The Voice of Hirakocha

Broad-shouldered, stolid General Enrique Penaranda del Castillo, President of Bolivia, last week led off a parade of foreign chiefs of state on the Roosevelt guest list.* He met his host on the south lawn of the White House, that evening was guest of honor at a state dinner.

What the President of the U.S. said to the President of Bolivia that evening paved the way for a Rooseveltian crack at the Coolidge era. Two days later at his press conference Mr. Roosevelt said happily that he had apologized for something that happened around 1926 or 1927.

Gold Bonds. Certain Americans, said Mr. Roosevelt, persuaded the Bolivians that they needed a lot of money. This was news to the Bolivians, but the Americans were convincing salesmen; a bond issue was floated. Interest was set at 8%, and an 8% commission was deducted by the salesmen. Of course, said the President, Bolivia was unable to pay either the interest or the principal. With obvious relish Mr. Roosevelt declared that the U.S. would never lend money that way again if he had anything to do with it.

The only Bolivian bond issue in 1926 or 1927 which newsmen could uncover was a $14,000,000 issue of 7% gold bonds offered by Dillon, Read & Co. at 98 1/2. A member of the firm then: James V. Forrestal now Under Secretary of the Navy.

The President's Good Neighborly propaganda was also embarrassing to Joseph C. Rovensky, No. 2 man of the Rockefeller Committee, who will soon resign to return to his old job as a Chase Bank vice president. Fortnight ago Rovensky suggested the huge dollar balances in Latin America be used to redeem defaulted bonds. The Bolivian loan has been in default since 1931. Financiers pointed to that fact as justification for the 7% rate.

"Where will she fight?" they asked. But in the neighboring capitals of Peru and Chile there was a certain uneasiness. Peruvian imperialists and rightist Chileans sensed in General Penaranda's Washington visit a bid for a Bolivian port on the Pacific (Arica on Chile's northern boundary). They recalled the poetic prayer addressed to Vice President Wallace during his recent visit by the La Paz daily Ultima Hora: "Oh, Henry Wallace, Prophet and Redeemer, Philosopher and friend of man . . . the oldest country of the South now hears the voice of Hirakocha, the God of the Andes: 'People of the mountains, look to the Ocean.... If the Ocean does not come to reach you, you should go and seek it.' "

* Czecho-SIovakia's Eduard Benes is due this week, President Edwin Barclay and President-elect William V. S. Tubman of Liberia late this month.

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