1938: Peru

Pan-American Conference at Lima.

The Eighth Pan-American Conference held its sessions in Lima on Dec. 9-27. The three main objectives set for the Conference by Secretary Hull were: (1) an affirmation of American solidarity in the face of the present world situation; (2) the perfection of consultative machinery provided for in the Buenos Aires peace treaties of two years ago; (3) an economic program designed to increase rather than restrict world trade.

Two important declarations and a trade resolution, unanimously adopted by the twenty-one American republics, constituted the achievement of these objectives. The first was realized in the Declaration of Lima, which reaffirmed continental solidarity resting on the spiritual unity of the peoples of America, and promised consultation in case any American nation should be threatened by foreign intervention or activity. Unanimous acceptance of the solidarity declaration was secured after Argentina, opposed to the original Hull proposal, was permitted to re-phrase it. An eight-point peace program, embodied in the Declaration of American Principles, provided adherence to Secretary Hull's second objective. The unanimous adoption of a trade resolution, favoring the reduction of barriers to international commerce as the basis for world reconstruction, and endorsing the negotiation of trade agreements embodying the principle of equality of treatment, brought fulfillment of the third.

In all, 110 resolutions, declarations and recommendations were adopted, by incorporation in a final act, covering a wide range of subjects of varying significance. The menace of totalitarianism was recognized in the unanimous agreement to recommend to all Latin American governments legislation denying special rights to minority groups or the exercise by foreigners of political rights conferred by countries of their origin, and in a declaration denouncing racial or religious persecution.

Important matters not acted on were the question of foreign property rights, the most pressing problem in United States-Latin American relations; the Cuban proposal of an offer of mediation in the civil war in Spain; the perfection and coordination of the eight existing inter-American peace treaties and conventions; and the proposal, sponsored by Colombia and the Dominican Republic, for an American League of Nations.

The Declarations of Solidarity and of American Principles have been interpreted in Europe, and in some American countries, as a Pan-American collective security pact, as well as a sort of multilateral Monroe Doctrine. They are a long way, however, from the inter-American military and naval alliance proposed early in the year by an important South American government, later officially denied, or from the Western Hemisphere defense aspirations accredited to President Roosevelt, following the Munich agreement and his warning of the threat of the totalitarian states to the democratic governments of this hemisphere. It is certain that the propaganda pressures of the Fascist countries of Europe were intensified during the Conference, and German and Italian radio and press criticisms were launched against the United States.

Fascist Propaganda.

The charges of censorship of official mail and of intimidation of the press during the Conference, brought against the Benavides government by a correspondent of The New York Times, indicate the dictatorial, if not Fascist tendencies of the present government of Peru. More to be feared than actual aggression from Europe is the growth of indigenous Nazi and Fascist movements within the Latin American countries, the ideological conversion of these countries to totalitarianism (see BRAZIL), following in the wake of foreign-promoted propaganda and German, Italian and Japanese commercial penetration. Italian influence is more powerful than German, in this west coast country, and the director of the Banco Italiano has been called 'the Viceroy of Peru.' The Italian propaganda bureau in Lima is the center for the spread of Fascism to Ecuador, Colombia and Chile.

Trade Practices.

A high-pressure campaign in the west coast countries, by both Fascists and Nazis, is to be expected, since the industrial materials so badly needed by Italy and Germany are found in this portion of the South American continent. The details of these propaganda methods, here and elsewhere in Latin America, are too numerous to be covered in this brief summary. In fact, the propaganda activities must never be dissociated from the pressure for trade expansion, on a bilateral and usually barter basis (see URUGUAY), which seriously threatens and hampers United States trade with South America, and is contrary to the Hull program for a multilateral system of trade and reciprocal agreements of the most-favored-nation type. In this, as well as along political and cultural lines, Germany is the most aggressive officially. So disorganizing to American commerce have been Germany's ruthless trade practices, that the United States Treasury is studying cooperative efforts between it and the Treasuries of South and Central American countries to promote trade relations and make available adequate exchange facilities. Germany continued to show trade gains in Peru in 1938. The country's foreign trade, on the whole, showed an adverse balance for the first quarter of the year.

Finance.

The budget for 1938 was the largest ever recorded, contemplating a balance of revenues and expenditures at 165,545,739 soles, or 8 per cent over the budget for the preceding year. Depreciation of the sol has led to a proposal for the reduction of the Peruvian foreign debt of approximately $85,000,000, on which Peru will resume service if reduction is accepted by the bondholders. 'The postponement of the fulfillment of Peru's loan obligations is a genuine right,' the Minister of Finance has declared. 'Depreciation of the currency must be taken into consideration, for 160,000,000 soles used to represent £16,000,000 and now stand for but £8,000,000. . . . To maintain the economic respectability of the State is a fundamental point and the first thing to do is to consider the modification of actual contracts in harmony with the economic capacity of the Treasury. The State's dilemma is evident. The Treasury has to meet two obligations: to solve the problem of unemployment and to meet the service on foreign obligations.' To prevent unemployment it has been found necessary to maintain 60,000 men on public works projects.

Political Situation.

The strict censorship exercised by the Benavides government may account, in part, for the scarcity of political news from Peru during 1938. Moreover, there have been no electoral contests nor governmental changes of importance to report. The leader of the revolutionary Aprista party, Victor Haya de la Torre, is still in hiding, and hundreds of Apristas are held in Peruvian prisons. An attempt to seize a cavalry barracks in the north was reported in October.

For Eighth Pan-American Conference see also PAN-AMERICAN UNION; for boundary dispute see also ECUADOR.