EL SALVADOR: No Loans

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Swarthy peons, white-suited coffee planters and their families swarmed into San Salvador one day last week to celebrate Independence Day, 116th anniversary of the little nation's liberation from Spain. Crowning the day's ceremonies was the bestowal by the Chamber of Deputies on the curly head of El Salvador's Dictator, President General Maximiliano Hernández Martínez, the high-sounding title, "Benefactor of the Nation."

Little El Salvador is admittedly hard up for money, so Benefactor Martínez is hailed by virtually all 1,600,000 Salvadorians for his tightfisted economies during his six-year regime. He led off with a martyrlike 50% slash in his salary, has closed some foreign consulates temporarily, quit, the League of Nations in the struggle to balance the budget (TIME, Aug. 23). With coffee about 80% of her exports, agricultural El Salvador depends for its revenues on a favorable foreign trade balance. Chief coffee customer is Germany. While crying for cash, El Salvador has instead been stuffed with German hardware, cotton textiles through the bludgeoning barter methods of Reichs-banker Schacht. No gold has been coming in to pay off the $18,000,000 external debt hanging over her head. To El Salvador, whose yearly revenue is $7,000,000, this looks mountainous.

Last week in the Assembly, Salvadorians fervently unveiled an engraved plate bearing the new financial doctrine of the little nation. It was an excerpt from Martínez' last speech to Congress: "I propose as the keystone of the nation's policy that it never contract a new loan.''