is spoken and where newspapers are especially published for the inhabitants. The worker's productivity has grown as the companies have mechanized methods of exploitation. Since 1945 copper production has increased by 50 percent, but the number employed in the mines has fallen by one-third.

Nationalization will put an end to a state of affairs that had become intolerable for Chile, and prevent repetition in copper of the plunder and descent into the abyss of the nitrate cycle. The taxes the companies paid to the state did not begin to compensate for the remorseless draining of mineral resources which nature bestowed but will "not renew. Furthermore, the taxes have decreased in relative terms since 1955, when a system of lower assessments for higher production was established, and since the Frei government's "Chilenization" of copper. In 1965 Frei made the state a partner of Kennecott and allowed the copper companies to almost triple their profits: tax assessments were based on an average price of $.29 per pound, although heavy global demand raised the actual price as high as $.70. Radomiro Tomic, the candidate chosen by the Christian Democrats to succeed Frei, admitted that the difference between the fictitious and the real price had lost Chile a vast sum in dollars. In 1969 the Frei government agreed to buy 51 percent of Anaconda's shares in half-yearly installments, on conditions that set off a new political scandal and further swelled opposition ranks. Anaconda's chairman had, according to the version given to the press, previously told the president of Chile: "Excellency, capitalists do not conserve [162] their assets for sentimental motives but for economic reasons. It is commonplace for a family to keep a wardrobe because it belonged to a grandfather, but corporations don't have grandfathers. Anaconda can sell all of its assets. It only depends on the price that is paid." But everywhere the nationalist tide runs faster, and the best of good humor cannot stop it; the lesser evil of "nationalization by agreement" had a short life. The structure of the international copper market is crumbling dangerously, and the four biggest producers -- Chile, Zambia, the Congo, and Peru -- have for some time been meeting to apply a common price-defense policy. At the end of 1969 the Peruvian affiliate of American Smelting & Refining signed a contract whereby the rich Cuajone mine, conceded to it years earlier, would remain in its possession. But despite some "traditional" clauses, the terms of the contract reflected the company's weakness and desperation in face of an international situation more unfavorable than ever to its interests. Under "normal" conditions, American Smelting would not have accepted the elimination of many of its privileges, which had made foreign mines all-powerful enclaves indifferent to Peru's economic development needs. Under the new conditions imposed by ascendant nationalism, the company hastened to proclaim its satisfaction with the terms of the agreement. Deep divergencies persist with regard to interpretation of the text, but the Peruvian government says that the recent state monopolization of mineral marketing also includes Cuajone copper. The state also reserves refining for its own projected plants, which will be priority recipients of the raw copper; and the company will be obliged to hire Peruvian technicians, share its technical innovations with the state, and fulfill a work plan setting definite terms for investments and production. For not abiding by the terms of the new mining laws, Anaconda and American Smelting have lost their concessions at Cerro Verde and Michiquillay, two big reserves which had remained untouched for half a century.

Tin Miners, Under and Above Ground

Almost a century ago a man half dead from hunger battled against the rocks of Bolivia's desolate altiplano. A dynamite charge exploded. [163] When he approached to pick up the pulverized bits of stone, he was dazzled by what he saw in his hands: sparkling fragments of the world's richest vein of tin. At dawn he mounted his horse and headed for Huanuni. Tests confirmed the value of his find. The tin could go straight from the vein to the port without the need for any concentration process. The man became the king of tin, and when he died Fortune described him as one of the ten multiest multimillionaires on earth. His name was Simon Ituri Patino. For years he sat in Europe making and unmaking Bolivian presidents and ministers, planning the hunger of his workers, organizing massacres, ramifying and extending his personal fortune: Bolivia was a country that existed for him, that was at his service.

Bolivia nationalized its tin after the heroic revolutionary days of 1952, but by then the super-rich mines had become poor. On the Juan del Valle mountain where Patino found his dazzling vein, the degree of purity of the ore had fallen 120-fold. Of 156,000 tons of rock brought out every month, only 400 tons are now recovered. The total length of the perforations is twice the distance from the mine to La Paz: the mountain is an anthill pierced by countless galleries, passages, tunnels, and chimneys. It is on the way to becoming an empty shell. Every year it loses a little height, and the gradual process of collapse is eating away the crest; from a distance it looks like a cavi-tied molar.

Antenor Patino not only collected a fat indemnity for the mines his father had almost exhausted, but he also kept control of the price and destination of the expropriated tin. He sat with fixed smile in his European mansion. "Mister Patino is the affable Bolivian tin king," the society pages continued saying for years after nationalization. [The New York Times (August 13, 1969) described him thus in ecstatically reporting the vacation of the Duke and Duchess of Windsor at Patino's sumptuous sixteenth-century castle near Lisbon. "We like to give the servants some peace and quiet," the hostess confessed, describing her daily program to Charlotte Curtis.

Then it is time to vacation in the Swiss mountains; photographers pursue counts and fashionable stars to St. Moritz. A fifty-year-old millionairess has just lost her second husband, a Ford vice-president: she smiles before the flash-bulbs and announces her new romance with a youth who takes her by the arm and gazes at her with frightened eyes. Beside them in the magazine picture is another "in" couple. He is a stubby man with Indian features -- thick eyebrows, hard eyes, squashed nose, prominent cheekbones: Antenor Patino still looks like a Bolivian. In another magazine he appears dressed as an Oriental prince, complete with turban, among various real princes who have gathered in the palace of Baron Alexis de Rede: Princess Margaret of Denmark, Prince Henry, Maria Pia de Savoia and her cousin Prince Miguel de Bourbon-Parma, Prince Lobckowitz, and other toilers in the vineyard.] For [164] nationalization -- a fundamental achievement of the 1952 revolution -- has not changed Bolivia's role in the international division of labor. Bolivia has continued to export the crude mineral, and nearly all the tin is still refined in the Liverpool smelter of Williams, Harvey and Company, which belongs to Patirio. Nationalization of the production source of any raw material is not enough, as painful experience has taught. Even if a country has become nominal master of its own subsoil, it can remain as condemned to impotency as ever. Throughout its history Bolivia has produced crude minerals and refined speeches. Rhetoric and poverty abound: cheap writers and expensive sages have always dedicated themselves to absolving the guilty of all guilt. Of every ten Bolivians, six still cannot read, while half of the children do not attend school. In 1971 Bolivia was at last to get a tin smelter of its own in Oruro, after a chain of betrayals, sabotage, intrigues, and bloodshed stretching back into the mists of time. [In July 1966, when General Alfredo Ovando announced an agreement with the German firm Klochner to install a state smelter, he saw a new destiny for "those poor mines which have only served, till now, to open pits in the lungs of our brothers the miners." As Sergio Almaraz wrote, the men who give their lives for the mineral "do not own it. They never did, neither before nor after 1952. For tin has no immediate value except in ingots. The mineral, a heavy, earthy powder, serves no purpose except to be thrown into a smelter."⁷

Almaraz tells the story of an industrialist, Mariano Pero, who for more than thirty years fought a lone war to have Bolivian tin refined in Oruro and not in Liverpool. In 1946, a few days after the fall of nationalist President Gualberto Villarroel, Pero walked into the Quemado Palace. He had come to pick up two ingots of tin, the first produced in his Oruro smelter. There was no point in leaving the symbolic ingots to continue adorning the president's desk: Villarroel had been hanged from a lamppost in the Plaza Murillo, and with his fall the power of the oligarchy had been restored. Pero picked up the ingots and walked away with them. They were stained with newly dried blood.] This country that till now has not been able to produce its own ingots can, however, boast of eight different law schools which turn out suckers of Indian blood in industrial quantities. [165]

A story is told of Mariano Melgarejo, a dictator of a century ago, who forced the British ambassador to drink a barrelful of chocolate as punishment for sneering at a glass of local chicha. The ambassador was paraded down La Paz' main street sitting backward on a donkey and then shipped back to London. An infuriated Queen Victoria supposedly called for a map of South America, chalked an X over Bolivia, and pronounced sentence: "Bolivia does not exist." For the world, in effect, Bolivia did not exist then or later: the looting of its silver, and later of its tin, was no more than an exercise of the rich countries' natural rights. The tin can is, after all, as much the emblem of the United States as the eagle or apple pie. But the tin can is not merely a "pop" symbol; it is also, if unwittingly, a symbol of silicosis in the Siglo XX and Huanuni mines: Bolivians die with rotted lungs so that the world may consume cheap tin. Tinplate is made from tin, and the tin is worth nothing: a half-dozen people fix its global price. What does the Bolivian miner's bitter life matter to the consumer of preserves or the money-exchange manipulators? Most of the tin refined in the world is consumed in the United States: according to Food and Agricultural Organization figures, the average U.S. citizen consumes five times more meat and milk and twenty times more eggs than the inhabitant of Bolivia. And the miners are well below the national average. In the cemetery at Catavi, where blind people solicit pennies to pray for the dead, a forest of white crosses stand over small graves scattered among the dark headstones of adults. Of every two children born in the mining camps, one dies soon after opening its eyes. The other, the survivor, will surely grow up to be a miner. And before he is thirty-five he will have no lungs.

The cemetery creaks. Beneath the graves countless tunnels have been dug, with openings barely wide enough for the men who disappear into them, like rabbits, in search of tin. New deposits of tin have accumulated through the years in the tons upon tons of slag piled up in huge gray mounds across the landscape. When the violent rains pour from low clouds over Llallagua -- where men drink themselves into a desperate stupor in the chicha taverns -- one sees the unemployed crouching beside the dirt roads to collect the tin as it is washed down. Here, tin is an omnipresent canned god reigning over men and things. There is not only tin in the bowels of Patino's old [166] mountain; the black sparkle of cassiterite betrays its presence even in the adobe walls of the camps. There is tin, too, in the yellowish mud that slides off the slag, and in the poisoned water that flows from the mountains; it is in earth and rock, surface and subsoil, in the sands and pebbles of the Seco riverbed. In these dry and stony regions almost thirteen thousand feet above sea level, where no grass grows and everything -- even the people -- is the dark color of tin, men stoically endure their enforced separation from the joys of the world. The camps are a huddle of one-room dirt-floor shacks; the wind howls through cracks in the walls, cutting to the bone. A university study of the Colquiri mine found that of every ten boys questioned, six sleep in the same bed with their sisters. "Many of the parents," the report added, "feel embarrassed when their children observe them in the sexual act." There are no baths; the latrines are public sheds covered with filth and flies. People prefer to use open ash-dumps where, despite the accumulated garbage and excrement and the contentedly rooting pigs, at least air circulates. Likewise, the water supply is collective; people must await the moment of its arrival and hurry with gasoline tins and pots for a place in the queue at the public trough. The food is meager and bad. It consists of potatoes, beans, rice, dried potato starch, ground corn, and sometimes a little tough meat.

We were deep down inside the Juan del Valle mountain. Hours earlier the siren shrilly summoning workers of the first shift had resounded through the camp. Going from gallery to gallery inside the mine, we had passed from tropical heat to polar cold and back again to the heat, always -- for hours -- in the same poisoned air: humid, gas filled, dusty, smoky. Breathing it we could understand why miners lose their senses of smell and taste in a few years. They all chew coca-leaf and ash as they work, and this too is part of the annihilation process, for coca, by deadening hunger and masking fatigue, turns off the alarm system which helps the organism stay alive. But the worst of it was the dust: circles of light from the miners' helmets danced dimly in the gloom, showing thick white curtains of deadly silica. It does not take long to do its work. The first symptoms are felt within a year, and in ten years one enters the cemetery. Late-model Swedish drills are used in the mine, but the ventilation system and work [167] conditions have not improved with time. Up on the surface, independent workers use twelve-pound wooden sledgehammers to conquer the rock, just as they did a century ago, as well as antique pumping devices and sifters to collect the mineral. They work like dogs and are paid in pennies, but they have the advantage of fresh air over the underground workers, prisoners sentenced without appeal to death by asphyxiation.

The din of the drills stopped and the workers took a break as we waited for more than twenty charges of dynamite to explode. Death in the mine can also be quick and thunderous: it is enough to miscount the number of detonations or to leave a wick burning longer than it should. Or a loose rock, a tojo, may crash on your head. Another form of death is by bullet: St. John's Night 1967 was the latest bead in a long rosary of massacres. At dawn soldiers took up kneeling positions on the hillsides and fired volley after volley into mining camps lit by bonfires for the fiesta. ["When I sit up, I'm drunk. My eyes -- I see three or four of you. Can't feed myself. I'm just a baby, a child." Saturnino Condon, a veteran construction worker in the Siglo XX mining camp, lies in a Catavi hospital bed. He has been there four years, one of the victims of the St. John's Night massacre. He had been offered triple pay for working on Saturday, and he decided not to join in the chicha party like everyone else. He went to bed early. That night he dreamed that a gentleman was hurling spikes into his body: "Big spikes, they stuck in me." He awoke several times because of the rain of bullets that began whamming into the camp at 5 a.m. "My body felt all torn to bits, I had the shivers, and I was scared, scared -- that's how it was. My old woman said to escape. But what did I do? I didn't go anywhere. Get going, she kept saying. Guns firing in the night, what's it about, what goes on, pap-pap-pap-pap-pap! And me waking and drowsing off and not escaping, and the old lady repeating, Get a move on, escape! What'11 they do to me, I says to her, I'm a bricklayer, what could they want to do?" He woke again at around eight and sat up in bed. A bullet tore through the roof and through his wife's hat, burying itself in his body and cracking his spinal column.] But slow, silent death is the mine's speciality. Vomiting blood, coughing, the sensation of a leaden weight on the back and acute chest pains are the signs that herald it. After the medical diagnosis, pilgrimages to an endless chain of bureaucrats. You are allowed three months before eviction from your house.

After the explosions we could talk. The workers' cheeks bulged with coca and greenish juice oozed through their tight lips. A miner [168] passed in a hurry, splashing up mud from between the rails of the gallery. "That's a new man," they told me. "See how fresh he looks in his army pants and yellow jacket? Just came on the job, and how he works! He still thinks he's smart. Still doesn't feel anything."

The technocrats and bureaucrats do not die of silicosis, but they live off it. The general manager of the Corporation Minera Boliviana (COMIBOL) earns one hundred times as much as a worker. From a slope that falls sharply to a riverbed, in the Llallagua region, one can see the Maria Barzola pampa. It was so named in honor of the militant woman worker who, the Bolivian flag sewn to her body, was machine-gunned at the head of a demonstration thirty years ago. Beyond the Maria Barzola pampa one can see Bolivia's best golf course -- the one Catavi's engineers and chief officials use. Dictator Rene Barrientos had cut the miners' hunger wages in half in 1964 and at the same time had raised salaries for technicians and chief bureaucrats. The top-echelon salaries are secret -- secret and paid in dollars. There is an all-powerful "advisory group" of technicians from the Inter-American Development Bank, the Alliance for Progress, and the foreign credit bank, who lay down the guidelines for the nationalized mines in Bolivia -- to such an extent that COMIBOL, by now a state within a state, has become living propaganda against the nationalization of anything. The power of la rosea, the old oligarchy, has been replaced by that of a numerous "new class" which has devoted its best efforts to sabotaging the state-owned mines from within. The engineers not only torpedoed every project and plan for a national smelter, but helped to confine state mining within the limits of the old Patiiio, Aramayo, and Hochschild deposits, accelerating the process of draining the reserves. Between the end of 1964 and April 1969, Barrientos, with the open complicity of technicians and managers, broke the sound barrier in the surrender of Bolivian subsoil resources to imperialist capital. Sergio Al-maraz has told the story of tin concessions to the International Mining Corporation. With a mere $5,000 in declared capital, this pompously named enterprise secured a contract that enabled it to amass more than $900 million.8 [169]

Iron Teeth in Brazil's Flesh

The United States pays less for Brazilian and Venezuelan iron than for iron from its own subsoil. But this is not the key to the feverish desire for iron ore deposits abroad: more than just a business, capture of foreign mines is an imperative of national security. Steel cannot be made without iron, and 85 percent of U.S. industrial production contains steel in some form. As we have seen, the subsoil is becoming exhausted. When supplies from Canada were reduced in 1969, this was at once reflected in the increase of iron imports from Latin America.

Venezuela's Cerro Bolivar is so rich that its dirt is taken by U.S. Steel and loaded directly into the holds of U.S.-bound ships; its flanks betray the deep wounds that bulldozers are making in it. The company estimates that it contains some $8 billion-worth of iron. In a single year, 1960, U.S. Steel and Bethlehem Steel realized a greater than 30 percent profit on their Venezuelan iron investment, and this profit equaled all the taxes paid the Venezuelan state in the decade since 1950. Since both firms sell the iron ore to their own steel mills in the United States, they have no interest in defending prices; on the contrary, it suits them that the raw material should be as cheap as possible. The world price of iron, which fell sharply between 1958 and 1964, has been relatively stable since and remains so; meanwhile, the price of steel has continued to rise. Steel is produced in the world's wealthy centers, iron in the poor suburbs; steel pays "labor aristocracy" wages, iron mere subsistence wages.

Thanks to information gathered and published by the International Geological Congress in Stockholm in 1910, U.S. businessmen could for the first time evaluate the amount of wealth in the subsoil of various countries. One of these -- perhaps the most tempting -- was Brazil. Many years later, in 1948, the U.S. embassy in Brazil created a new job: "minerals attache." From the start he had at least as much work as the military or cultural attaches -- so much, indeed, that two minerals attaches were soon appointed instead of one. Soon Bethlehem Steel received the splendid Amapa manganese deposits from Eurico Dutra's government. By 1952 Brazil had agreed, in a military pact with the United States, not to sell raw materials of strategic value -- such as iron -- to any socialist country. This was one of the [170] causes of the tragic fall of President Getulio Vargas, who sold iron to Poland and to Czechoslovakia in 1953 and 1954 at much higher prices than the United States was paying. In 1957 Hanna Mining paid $6 million for most of the shares of the British firm St. John Mining, which had been exploiting Minas Gerais gold since the empire's early days. St. John operated in the Paraopeba valley, where the greatest iron reserves on earth, valued at $200 billion, are located. The British firm was not legally authorized to exploit this fabled wealth, and, under clear constitutional and legal clauses (which Duarte Pereira lists in his work on the subject), neither was Hanna. But as it was later realized, this was the business deal of the century.

At the time Hanna's chairman, George Humphrey, was a big wheel in the U.S. government -- he was Secretary of the Treasury and director of the Export-Import Bank (Eximbank), the official bank for financing foreign trade operations. St. John had asked Eximbank for a loan, but nothing came of it until Hanna took over the firm. After that, successive Brazilian governments were subjected to fierce pressure: Hanna's directors, lawyers, and advisers -- Lucas Lopes, Jose Luiz Bulhoes Pedreira, Roberto Campos, Mario da Silva Pintos, Otavio Gouveia de Bulhoes -- were also top-level members of the Brazilian government and continued occupying posts as ministers, ambassadors, and directors of services in subsequent years. Hanna had picked its general staff sagaciously. The bombardment to recognize Hanna's right to exploit the iron which properly belonged to the state grew in intensity. On August 21, 1961, President Janio Quadros signed a bill annulling the illegal rights extended to Hanna and restoring Minas Gerais iron to the national reserve. Four days later the armed forces made Quadros resign: "Terrible forces have risen against me," said the text of his resignation.

A popular rising in Porto Alegre, headed by Leonel Brizola, frustrated the military coup and put Quadros' vice-president, Joao Goulart, in power. But when a minister sought to implement the fatal decree against Hanna, U.S. Ambassador Lincoln Gordon wired Goulart, indignantly protesting the government's threatened strike against the interests of a U.S. concern. The judiciary decreed Quadros' bill valid, but Goulart vacillated. Meanwhile, Brazil set the wheels in motion [171] for a minerals transshipment depot in the Adriatic which would supply iron to various European countries, socialist and capitalist. Such a direct sale of iron ore implied an intolerable defiance of the big firms that manipulate global prices. The depot never materialized, but other nationalist measures -- such as plugging the drain of the foreign concerns' profits -- were implemented and proved to be detonators in an explosive political situation. The Damoclean sword of the Qua-dros bill remained hanging over Hanna's head. Finally, on the last day of March 1964, the coup d'etat exploded in Minas Gerais, where the disputed iron deposits happened to be located. "For Hanna," commented Fortune, "the revolt that overthrew Goulart last spring arrived like a last-minute rescue by the 1st Cavalry."⁹

Hanna men moved in to occupy the vice-presidency and three ministries. On the day of the military revolt, the Washington Star had run an editorial that was at least prophetic: "Here is a situation in which a good, effective, old-style coup by conservative military leaders may well serve the best interests of all the Americas." 10 Goulart had still neither resigned nor left Brazil when President Lyndon Johnson, unable to restrain himself, sent his famous congratulatory telegram to Ranieri Mazzili, who had provisionally assumed the presidency: "The [North] American people have watched with anxiety the political and economic difficulties through which your great nation has been passing and have admired the resolute will of the Brazilian community to resolve these difficulties within a framework of constitutional democracy and without civil strife." u A little over a month later Ambassador Lincoln Gordon, on a euphoric tour of army barracks, said in a speech at the war college, the Escuela Superior de Guerra, that the success of the plot "might be included with the Marshall Plan proposal, the Berlin blockade, the defeat of Communist aggression in Korea, and the solution of the Cuban missile crisis as one of the most important moments of change in mid-twentieth century world history." 12 One of the U.S. embassy's military officials had offered material aid to the plotters shortly before the coup, and Gordon himself had suggested that the United States would recognize an autonomous government in Sao Paulo if it could maintain itself for two days. It is not worth detailing all the evidence of the [172] importance of U.S. economic aid (we will take this up later), and of U.S. help on the military and trade union level, in the denouement of these events. [According to a revealing article in Selecciones del Reader's Digest, thanks to the good offices of the American Institute for Free Labor Development, which has its headquarters in Washington, the Brazilian putschists could coordinate their troop movements by cable. The new military regime rewarded AIFLD by designating four of its graduates "to clean up the Red-dominated unions . . ."¹³]

After it tired of throwing the books of Dostoevski, Tolstoy, Gorky, and other Russians into bonfires or into Guanabara Bay, and after it had sentenced countless Brazilians to exile, prison, or the grave, the Castelo Branco dictatorship got down to business: it gave away the iron and everything else. Hanna got its decree on December 24, 1964. This Christmas parcel contained not only total freedom to exploit the Paraopeba deposits in peace, but support for the firm's plans to open a port of its own sixty miles from Rio and to build a railroad to transport the iron. In October 1965, Hanna formed a consortium with Bethlehem Steel for joint exploitation of the iron deposits. The tireless Lincoln Gordon had finished the job, everyone could live happily ever after, and he left to preside over a university in Baltimore. In April 1966, after some months of vacillation, Johnson named John Tuthill as his replacement, explaining that he had delayed because Brazil needed a good economist.

U.S. Steel did not lag behind. Why should it be left off the party invitation list? Before long it teamed up with a state mining enterprise, the Companhia Vale do Rio Doce, which in effect became its official pseudonym. Resigning itself to no more than 49 percent of the shares, U.S. Steel thus got the Sierra de los Carajas iron deposit concession in Amazonia. Technicians say that it compares in size with Hanna-Bethlehem's bonanza in Minas Gerais. The Brazilian government, as usual, said that Brazil lacked the capital to exploit its own wealth.

The Black Curse of Petroleum

Along with natural gas, petroleum is today the chief fuel that keeps our world in motion; it is a raw material of rising importance [173] for the chemical industry and is the basic strategic material for military activities. Nothing compares with this "black gold" as a magnet for foreign capital, nothing earns such lush profits, no jewel in the diadem of capitalism is so monopolized, and no businessmen wield the global political power of the great petroleum corporations. Standard Oil and Shell seat and unseat kings and presidents, finance palace plots and coups d'etat, have innumerable generals, ministers, and James Bonds at their command, and make decisions about peace or war in every field and every language. Standard Oil of New Jersey (now Exxon) is the capitalist world's biggest industrial enterprise; outside the United States no industrial enterprise has greater power than Royal Dutch/Shell. Affiliates sell crude petroleum to subsidiaries which refine it and sell it to branch organizations for distribution: there is no loss of blood in the whole internal circulatory system of the cartel, which also owns the pipelines and most of the oil fleets on the seven seas. Prices are manipulated on a world scale to keep taxes low and profits high: the crude petroleum gets constantly cheaper, the refined constantly more expensive.

With petroleum, as with coffee or meat, rich countries profit more from the work of consuming it than do poor countries from the work of producing it. The ratio is ten to one: of the $11 that the derivatives of a barrel of petroleum sell for, countries exporting the world's most important raw material get a sum total of $1 from taxes and extraction costs. Countries in the developed zone, where the oil companies have their head offices, get the other $10, the sum total of their own taxes -- eight times larger than those of the producing countries -- and the costs and profits of transport, refining, processing, and distribution, monopolized by the big corporations.¹⁴

While petroleum from U.S. wells enjoys high prices and U.S. oil workers' wages are comparatively generous, the price of Venezuelan and Middle Eastern petroleum has been falling through the late 1950s and all through the 1960s. A barrel of Venezuelan petroleum, for example, cost $2.65 in 1957 and $1.86 as this chapter is written. The Rafael Caldera administration has promised to unilaterally fix the price much higher, but even by manipulating statistics it will not reach the 1957 level. The United States is at the same time the biggest producer and the biggest importer of petroleum. When most [174] of the crude petroleum sold by the oil companies came from U.S. wells, the price was kept up; but when, during World War II, the United States became a net importer and the cartel began applying a new policy, the price systematically sagged. An odd inversion of the "laws of the market": the price of petroleum falls as world demand rises and factories, automobiles, and generating plants multiply. And another paradox: while the price of petroleum falls, the price consumers everywhere pay for fuel rises. There is an enormous disproportion between the price of crude oil and that of its derivatives. This whole chain of absurdity is perfectly rational: no need to seek an explanation in supernatural forces. For, as we have seen, the oil business in the capitalist world is in the hands of an all-powerful cartel. The cartel was born in 1928, in a castle wreathed in Scottish mists, when Standard Oil of New Jersey, Shell, and Anglo-Iranian (now known as British Petroleum) agreed to divide up the planet. Standard Oil of New York (now Mobil), Standard Oil of California, Gulf, and Texaco joined later. Founded by Rockefeller in 1870, Standard Oil had split in 1911 into thirty-five different firms under the requirements of the Sherman Anti-Trust Act; the first of the teeming Standard family as we now know it is Standard Oil of New Jersey. Today its petroleum sales, added to those of Standard Oil of New York and Standard Oil of California, amount to half of the cartel's entire sales. The Rockefeller group of oil concerns is so vast that it accounts for one-third of all profits earned throughout the world by all U.S. corporations. Standard Oil of New Jersey, a typical multinational corporation, earns its biggest profits abroad, with Latin America bringing in more than the United States and Canada put together: south of the Rio Grande its profit rate is four times higher. In 1957, more than half of its global profits came from its Venezuelan affiliates; in the same year Shell's Venezuelan affiliates accounted for half of Shell's world profits. These multinational corporations do not belong to the nations in which they operate: their multinationality consists in funneling a torrent of petroleum and dollars from the four points of the compass into the capitalist system's centers of power. They have no need to export capital to finance the expansion of their business; the profits taken out of poor countries not only flow directly to the few cities where their major coupon-clippers live, but they are [175] partially reinvested to strengthen and extend the international operations network. The structure of the cartel implies the domination of many countries and the penetration of many governments; petroleum saturates presidents and dictators and further deforms the societies it conscripts into its service. It is the corporations, pencils on a terrestrial globe, that decide which zones will be exploited and which held in reserve, what price producers must get and consumers must pay. The natural wealth of Venezuela, and of other oil-bearing Latin American lands subjected to this organized looting, has become the chief instrument of political servitude and social degradation. This is a long story of infamies, of deeds of business prowess which have spread a black curse across the earth.

Cuba brought handsome peripheral profits to Standard Oil of New Jersey. Standard Oil bought crude oil from its Venezuelan affiliate, Creole Petroleum, and refined and distributed it on the island at prices that best suited it at each stage. When the Cuban Revolution was in full effervescence in October 1959, an official State Department note to Havana expressed concern about the future of U.S. investments in Cuba: bombardments by "pirate" planes from the north had already begun and relations were tense. In January 1960, President Eisenhower cut the Cuban sugar quota, and in February Fidel Castro signed a trade agreement with the U.S.S.R. to exchange sugar for petroleum and other products at prices beneficial to Cuba. Standard Oil of New Jersey, Shell, and Texaco refused to refine Soviet petroleum, and in July the Cuban government nationalized them without compensation. The corporations, headed by Standard Oil, began a blockade, first boycotting qualified personnel, then machinery replacement parts, then transportation. The conflict was a test of sovereignty and Cuba emerged with flying colors. It simultaneously stopped being a star in the U.S. flag and a cog in the worldwide Standard Oil machine.

Twenty years earlier, Mexico had had its own experience of an international embargo decreed by Standard Oil of New Jersey and Royal Dutch/Shell: from 1939 to 1942 the cartel organized a blockade of Mexican petroleum exports and of supplies for its wells and refineries. President Lazaro Cardenas had nationalized the oil concerns. Nelson Rockefeller, who had graduated as an economist in [176] 1930 with a thesis on his own Standard Oil's virtues, journeyed to Mexico to negotiate an agreement, but Cardenas would not budge. Standard Oil and Shell, having divided up Mexico by taking the north and the south respectively, defied Mexican Supreme Court rulings on the application of Mexican labor laws; at the same time, they drained the famous Fajo de Oro deposits with startling speed and were making Mexicans pay more for their own petroleum than they received for what was sold in the United States and in Europe. [This is still a normal phenomenon in various countries. In Colombia, for example, where petroleum is freely exported without any taxes, the state refinery buys Colombian petroleum from foreign concerns at a price 37 percent higher than the world price, and has to pay in dollars.] In a few months of feverish exporting, wells that could have continued producing for thirty or forty years were drained dry. "Nearly three decades of foreign operations had robbed Mexico of her richest oil deposits," writes Harvey O'Connor, "and left only a collection of antique refineries, depleted fields, ramshackle camps, the slum city of Tampico, and bitter memories."¹⁵

In less than twenty years production had dropped by 80 percent. Mexico was left with a decrepit industry, geared to foreign demand, and fourteen thousand workers; the technicians took off and even the transportation network disappeared. Cardenas made recovery of the petroleum a national crusade and conquered the crisis with imagination and courage. Today Pemex (Petroleos Mexicanos), the enterprise created in 1938 to take charge of all production and marketing, is the largest nonforeign concern in Latin America. Although between 1947 and 1962 the Mexican government paid heavy indemnities to the expropriated corporations out of Pemex's profits, Mexico, as Jesus Silva Herzog has said, "is not the debtor of these pirate companies but their legitimate creditor." 16 In 1949 Standard Oil vetoed a loan the United States was going to make to Pemex, and years later, after generous indemnities had healed the wounds, Pemex had a similar experience with the Inter-American Development Bank.

Uruguay was the first Latin American country to install a state refinery. ANCAP was created in 1931, and the refining and sale of crude petroleum were to be among its chief functions. It was a [177] national response to a long history of abuse by the international cartel on the Rio de la Plata. At the same time, the state contracted to buy cheap petroleum from the U.S.S.R. The cartel immediately financed a campaign of calumny against the Uruguayan state concern and began threatening that no one would sell Uruguay machinery, it would find itself without any crude petroleum, the state was incompetent to run such a complicated business. The palace coup of March 1933 exuded the smell of oil; the Gabriel Terra dictatorship annulled ANCAP's right to monopolize fuel imports, and in January 1938 it signed ominous "secret agreements" -- still in effect -- with the cartel, agreements which the public did not learn of for a quarter of a century. Uruguay has to buy 40 percent of its crude petroleum from whomever Standard Oil, Shell, Atlantic, or Texaco might indicate, at prices fixed by the cartel; and the state, while retaining the refining monopoly, has to pay all the corporations' costs, including publicity, executive salaries, and luxurious office furnishings. "Esso es pro-greso" -- Esso is progress -- warbles the TV, and the advertising barrage does not cost Standard Oil a cent. The Banco de la Republica's lawyer is also in charge of Standard Oil's public relations: the state pays him for both jobs.

In 1939 ANCAP's refinery -- emasculated shortly after birth, as we have seen, but still an example of defiance to cartel pressure -- was operating successfully. The chief of Brazil's Conselho Nacional del Petroleo, General Horta Barbosa, went to Montevideo and was exhilarated by what he saw: the Uruguayan refinery had paid off almost all of its installation costs in a single year. Thanks to the efforts of Barbosa and the enthusiasm of other nationalist military men, the Brazilian state enterprise was able to get under way in 1953, to the cry of "The petroleum is ours!" Today Petrobras is the biggest concern in Brazil.17 It explores, extracts, and refines Brazilian petroleum. But Petrobras was also emasculated when the cartel appropriated two of its big sources of income. First, the distribution of gasoline, oils, kerosene, and various fuels, an enormous business which Esso, Shell, and Atlantic manage effortlessly by telephone and so profitably that it attracts more U.S. investment than anything in Brazil except the automobile industry. Second, the lush petrochemical industry, which the Castelo Branco dictatorship denationalized a few years [178] ago. Recently the cartel started a loud campaign to take the refining monopoly away from Petrobras. Petrobras' defenders recall that before 1953, when the field was wide open, private industry paid no attention to Brazilian petroleum,18 and remind the short-memoried public of an episode that illustrates the goodwill of the monopolies. In 1960 Petrobras assigned two Brazilian technicians to head up a survey of the country's deposits. As a result of its reports, the little Northeastern state of Sergipe took the lead in petroleum production. Shortly before, in August, U.S. technician Walter Link, who had been chief geologist for Standard Oil of New Jersey, had received $500,000 from the Brazilian state for a pile of maps and an extensive report belittling the Sergipe deposits as "unviable": until then they had been rated "Grade B," and Link demoted them to "Grade C"; it was subsequently established that they were Grade A.19 According to Harvey O'Connor, Link was said to have worked the whole time as a Standard Oil agent, intending in advance not to find any petroleum so that Brazil would remain dependent on imports from the Rockefeller affiliate in Venezuela.²⁰

Likewise in Argentina, the foreign concerns and their native echoes have always insisted that the subsoil contains little petroleum, although investigations by technicians of Yacimientos Petroliferos Fiscales (YPF), the state organization, have established beyond doubt that deposits exist beneath almost half of the national territory and the Atlantic coastal shelf. Each time talk of the Argentine subsoil's poverty becomes fashionable, the government makes a new concession to some member of the cartel. YPF has been the target of continuous and systematic sabotage since its inception. Until a few years ago, Argentina was one of the last historical settings for the interim-perialist conflict between declining Britain and the ascendant United States. Cartel agreements did not prevent a dispute, sometimes involving violence, between Shell and Standard Oil over Argentina's petroleum: the coups d'etat that have followed one after the other in the past forty years provide some eloquent coincidences. The Argentine Congress was ready to pass the oil nationalization law on September 6, 1930, when Jose Felix Uriburu's barracks putsch ousted nationalist leader Hipolito Irigoyen from the presidency. The Ramon Castillo government fell in June 1943 when it was signing an agreement [179] to promote oil extraction by U.S. capitalists. In September 1955, Juan Domingo Peron went into exile when the Argentinian Congress was about to approve a concession to Standard Oil of California. Arturo Frondizi set off more than one acute crisis in the three branches of the armed services by announcing that the country's entire subsoil would be put up for bids by concerns interested in extracting petroleum. In August 1959 the offer was called off for lack of bidders. The plan was promptly revived and again called off in October 1960. Frondizi made various concessions to U.S. members of the cartel, and British interests -- decisive in the navy and in one political group in the army -- played a part in his fall in March 1962. Arturo Mia annulled the concessions and was overthrown in 1966; Juan Carlos Ongania's hydrocarbons law the following year showed the United States to be the final victor in the internal struggle.

Petroleum has not only sparked coups d'etat in Latin America: it also set off a war -- the Chaco War of 1932-1935 -- between South America's two poorest peoples. Rene Zavaleta called the mutual massacre of Bolivians and Paraguayans "the war of the naked soldiers." 21 Louisiana Senator Huey Long shook the United States on May 30, 1934, with a violent speech accusing Standard Oil of New Jersey of provoking the conflict and of financing the Bolivian army so that it would appropriate the Paraguayan Chaco on its behalf. It needed the Chaco -- which was also thought to be rich in petroleum -- for a pipeline from Bolivia to the river. "These criminals," Long charged, "have gone down there and hired their assassins. [Long took off the adjectival brakes regarding Standard Oil, calling it "criminal, evil, wicked, domestic assassin, foreign assassin, international conspirator, a gang of rapacious highwaymen and thieves a bunch of vandals and thieves."²²] At Shell's urging, the Paraguayans marched to the slaughterhouse: advancing northward, the soldiers discovered Standard Oil's perforations at the scene of the dispute. It was a quarrel between two corporations, enemies and at the same time partners within the cartel, but it was not they who shed their blood. In the end Paraguay won the war but not the peace. Spruille Braden, the notorious Standard Oil agent, chaired the negotiating commission which retained for Bolivia and for Rockefeller thousands of square miles claimed by the Paraguayans. [180]

Close to the battlefields of that war he the oil wells and great natural gas deposits which Gulf Oil, the Mellon family concern, lost in Bolivia in October 1969. "The days of indignity for Bolivia are ended," cried Alfredo Ovando in proclaiming nationalization from the Quemado Palace balcony. Two weeks earlier, before he had taken power, Ovando had sworn to a group of nationalist intellectuals that he would nationalize Gulf; he had drafted the decree, signed it, and kept it undated in an envelope. [Five months earlier, Rene Barrientos' helicopter had tangled fatally with telegraph wires in the Arque ravine. Human imagination could not have conceived of a more perfect death. The helicopter was a personal gift from Gulf Oil; the telegraph wires belong to the state. Burned up along with Barrientos were two suitcases full of money he was taking to distribute among the peasants, as well as some machine-guns which began spraying bullets around the flaming helicopter, preventing anyone from coming to the rescue as the dictator was roasted alive.]

In addition to decreeing nationalization, Ovando annulled the Petroleum Code, called the "Davenport Code" in homage to the lawyer who drafted it in English. In return for accepting it Bolivia had obtained a U.S. loan in 1956; on the other hand, Eximbank, private New York bankers, and the World Bank had always turned down requests for credit to develop YPFB, the state petroleum organization. The U.S. government always makes common cause with private oil corporations. [Examples abound in recent and remote history. Irving Florman, U.S. ambassador to Bolivia, reported to the White House's Donald Dawson on December 28, 1950: "Since my arrival here I have worked diligently on the project of throwing Bolivia's petroleum industry wide open to American private enterprise, and to help our national defense program on a vast scale." He went on: "I knew that you would be interested to hear that Bolivia's petroleum industry and the whole land is now wide open for free American enterprise. Bolivia is, therefore, the world's first country to denationalize or to have nationalization in reverse, and I am proud to have been able to accomplish this for my country and the administration."²³] Under the Code, Gulf received a forty-year concession to the country's richest fields. The Code provided for ridiculously low state participation in the companies' profits: for many years, a mere 11 percent. The state became a partner in the concessionaire's expenses but had no control over the spending, making this the last word in giveaways: the state took the risks, Gulf took none. In the "letter of intention" signed by Gulf at the end of 1966, during [181] the Barrientos dictatorship, it was even provided that in joint operations with YPFB, Gulf would recover 100 percent of the capital it invested in exploration of an area if petroleum was not found. If it was found, expenses would be recovered through later exploitation, but meanwhile would be charged to the state organization as liabilities. And Gulf would appraise the expenses to its own taste.²⁴ In this same "letter of intention," Gulf appropriated ownership of gas deposits which had never been conceded to it -- the Bolivian subsoil contains much more gas than petroleum.

The party was not yet over. A year before Ovando expropriated Gulf in Bolivia, Velasco Alvarado had nationalized the deposits and refinery of Standard Oil of New Jersey's Peruvian affiliate, International Petroleum (IPC). Velasco had taken power at the head of a military junta and on the crest of a political scandal: the Belaunde administration had "lost" the last page of the Talara agreement between the state and IPC. The vanished page contained the guarantee of the minimum price to be paid by IPC for crude petroleum produced at its refinery. The scandal did not end there. It was also disclosed that the Standard Oil subsidiary had swindled the state out of more than a billion dollars in unpaid taxes and other kinds of fraud and corruption over half a century. The head of IPC had had sixty interviews with President Belaunde before reaching the agreement that sparked the military rising; for two years the U.S. State Department had suspended all aid to Peru while the negotiations proceeded, were broken off, and reopened. [When the scandal broke, the U.S. embassy failed to observe a prudent silence. One of its officials even said that no original copy of the Talara agreement existed.²⁵] There was hardly time to restore the aid since the submissive president's surrender sealed his fate. When the Rockefeller concern protested before a Peruvian court, people threw coins in its lawyers' faces.

Latin America is a Pandora's box; the tortured subcontinent's capacity to spring surprises is never exhausted. In the Andean region, military nationalism has come impetuously to the surface like a long-hidden subterranean river. The same generals who today are pursuing a contradictory but well-aimed policy of reform and patriotic affirmation were only yesterday mowing down guerrilleros. Thus [182] many of the banners of the dead have been picked up by those who killed them. In 1965 the Peruvian officers were spraying guerrilla zones with napalm, their know-how supplied by IPC at the Las Pal-mas air base near Lima. The corporation could not foresee what lay in store for it.

Vultures over Lake Maracaibo

Though its participation in the world market has dwindled by half in the past decade, Venezuela is still the top petroleum exporter. Almost half the profits U.S. capitalists take from Latin America come from Venezuela. One of the world's richest countries, it is also one of the poorest and most violent. It boasts of Latin America's highest per-capita income and most complete and up-to-date highway network, and no country consumes as much Scotch whiskey per inhabitant. Immediately exploitable iron, petroleum, and gas reserves in its subsoil could multiply by ten the wealth of every Venezuelan; the population of Germany or England could fit into its enormous virgin lands. In half a century, oil rigs have extracted an income double the resources of the Marshall Plan. Since the first well blew, the population has multiplied by three and the national budget by one hundred, but most of the people scramble for the plush minority's leavings, still as poor as when the country depended on cacao or coffee. The capital, Caracas, has grown 700 percent in thirty years: the old city of airy patios, central plaza, and silent cathedral is covered with skyscrapers as Lake Maracaibo is covered with oil wells. Today it is a supersonic, deafening, air-conditioned nightmare, a center of oil culture that might pass as the capital of Texas. Caracas chews gum and loves synthetic products and canned foods; it never walks, and poisons the clear air of the valley with the fumes of its motorization; its fever to buy, consume, obtain, spend, use, get hold of everything leaves it no time to sleep. From surrounding hillside hovels made of garbage, half a million forgotten people observe the sybaritic scene. The gilded city's avenues glitter with hundreds of thousands of late-model cars, but in the consuming society not everyone consumes. According to the census, half of Venezuela's children and youngsters do not go to school. [183]

Every day Venezuela produces 3.5 million barrels of petroleum to move the capitalist world's industrial machinery, but four-fifths of the concessions owned by Standard Oil, Shell, Gulf, and Texaco are untouched reserves and over half the value of the exports never returns to the country. Creole (Standard Oil) publicity brochures point with pride to the corporation's Venezuelan philanthropies much as the Royal Guipuzcoan Company proclaimed its own virtues in the eighteenth century; the profits milked from this wonderful cow, in proportion to capital invested, are only comparable with those obtained by old-time slave merchants and pirates. No country has yielded as much for world capitalism in so short a time: the wealth drained from Venezuela, according to Domingo Alberto Rangel, exceeds what the Spaniards took from Potosi or the English from India. Some estimates put the real profits of Venezuelan oil concerns at 38 percent in 1961 and 48 percent in 1962, although the profit rates announced in their balance sheets were 15 percent and 17 percent respectively. The difference is attributable to the juggling of accounts and to hidden transfers. In the complex mechanism of the oil business, with its multiple simultaneous price systems, it is hard to estimate the profits hidden behind the artificial reduction of the price of crude oil -- which from well to gasoline pump always circulates through the same veins -- and the artificial raising of production costs which include fancy salaries and inflated publicity expenditures. But by official figures, Venezuela, far from receiving new investments from abroad, has experienced systematic de-investment in the past decade. It suffers an annual bloodletting of more than $700 million, "convicted and confessed" as "interest on foreign capital." The only new investments are provided by the country itself. Meanwhile, oil extraction costs are falling sharply as the companies use less labor. From 1959 to 1962 alone, the work force was cut by ten thousand; somewhat more than thirty thousand workers remained active, but by the end of 1970 petroleum only employed twenty-three thousand. Yet production has greatly increased in the decade.

Growing unemployment sharpened the crisis in the Lake Mara-caibo oil camps. The lake is a forest of towers. Within these iron structures the endlessly bobbing pumps have for half a century pumped up all the opulence and all the poverty of Venezuela. Alongside, [184] flames lick skyward, burning the natural gas in a carefree gift to the atmosphere. There are pumps even in houses and on street corners of towns that spouted up, like the oil, along the lakeside -- towns where clothing, food, and walls are stained black with oil, and where even whores are known by oil nicknames, such as "The Pipeline," "The Four Valves," "The Derrick," "The Hoist." Here clothing and food cost more than in Caracas. These modern villages, of cheerless birth but quickened by the euphoria of easy money, have discovered that they have no future. When the wells die, survival becomes something of a miracle: skeletons of houses remain, oily waters lick abandoned shores and poison the fish. Mass firings and growing mechanization bring misfortune, too, to cities that live from exploiting still-active wells. "Oil has come and gone for us here," people were saying in Lagunillas in 1966. "It would have been better for us if these machines had never come . . ." Cabimas, which for fifty years was Venezuela's biggest oil source and brought so much prosperity to Caracas and the oil companies, does not even have privies. It has two asphalt streets.

The euphoria began in the 1920s. Around 1917 oil coexisted in Venezuela with traditional latifundios, those enormous extensions of thinly populated or idle land where hacendados kept up production by whipping their peons or burying them alive up to the waist. At the end of 1922 the La Rosa well started gushing, one hundred thousand barrels a day, and the petroleum orgy was on. Lake Maracaibo sprouted rigs and derricks and was invaded by helmeted men; peasants swarmed in to build plank-and-oilcan huts on the bubbling ground and offer their muscles to petroleum. Plains and forests resounded for the first time with Oklahoma and Texas accents, and in the bat of an eye seventy-three companies were born. The carnival king of the concessions was Juan Vicente Gomez, an Andean cattleman who spent his twenty-seven years as dictator (1908-1935) making children and business deals. While the black geysers spouted on all sides, Gomez took petroleum shares from his bursting pockets to reward his friends, relations, and courtiers, the doctor who looked after his prostate, the generals who served as his bodyguard, the poets who sang his praises, and the archbishop who gave him a special dispensation to eat meat on Good Friday. The great powers covered [185] Gomez's breast with gleaming decorations: the automobiles invading the world's highways needed food. The dictator's favorites sold concessions to Shell or Standard Oil or Gulf; the traffic in influence and bribes provoked speculation and set mouths watering for subsoil. Native communities were robbed of their lands and many farm families lost their holdings in one way or another. The petroleum law of 1922 was drafted by representatives of three U.S. firms. The oilfields were fenced in and had their own police. No one could enter without a company pass, and even the roads on which the oil was transported to the ports were barred to other traffic. When Gomez died in 1935, oil workers cut the barbed wire surrounding the camps and proclaimed a strike. The following years were dangerously explosive.

The fall of the Romulo Gallegos government in 1948 ended three years of reform. The victorious military brass rapidly cut state participation in the petroleum extracted by cartel affiliates. Tax cuts in 1954 afforded Standard Oil $300 million in additional profits. A U.S. businessman had said in Caracas in 1953: "Here you have freedom to do what you like with your money; for me, this freedom is worth more than all political and civil freedoms put together."28 When dictator Marcos Perez Jimenez was overthrown in 1958, Venezuela was one huge oil well, surrounded by jails and torture chambers and importing everything from the United States: cars, refrigerators, condensed milk, eggs, lettuce, laws, and decrees. In 1957, the biggest of Rockefeller's enterprises, Creole, had declared profits equaling almost half its total investment. The ruling revolutionary junta raised the tax on its profits from 26 percent to 45 percent; in reprisal the cartel promptly lowered the price of Venezuelan petroleum and began to fire workers en masse. The price fell so low that despite the tax raise and increased oil exports, the state collected $60 million less in 1958 than in the previous year.

The governments that followed did not nationalize the oil industry, but neither did they grant new oil-extracting concessions to foreign companies until 1970. Meanwhile, the cartel speeded production from its Near Eastern and Canadian deposits; in Venezuela, prospecting for new wells virtually ceased and export was paralyzed. The policy of denying new concessions only made sense if the state [186] petroleum corporation would fill the breach; but the corporation has only drilled a few wells here and there, confirming that it has no other function than that stated by President Romulo Betancourt: "Not to achieve the dimension of a major enterprise, but to serve as intermediary for negotiations on the new concession formula." The new formula was proclaimed several times but never put into practice. In 1970, under the Christian Democratic regime of Rafael Cal-dera, progress was said to be well advanced toward signing "service contracts" under which the companies would explore and exploit 250,000 hectares in partnership with the state. Another form of fig-leaved imperialism, the mixed-enterprise system, had previously been used to deliver most of the petro-chemical industry -- synthetic rubber, polyethylene, ammonia, urea -- to Union Carbide and a Standard Oil subsidiary.

The industrializing thrust that has taken shape and strength during the past two decades shows visible symptoms of exhaustion, of an impotence that is all too familiar in Latin America: the internal market, limited by the poverty of the masses, cannot sustain the development of manufactures beyond certain limits. At the same time, agrarian reform, initiated by the Accion Democratica administration, has traveled less than half of the road its creators promised to traverse.

Salvador Garmendia, the novelist who reinvented the prefabricated hell of this whole conquest culture, the culture of petroleum, wrote to me in the middle of 1969:

Have you seen the apparatus that extracts crude petroleum? It looks like a big black bird whose sharp-pointed head rises and falls heavily day and night without stopping for a second: it is the only vulture that doesn't eat shit. What do we do when the characteristic sound of the sipper tells us there isn't any more oil? The grotesque overture is already beginning to be heard over Lake Maracaibo, where fabulous communities grew up overnight, with movies, supermarkets, dance halls, a profusion of whorehouses and gambling dens -- where money had no value. I recently made a trip through there and felt claws in my stomach. The smell of death and decay overpowers the smell of oil. The towns are semi-deserted, wormeaten, ulcerated, the streets deep in mud, the stores dilapidated. One of the companies' old divers goes down every day with a saw to cut lengths of abandoned pipeline which [187] he sells as old iron. People are beginning to talk about the "companies" as if conjuring up a golden fable. They live like acrobats on a tightrope of myths about the old days, when fortunes were squandered on a turn of the dice or a week-long drinking orgy. Meanwhile, the pumps continue bobbing up and down and the rain of dollars falls on Miraflores, the government palace, to be turned into superhighways and other cement monsters. Seventy percent of the country lives a totally marginal existence. In the cities an unconcerned, well-paid middle class stuffs itself with useless objects and makes a strident cult of imbecility and bad taste. The government recently announced with great fanfare that it had exterminated illiteracy. Sequel: in the recent electoral fiesta the registration lists showed a million illiterates between eighteen and fifty years of age.

1. Philip Courtney, paper presented to the Second International Congress on Savings and Investment, Brussels, 1959.

2. Parliamentary Investigation Commission report of the sale of Brazilian land to physically or juridically foreign persons, Brasilia, June 3, 1968.

3. Correio da Manha (Rio de Janeiro), January 30, 1968.

4. Quoted in Emilio Romero, Historia economica del Peru (Buenos Aires, 1949).

5. Oscar Berrmidez, Historia del salitre desde sus origenes hasta la Guerra del Pacifico (Santiago de Chile, 1963).

6. Hernan Ramirez Necochea, Balmaceda y la contrarrevolucion de 1891 (Santiago de Chile, 1969).

7. Sergio Almaraz Paz, El poder y la caida: el estano en la historia de Bolivia (La Paz/Cochabamba, 1967).

8. Almaraz Paz, Requiem para una republica (La Paz, 1969).

9. "Immovable Mountains," Fortune, April 1965, p. 63,

10. Quoted in Mario Pedrosa, A opcao brasileira (Rio de Janeiro, 1966).

11. New York Times, April 3, 1964.

12. According to the daily O estado de Sao Paulo, May 4, 1964.

13. Eugene Methvin in Selecciones del Reader's Digest, December 1966.

14. According to data published by the Organization of Petroleum Exporting Countries and quoted in Francisco Mieres, El petroleo y la problematica estructural venezolana (Caracas, 1969).

15. Harvey O'Connor, World Crisis in Oil (New York: Monthly Review Press, 1962), p. 112.

16. Jesus Silva Herzog, Historia de la expropiacidn de las empresas petroleras (Mexico, 1964).

17. See Conjuntura economica (Rio de Janeiro), no. 9, 1970, for a list of the fifty biggest enterprises; Petrobras heads the list.

18. Correio da Manha, February 19,1967, published a long excerpt from the report.

19. Statement by Marcio Leite Cesarino, an engineer, in Correio da Manha, January 28, 1967.

20. O'Connor, World Crisis in Oil, p. 172.

21. Rene Zavaleta Mercado, Bolivia: el desarrollo de la conciencia nacional (Montevideo, 1967).

22. Quoted in Guarania (Buenos Aires), November 1934.

23. NACLA Newsletter (New York), February 1969. The Newsletter published a photostat of this letter, taken from the Truman Library.

24. Marcelo Quiroga Santa Cruz, quoted in Revista juridica (Cochabamba), special edition, 1967.

25. See Richard N. Goodwin, "Letter from Peru," New Yorker, May 17, 1969.

26. Time (Latin American edition), September 11, 1953.

Additional Bibliography for Chapter 3

Alameda Ospina, Raul. Esquina (Bogota), 1968.

Alves, Hermano. "Aerofotogrametria." Correio da Manha (Rio de Janeiro), June 8, 1967.

Araujo, Orlando. Operation Puerto Rico sobre Venezuela. Caracas, 1967.

Baran, Paul A. and Sweezy, Paul M. Monopoly Capital. New York: Monthly Review Press, 1966.

Brito, Federico. Venezuela sigh XX. Havana, 1967.

Cademartori, Jose. La economia chilena. Santiago de Chile, 1968.

Duarte Pereira, Osny. Ferro e independencia: um desafio a dignidade national. Rio de Janeiro, 1967.

ECLA. Economic Survey of Latin America 1969. New York/Santiago de Chile, 1970.

Falcon Urbano, M. A. Desarrollo e industrialization de Venezuela. Caracas, 1969.

Geyer, Georgie Anne. "Seized U.S. Oil Firm Made Napalm." New York Post, April 7, 1969.

Julien, Claude. America's Empire. New York: Pantheon, 1971.

Krehm, William. Democracia y tiranias en el Caribe. Buenos Aires, 1959.

Lieuwen, Edwin. The United States and the Challenge to the Security of Latin America. Columbus: Ohio State University Press, 1966.

Magdoff, Harry. The Age of Imperialism. New York: Monthly Review Press, 1969.

Maza Zavala, D. F.; de la Plaza, Salvador; Mejia, Pedro Esteban; and Montiel Ortega, Leonardo. Perfiles de la economia venezolana. Caracas, 1964.

Mariategui, Jose Carlos. Seven Interpretive Essays on the Peruvian Reality. Austin and London: The University of Texas Press, 1971.

O'Connor, Harvey. The Empire of Oil. New York: Monthly Review Press, 1955.

Quintero, Rodolfo. La cultura del petroleo. Caracas, 1968.

Ramirez Necochea, Hernan. Historia del imperialismo en Chile. Santiago de Chile, 1960.

Rangel, Domingo Alberto. El proceso del capitalismo contempordneo en Venezuela. Caracas, 1968.

Reno, Philip. "Aluminum Profits and Caribbean People." Monthly Review, October 1963.

---------. The Ordeal of British Guiana. New York: Monthly Review Press, 1964.

Samhaber, Ernst. Sudamerica, biografia de un continente. Buenos Aires, 1946.

Schilling, Paulo R. Brasil para extranjeros. Montevideo, 1966.

Siekman, Philip. "When Executives Turn evolutionaries." Fortune, July 1964.

Stacchini, Jose. Mobilizaqdo de auddeia. Sao Paulo, 1965.

Suttie, R. I. "Copper Substitution." In Finance and Development. Washington, D.C.: International Bank for Reconstruction and Development, June 1969.

Tanzer, Michael. The Political Economy of International Oil and the Underdeveloped Countries. Boston: Beacon Press, 1969.

Trias, Vivian. Imperialismo y petroleo en el Uruguay. Montevideo, 1963.

Uslar Pietri, Arturo. "Tiene un porvenir la juventud venezolana?" Cuadernos Americanos (Mexico), March-April 1968.

Vera, Mario and Catalan, Elmo. La encrucijada del cobre. Santiago de Chile, 1965.