1940: Pan-American Cooperation

Since war started in Europe, Pan-American relations have attained new closeness through the two meetings of the foreign ministers of the twenty-one republics at Panama in September 1939, and at Havana, July 21-30, 1940, through the activities of several agencies created at these meetings, and through other happenings, unilateral, joint or collective, in the Western Hemisphere. The Panama conference set up an Inter-American Neutrality Committee and an Inter-American Financial and Economic Advisory Committee, both of which have been at work during the year.

Conference at Havana, Cuba.

The second meeting of American foreign ministers took further tangible steps towards hemisphere solidarity and seems at last to have turned the Monroe Doctrine into a Pan-American instrument of policy. Throughout the meetings there was unprecedented recognition of common danger and, by evidence of continuing consultation, of a determination to act jointly for preserving and strengthening the system of continental unity and solidarity. Formal agreements were reached regarding the possible transfer of sovereignty over certain islands and regions from one non-American state to another, the threat of subversive activities in the Americas from outside, and the extremely grave economic difficulties and dislocations resulting from the war. The chief document that emerged was the Act of Havana which dealt with the transfer of territories in the Western Hemisphere as a pressing matter; it created an Inter-American Commission on Territorial Administration, with an emergency committee to be set up as soon as two-thirds of the states had ratified the agreement and to function until the entire commission could be appointed — the emergency committee accordingly was created on October 24 — and ultimately to consist of one representative from each American republic. This Act of Havana, on the provisional and permanent administration of European colonies and possessions in America, provides not only general principles for such an actual event, but enumerates a series of nineteen rules to be followed in securing a completely successful administration of such territories by one or more American states. The rules guarantee the interests of the inhabitants, freedom of religion, widespread education, abolition of forced labor, and the right of self-determination after a period of not more than ten years of tutelage. An important feature in the action to be taken by the Emergency Committee, and by the Permanent Commission when it is constituted, is the use throughout of the two-thirds rule, instead of the usual unanimity, for all ratifications, quorums and decisions; thus a small minority is prevented from blocking common action as too frequently has happened in past international organization. The Act was ratified by the United States Senate on Sept. 27.

An economic accord adopted by the conference pledged the states to adhere to liberal principles of international trade and to make immediate efforts for dealing adequately with commodity surpluses. The gathering also extended the duties of the Inter-American Financial and Economic Advisory Committee by requesting it to propose credit and other means of assistance in the economic and financial fields. Other resolutions concerned reciprocal aid and cooperation for defense, measures against activities directed from abroad contrary to domestic institutions and American democratic ideals, the preventing of political activities by foreign diplomatic and consular agents, and a request that the Pan-American Union convoke an international conference to consider co-ordinated police and legal measures for defending the society and institutions of each American state. A further resolution approved the completion of a transcontinental railroad across Bolivia from Santos, Brazil, to Arica, Chile, in order to develop the entire eastern part of landlocked Bolivia and to provide a new means of transportation for the neighboring states, as well as to make possible, in case of war, joint defensive action against invasion from either ocean. (See also CUBA.)

Inter-American Neutrality Committee.

The Inter-American Neutrality Committee of seven, under the chairmanship of Dr. Leopoldo Mello of Brazil, was organized on Jan. 15 for the duration of the war and has been meeting in Rio de Janeiro during the year. Its main objective is to keep the European war as far as possible from American shores and, more specifically, to adopt rulings on all matters affecting the neutrality and relations of the American states with European belligerents and neutrals. Thus it has concerned itself largely with enforcing the Pan-American security zone. Several protests were sent to Great Britain and to Germany against violating the zone. On April 27 the committee announced completion of a draft resolution regarding this zone, to be submitted to the Pan-American Union. Its recommendations to the second meeting of foreign ministers related to internment, the treatment of submarines and vessels used as auxiliary transports of warships in American waters, the inviolability of postal correspondence, telecommunications, and the security zone. At Havana it was requested to draft a convention to deal with the juridical effect of the zone and the measures of economic cooperation which the American republics are ready to adopt to make the zone respected. Another convention that it is expected to draft for American signature and ratification will embody the principles and rules of neutrality generally recognized in international law and especially those contained in the resolutions of the Panama Conference, in the legislation of American states, and in its own recommendations. The committee meets whenever 'the lofty interests of the Continent so require.'

Inter-American Financial and Economic Advisory Committee.

The general purpose of the Inter-American Financial and Economic Advisory Committee is to study and aid the production of, and trade in, new, non-competitive products within the Americas. It was organized during January, when it recommended the creation of a permanent commission of five in charge of promoting the development in Latin America of new industries that will not compete with those in the United States and thus will add to inter-American trade. This auxiliary commission, consisting of representatives of the United States, Brazil, Costa Rica and Chile, and of the Westinghouse Electric International Company of New York, met first in Washington on June 3 and, aided by experts from various United States' departments, set to work on a thorough study preparatory to recommending to American governments enterprises connected with undeveloped mineral resources, farm and forest products, and new industrial plants. It will also assist in forming a committee of experts in each republic for cooperation with this program. Financial help will be sought by requesting governments to urge the aid of private credit and investment organizations. The commission decided to start its experiments by building a model manioc-processing plant in Brazil — manioc is the source of tapioca starch, used in making certain kinds of industrial paper and textiles, and coming hitherto chiefly from Java — and by promoting various handicraft industries in other Latin American countries. In October the Advisory Committee was occupied with the problem of coffee surpluses.

Pursuant to a recommendation of the Inter-American Financial and Economic Advisory Committee of Feb. 7, the diplomatic representatives of Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, Mexico, Nicaragua, Paraguay, and the United States, signed at Washington in May a convention, open to all American states, for establishing an Inter-American Bank as of major importance in developing financial and economic cooperation among them. This project has resulted from months of intensive work by the Committee and is the outcome of many years of discussing the desirability of creating such an institution. It adds to the insufficient machinery of American cooperation and will without question implement economic and financial measures in the Western Hemisphere. After five states have deposited their ratifications the bank will open operations in Washington, subject to sufficient financial subscription and receiving a charter from Congress. Its capitalization will be $100,000,000, with shares valued at $100,000 each, to be subscribed by the governments in proportion to the value of the total foreign trade of each country. Any country may invest more than its minimum allotment, thus increasing its voting power, but no one member will be permitted to hold more than fifty per cent of all other outstanding votes; a four-fifths' majority of outstanding shares will be required for all decisions. Thus the United States can neither completely control the bank nor be at a twenty-to-one disadvantage in the voting.

Inter-American Military Cooperation.

Defense other than economic has also received attention. After the United States had acquired on Sept. 2 the right from Great Britain to lease naval and air bases in various British possessions in the Western Hemisphere, it began to sound out the Latin American republics regarding establishment of local naval, land and air bases to be used by the armed forces of any American country. In his broadcast of October 12 to the Western Hemisphere, President Roosevelt emphasized that the defense of both oceans 'against acts of aggression is the first factor in the defense and protection of our own territory and integrity' and that 'we will continue to help those who resist aggression, and who now hold the aggressors far from our shores.' Earlier, in September, a United States military mission, after investigating the defense problems of Costa Rica, had gone on to make similar surveys in other countries of Central America. During September and October two groups of military officers from all the Latin American countries made a tour of United States' defenses and military and industrial centers. It was expected that, in addition to laying the foundations for inter-American military cooperation, a series of military understandings might result from these contacts; and, by the middle of December, agreements had been made between the United States and eight other American states — Argentina. Brazil, Chile, Colombia, Ecuador, Guatemala, Haiti and Peru — by which military, naval or aviation missions are to advise the defense forces of those countries. A defensive agreement between Uruguay and Argentina in December raised discussion in regard to the whole position of Uruguay in connection with neighboring countries and with the existing arrangements between it and the United States. The Permanent Joint Board for Defense, United States and Canada, established in August, creates the unusual situation of a British Dominion within the orbit of the Western Hemisphere, as well as an agreement between a neutral and a belligerent. It bears witness to the two countries' increasingly close economic and political relations in recent years and recalls President Roosevelt's guarantee two years ago of Canadian territorial integrity.

Economic and Financial Cooperation.

The war has brought tremendous economic difficulties in Latin America which will have to be solved if cooperation for defense is to succeed. Among the American states themselves increased trade meets both economic and financial obstacles. Trade among the Latin American republics is relatively small — less than eight per cent of the total. While the United States has been the largest single importer of their products, the European market was almost twice as large, with Great Britain and Germany the principal buyers. Of the two areas, the Caribbean and the rest of South America, European trade is far less important than that of the United States in the Caribbean and much more so to the south. The products of the United States and of the Caribbean countries are not competitive, being tropical on the one hand and manufactured articles on the other; but the opposite holds for the United States and the rest of Latin America because their raw material exports compete with those from the United States and they have in the past bought manufactures largely from England and Germany. Since the war began, Latin American surpluses have accumulated to a much greater extent than the United States is able to absorb, particularly without further Latin American purchases, which they have not the financial resources to make. Finance also enters through lack of native capital and consequent need for foreign investments. The United States has supplied more capital for developing Latin American resources than has any other country, with Great Britain a fairly close second. Through defaults and expropriations in some parts of Latin American private capital is no longer readily available, and European investments are stopped by the war. The solution of both the economic and financial difficulties not only rests upon the United States, but will inevitably determine the effective solidarity of the Americas against totalitarian invasion.

Apart from inter-American attempts to lessen the obstacles to increased trade between Latin America and the United States, the latter country took a hand in providing financial aid for economic defense of this hemisphere both as to purchases and as to loans. Owing to extensive defaults on debts and expropriations of foreign property, the Latin American countries do not offer favorable fields for private investments; hence their need for capital to develop trade must to a large extent be supplied by the government of the United States. To this end President Roosevelt on June 21 announced a broad plan for creating an 'appropriate inter-American organization for dealing with certain basic problems of their trade relations, including an effective system of joint marketing of the important staple exports of the American republics' and at the same time he stated the Administration's intention of using existing agencies promptly in dealing with the immediate problems of some of those countries. Although no new cartel arrangement has resulted, Congress on September 20 acted to increase by $1,500,000,000 the lending authority of the Reconstruction Finance Corporation; of this two thirds go for acquisition of strategic materials and assistance to national defense industries, while the remaining $500,000,000 is allotted to the Export-Import Bank for 'the development of the resources, the stabilization of the economies, and the orderly marketing of the products of the countries of the Western Hemisphere.' Out of this sum the Bank on September 26 accorded a credit of $20,000,000 to Brazil for aid in constructing a steel mill and a further $25,000,000 to be available to the Bank of Brazil for facilitating purchases from the United States. A smaller credit was granted to Costa Rica. On December 8 was announced a credit of $10,000,000 to the Central Reserve Bank of Peru to cover purchases. Other similar grants had been made by the Bank during May — $11,500,000 to Ecuador, $10,000,000 to Colombia, and $12,000,000 to Chile. During the month of October economic activities were many: a Brazilian trade mission came to the United States after a tour of South America in search of new markets; representatives of the United States Department of Agriculture visited Central America looking into the possibilities of rubber-growing in that area; the president of the Export-Import Bank, Mr. Warren Lee Pearson, traveled through South America investigating possible loans from the bank; and Brazil and Argentina entered into a trade pact to assist both countries in disposing of their surplus products that have accumulated owing to the war, such as Argentine wheat and Brazilian coffee, cocoa and rubber, while a similar agreement between Argentina and Chile was reported to be in prospect. In the United States the Council of National Defense has established, subordinate to it, an Office for Coordination of Commercial and Cultural Relations between the American Republics (Mr. Nelson A. Rockefeller has been appointed Coordinator, responsible to the President), which is to serve as a clearing agency for the governmental and private agencies concerned with Pan American affairs. The Metals Reserve Company, a subsidiary of the Reconstruction Finance Corporation, arranged in October to build or finance a large tin smelter in Bolivia for producing annually about 18,000 tons of pig iron, which has hitherto gone to Western Europe for smelting. The same company has increased the purchase of manganese from Cuba and Brazil.

One of the most important developments on the economic front concerns Argentina, a country with which United States' negotiations for a trade agreement broke down in January, as likewise with Uruguay and Chile, owing to similarity of products and incompatibility of the multilateral trade policy with Argentina's commitments. In September, furthermore, that country placed a temporary ban on imports from the United States in order to remedy its unfavorable balance of trade with the United States and its acute shortage of dollar exchange. Prospects for better trade relations were greatly improved through the loan of $50,000,000, from the Treasury's stabilization fund, for stabilizing Argentine currency and the credit of $60,000,000 from the Export-Import Bank for purchases in the United States — both the results of a visit to Washington, in November, of an Argentine financial mission. At the same time Cuba and Uruguay are negotiating loans from the United States.

A further step in good relations occurred when the State Department announced on Sept. 7 a treaty with the Dominican Republic ending the United States' control of Dominican customs as guarantee of payments on its external debt. The United States first intervened in that country in 1904; from 1916 to 1924 virtually all of its affairs were under United States control; since 1924, when the marines were withdrawn, a modified system of control of customs has been exercised, and is now to be ended with the agreement upon a new arrangement for guaranteeing the service of the bonds as a first lien upon the total Dominican revenues instead of being a first lien upon only the customs revenues.

Other Good-Neighbor Movements.

Following its offer to the Intergovernmental Committee on Refugees, the Dominican Republic ratified on Feb. 21 the agreement with the Dominican Republic Settlement Association providing for the ultimate settlement there of as many as one hundred thousand nonsectarian refugees. Thirty-seven Jewish refugees landed in May, the advance guard of the first settlement planned for five hundred families, and already several other groups have arrived. Other settlements are to proceed gradually as soon as the success of an independent and self-supporting community is assured. For this immigration project General Rafael Trujillo, former president of the Republic, gave a tract of 26,000 acres, the Sosua reservation, easily suitable for cultivation of many sorts. Intensive study of conditions was necessary to ensure the successful transfer of Europeans to a tropical climate and agricultural labor. Under the arrangements, the Settlement Association plans and promotes the economic life of the settlers; the Republic assumes no financial responsibility but cooperates by waiving all fees and taxes on the property exclusively used for the immigration project, and guarantees the settlers full equality of rights and opportunities. Accounts thus far report satisfaction on all sides. Further projects are being proposed or explored by Uruguay for Spanish refugees and in the Virgin Islands and Alaska for homeless victims of the war.

A Committee of Experts on Nature Protection and Wild Life Preservation in the American Republics prepared in May a convention on that subject, which was opened on October 12 for signature by the American states and is to enter into force after five ratifications have been deposited. The committee, created by the Eighth International Conference of American States, contained representatives from seventeen of the states. The convention provides that the contracting governments shall establish national parks, reserves, monuments and strict wilderness preserves for the protection and preservation of areas of scenic beauty and unusual geological formation, and animal and plant life of aesthetic, historical or scientific interest and value. (See also CONSERVATION.)

There are two new unofficial Pan-American organizations. The American Society of Agricultural Sciences was established at the recommendation of the Eighth Pan-American Conference for the advancement of scientific agriculture throughout the Americas and for the promotion of cooperation, friendship and the exchange of ideas among persons occupied or interested in the agricultural sciences. An Inter-American Bar Association was created during the meetings of the section on International Law, Public Law and Jurisprudence of the Eighth American Scientific Congress in May. The membership is composed of national, state and local bar associations and of national or local professional organizations devoted to specialized branches of the law.

The fiftieth anniversary of the founding of the Pan-American Union was celebrated on April 14 by all the American nations. In Washington the chief event was President Roosevelt's address at a special session of the Governing Board of the Pan-American Union on April 15, which was attended by a large number of diplomats of all countries, United States government officials and other important persons.

Inter-American cultural relations continue to receive increasing attention among the American states. Under the Convention for the Promotion of Inter-American Cultural Relations (1936) the United States sends to each of the thirteen countries that have entered into the agreement a visiting professor and one or more students chosen by them from lists of available persons, and receives a professor and students from each of them. The expenses are borne by the participating governments and the normal term of service is two years. By act of Congress $75,000 is available for the exchange of professors and students. For the academic year beginning in 1940 the United States has awarded travel grants to eighteen students and professors from the other American republics as part of the program to develop closer inter-American relations. In June the City of New York announced to the State Department that free tuition scholarships had been made available for students from Central and South America at the city's four colleges, which would provide free tuition for twenty-five students. Through the Catholic Bureau for Inter-American Collaboration of Pax Romana in Washington fifteen scholarships in United States colleges and universities are being distributed to young women from South America. See also INTERNATIONAL CONFERENCES AND CONGRESSES.