Help for Commodities

Latin American nations last week got a promise of U.S. aid for the economy-bruising slump in the prices of the commodities they sell. Secretary of State Dulles, in a Pan American Day speech, made it clear that the U.S. was fully aware of its Hemisphere neighbors' troubles, and was now prepared to reverse the long standing policy of staying out of international parleys designed to support or stabilize prices.

The switch came just as many of Latin America's one-product countries reached peaks of discontent. Item: Chile's President Carlos Ibanez, already badly upset over the low price of his country's all-important copper, last week canceled his scheduled state visit to President Eisenhower after Secretary of the Interior Fred Seaton proposed to restore the long-suspended U.S. copper tariff.

The Terms of Trade. In volume, trade with Latin America, the U.S.'s biggest supplier and biggest market, is slightly up. What pinches is a 15% slide in the terms-of-trade index from its 1954 peak. Coffee now brings 53 1/2-c- per lb., down from 70-c- in 1954; refined copper trembles at 25-c- per lb., down from 43-c- in 1955; lead, zinc, tin, wool, hides, wheat and cocoa have all slipped. But such U.S. exports as cars, machinery and structural steel cost as much or more than ever.

Coffee, the biggest item, is the victim of a growing surplus that Latin American producing nations are fighting by buying up millions of bags and withholding them from the market. The double cost: printing-press inflation to pay the bills, lower dollar income because of the unsold coffee. Brazil's sober O Estado de Sao Paulo mourned that "even a frost of catastrophic proportions would not solve Brazil's coffee problems." In the same gloomy key, a Uruguayan wool exporter said: "Only another Korean war could save us."

Improvise & Stabilize. To make up dollar losses, Latin American nations are improvising desperately. Responding to Red smiles, Chile is exporting copper wire to Communist China, and Colombia is considering sending coffee to the U.S.S.R. in hopes that Russians can be lured away from tea. Imports from the U.S. are being cut back. But everywhere the demand is growing for U.S. help, specifically for price floors.

Of that idea, the State Department's Inter-American Affairs chief, Roy Richard Rubottom Jr., says "unwieldy and unworkable." Nor did Dulles mention specific solutions, but Washington heard talk of such stabilizing devices as export and import quotas, buffer stocks, revolving funds to buy up surplus commodities, production controls. More ideas seem likely to be a major result of Vice President Nixon's trip through South America, scheduled to start next week.

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