1939: Uruguay

Uruguay became the focal point of active concern with the European War in the Western Hemisphere when the battle between the German pocket battleship Admiral Graf Spee and three British cruisers took place Dec. 13 in the estuary of the Plata River, well within the 300-mile neutrality belt set up by the Panama Conference (see PANAMA for the Declaration of Panama, and the joint protest against its violation). In accord with the Hague Convention of 1907, Uruguay ordered the Graf Spee to leave the port of Montevideo, where it had taken refuge, which resulted in its being scuttled. Its crew was interned in Argentina. Because of its assistance to the Admiral Graf Spee, the German freighter Tacoma, as an auxiliary naval vessel, was interned by Uruguay. To prevent the repetition of this situation, Uruguay and Argentina are considering legislation similar to Brazil's neutrality law, which provides for the immediate internment of any belligerent warship seeking refuge in a neutral port. (See also INTERNATIONAL LAW.)

It was Uruguay's initiative which gave rise to the Argentine proposal and united Latin-American demand that Russia be expelled from the League of Nations because of its invasion of Finland. Fear of communist agitation at home has possibly motivated the expulsion proposal, in part at least. The League of Nations has steadily lost ground and membership in South America. Chile, Peru and Venezuela have filed formal notice of withdrawal; and in December the Uruguayan Senate voted a bill to resign, which had been introduced before the Russian incident arose. The League's subsequent project of effective aid to Finland has modified anti-League sentiment in Uruguay, and late in December the Republic sent a cable to Geneva pledging Uruguayan support of this move. If Uruguay should resign, its retirement would leave only Argentina, Bolivia, Colombia and Ecuador as member-states of the League in South America.

Informal talks between the United States and Uruguay regarding a reciprocal trade treaty began on Nov. 16, but were suspended, together with the Argentine negotiations, early in 1940. It was thought that the outbreak of the war in Europe might provide Uruguay a chance to extricate herself from her barter arrangements with the totalitarian states. On the other hand, she is committed to a policy of bilateralism and rigid trade control, which accounts for the heavy discrimination against North American goods resulting from higher exchange rates and higher customs duties. Here, as in Argentina, the chief products for export are in direct competition with products of the United States. A further obstacle to a multilateral trade treaty is the loss of Government revenue from exchange control arrangements that would result. Through these arrangements the Government derives, on an average, a 25 per cent profit on all import trade. Exchange control has meant, since November 1937, a surcharge of 40 to 50 per cent on all imports from the United States, a situation corrected, in part, by the grant in December of a fund to free a certain portion of North American imports from this adverse discrimination. Uruguayan trade figures show that 42 per cent of the country's trade has been with the European belligerents and only 6.75 per cent of it with the United States.

An International Congress of American Democracies in Montevideo in March was short-lived, owing to severe local police restrictions. Ten out of the twenty-one American republics were represented, but principally by political 'outs' (all of Peru's delegates were 'Apristas'). Plans were made to organize anti-Fascist groups in each republic. Resolutions were passed in favor of equal rights for women and of unrestricted liberty of action for all labor movements. The Congress went on record as approving a declaration of democratic faith and solidarity.

Delegates of six South American republics met in Montevideo on July 18 to celebrate the signing in 1889 of the Treaty of Montevideo, in which was codified Pan-American international law; and to revise that pact, particularly with respect to copyright and the right of asylum. Final action on the proposed modifications is to be taken in February 1940.