Inter-American solidarity reached a new 'high' during 1941 through the efforts of the United States and of individual nations and groups of American nations towards cooperation for Western Hemisphere defense as built upon peace and understanding among them, and a joint front against totalitarian world order. Developments also took place along political, legal, economic, financial and cultural lines.
Increased Harmony.
Inside Latin America there were new evidences of harmony. Bilateral pacts of non-aggression, or for pacific settlement of disputes, were signed by Bolivia and Chile, Brazil and Venezuela, and Chile and Peru. Ten conventions for improved cultural and trade arrangements between Brazil and Paraguay were signed in June. Long-standing disputes over Latin American boundaries received in April further adjustment in the accords between Argentina and Chile regarding Antarctic claims, between Colombia and Venezuela, and between Costa Rica and Panama; fighting between Ecuador and Peru, however, broke out again on July 6 in their old border disagreement despite the offer of mediation made by the United States, Argentina and Brazil in May. Although a settlement was thought to have been reached after the mediators had brought the parties together in Washington on July 12, fighting was again resumed. By a truce on October 2 a demilitarized zone was established on former Ecuadorean territory, with policing by Ecuador's forces directly responsible to the mediating powers, and both parties agreed to avoid future border clashes. On September 18 Mexico proposed a joint inter-American attempt at settlement, which was received favorably by Peru but opposed by Ecuador. Chief among the efforts towards wider and freer use of the facilities of boundary and interstate rivers in promoting commerce were the various agreements made by the River Plate states: Argentina, Bolivia, Brazil, Paraguay and Uruguay.
On March 31 the convention between the Dominican Republic and the United States went into effect by which the customs receivership was terminated and its functions transferred to the Republic. With Haiti the United States made an executive agreement defining the two countries' financial relationships and safeguarding the holders of Haitian bonds.
Defense Measures.
Pan-American military defense progressed along several lines. By the creation of United States bases in Greenland and Iceland, the Western Hemisphere may be regarded as effectively including these territories. Common efforts between the United States and Canada, as expressed in their agreements during the spring and summer, for joint economic and military defense activities, tend to bring Canada into the Pan-American orbit, as well as to increase participation of the Dominion in American concerns. Action under the Havana Convention of 1940 prohibiting the transfer of American territory to non-American states took place twice: in November, by agreement with the Dutch government-in-exile, the United States set up military forces to protect Dutch Guiana and its bauxite mines, with the cooperation of Brazil; and in December the United States announced a naval accord with French authorities for a continued neutral status in Martinique and other French colonies in the Caribbean.
In addition to acquisition of air and naval bases in British possessions in the Atlantic, including one in British Guiana on the South American mainland, the United States also entered into similar arrangements with Mexico and Panama, in accordance with the mutual-assistance declaration made at the Havana meeting in 1940. In March there was announced a joint program between the United States and Mexico for common defense, to include development of naval bases, airports and railroads, a permanent joint board in Washington, and reciprocal use of these facilities when required. On April 25 their agreement became effective to permit transit of each country's military aircraft over designated routes in territory of the other, and the use of regular landing points upon official notice. Panama likewise permitted the United States to erect defenses outside the Canal limits.
Along with individual programs for national defense in many Latin American states, as in Peru, Brazil, Colombia and Argentina, considerable sums have been appropriated from United States lease-lend funds to aid Pan-American countries in constructing bases, ships, airplanes and guns, including the development of an air and naval base in Brazil. To some countries, like Costa Rica and Nicaragua, large supplies of arms and equipment have been sent, and several groups of officers from these countries have visited the United States for training at the Army War College. In general, while neutral, the United States had active support in military defense measures from Mexico, Cuba and other Central American and Caribbean countries.
Anti-Axis Moves.
Following the recommendation of the Inter-American Financial and Economic Advisory Committee on April 25, and action by the United States, many governments took action against the large number of Axis ships in their ports. Mexico, Cuba, Costa Rica, Venezuela, Peru and Ecuador moved promptly, while the southern countries proceeded more slowly. Most of the ships were simply detained on grounds of public necessity, with indemnification postponed until after the war, but in Mexico such ships were expropriated and added to the merchant marine. Late in August Argentina took over by purchase sixteen Italian vessels. Motives were divided between preventing sabotage and scuttling, and adding to shipping facilities. The Inter-American Financial and Economic Advisory Committee announced on August 28 that representatives of all the states had agreed to put into operation about eighty idle German, Italian and Danish ships, in order to defend hemispheric economy and security.
During the year steps were taken in Peru, Bolivia and Ecuador, as earlier in Colombia, to transfer from Axis ownership and operation practically all airplane routes in those countries. German planes were still operated in Brazil, Argentina and Uruguay, but were almost equalled in mileage by Panair do Brazil, a Pan-American Airway subsidiary. The principal lines, the Condor and the Italian transatlantic Lati line, were deprived by the United States blacklist in July of all gasoline and other supplies from United States companies. Suspension of the Condor's interstate routes (between Buenos Aires and Brazil, Bolivia and Chile), following the entry of American nations into the World War, left that line the only service inside Brazil. Despite this, the report of a Congressional investigating committee on December 19 announced the existence of a network of Axis activity behind Latin American airports and lines. The committee urged rapid completion of negotiations to supplant German and Italian commercial lines in Latin America with American companies.
Some evidence regarding the sympathy of Latin American countries with the aims of the United States is afforded by political moves resulting from increasing awareness of Nazi activities within their borders. In the north strong measures were taken, as by Mexico and Cuba. Colombia, Bolivia, Chile, Panama and Honduras also adopted measures to combat subversive movements; the position of states to the south, particularly of Argentina, was less clear. On the whole, the mass of Latin American people appeared increasingly pro-democratic and anti-totalitarian, while Nazi sympathy made headway only in military and upper-class circles.
Solidarity in War.
When war came between the United States and Japan, Germany, and Italy, in December, 1941, Article XV of the Second Meeting of the Foreign Ministers at Havana in 1940 required positive action. This had declared that any attempt of a non-American state against the integrity or inviolability of an American state should be considered as aggression against all signatory states, to be followed by consultation for concerted measures and negotiation for organized cooperation in defense and assistance. Accordingly, consultation among the states was arranged for a Third Meeting of Foreign Ministers at Rio de Janeiro on January 15, 1942. Individual reaction to Axis aggression upon the United States was expressed in declarations of war by Costs Rica, Cuba, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Nicaragua and Panama. Mexico and Colombia broke off relations with Axis Powers; Brazil, Ecuador and Paraguay declared their solidarity with the United States, and readiness to carry out Pan-American obligations; Brazil and Peru froze Axis funds. The attitude of Argentina was that of 'qualified backing' of the United States, and in keeping with the Uruguayan proposal to the American republics June 21, that they treat as non-belligerent any American republic engaged in war with a non-American state. In spite of earlier reservations to this proposal made by Argentina, Chile, Colombia and Peru, Argentina on December 13 referred to Japan's aggression against the United States as directed against the whole hemisphere, extended to the United States the privileges of non-belligerency although at war against the three Powers, but, declaring its own neutrality toward Germany and Italy, Argentina did not mention the aggression of these two. The grant of non-belligerent rights to the United States and other Latin American states permits their warships and airplanes to use Argentine ports and bases. Uruguay, Bolivia, and Chile announced similar action, and Peru promised all necessary assistance to the United States.
Economic Cooperation.
On the economic and financial front the Pan-American situation became more involved during 1941. The United States as the 'arsenal of democracy' had become the center for preparations to defend itself, the Allies, and the Western Hemisphere in general and in particular. On all counts it had to build up the economic situation of American republics disrupted by wartime loss of markets; trade between them and the United States increased steadily over that of preceding years; yet none of these republics could buy as much from the United States as it purchased from them, because of its own needs and the lack of available transportation; greater and more varied production along old and new lines was developed, and at the same time commerce lagged, since the United States priorities system required withholding strategic materials needed elsewhere, and made a shortage of manufactured articles and machinery, with dire consequences for the republics now dependent upon the United States. On the one hand the United States had to provide the essential materials and equipment for increased Latin American production, and on the other more markets had to be found, either in the United States or among themselves, to replace former European and Asiatic markets. The marketing of exports has always been the prime factor in determining Latin American affiliations, and this still remains of utmost importance since the war declaration. Defense against the Axis became all-important, but it too depended upon supply and sales.
Naturally the American countries responded to the idea of solidarity hemisphere defense through trade, according to their geographical and economic situations. The north was close to the United States, and their products complemented and did not compete with those of the United States; the contrary held for the south; the east coast was concerned with future German plans, and the west coast with Japan. The various countries cooperated by denying raw materials to Axis powers and pledging their production for defense needs; they supplemented United States export controls by their own, some by prohibiting export of all articles under their control, and others by restricting critical defense materials. Some countries were affected by President Roosevelt's order of June 14 which, by freezing all German, Italian and Japanese accounts, blocked the funds of any Latin American firm dealing with Axis interests. A greater curb came on July 17 with the proclamation of a blacklist of 1833 Latin American firms and individuals considered to be acting in the interest of Germany or Italy; and on December 9, with the addition of 470 names of firms with Japanese connections. Thus trade with all Axis-dominated firms in Latin America was cut off by widening the scope of already-existing export and financial controls. While the measures were in general favorably received, hardships occurred in countries where Axis interests controlled key-industries and this created some feeling that future measures relating to the entire hemisphere should be shared by all.
United States Aid.
The chief means adopted by the United States for aid to and support from Latin America were the lease-lend program, the Export-Import Bank, and arrangements with individual countries. General applause followed President Roosevelt's statement on December 15 that under the lease-lend act 'a substantial program of aid to countries of the Western Hemisphere is under way.' The increased lending powers of the Export-Import Bank better enabled it to carry out aid to the southern continent by developing resources, stabilizing economies and orderly marketing of products. Thus, it provided credits to American firms doing business abroad in competition with subsidized European and Japanese products, promoted American trade by loans, helped small importers and exporters, developed supplies necessary to the United States by long-term financing in Latin America, and enabled banks to take care of all sorts of financing. Concretely, it financed highways, a steel mill, railway equipment, rubber plantations, and the rehabilitation of devastated areas. Unlike European governmental credit agencies, it has never in any manner financed the sale of munitions or war implements. During 1941 Nicaragua, Haiti, Costa Rica, San Domingo, Mexico received loans, and the bank now has loans and active commitments of $300,000,000 in Latin America.
Argentina.
With Argentina and Mexico the United States has markedly improved its relations. Competitive production of foodstuffs prevented in 1940 the completion of a reciprocal trade agreement with Argentina; but in October prolonged negotiations resulted in a new trade treaty. As a result of great expansion of commerce between them Argentina had an export surplus to the United States for the first nine months of 1941, and such favorable circumstances promoted the new accord, by which the United States has lowered duties on nearly half its imports from Argentina, such as flaxseed, fresh fruits in season, coarse wool, canned meats and some other foods. In turn it will receive substantial benefits from Argentina on a long list of agricultural and industrial products when Argentina's foreign-exchange situation has improved. While all concessions are subject after the war to modification or termination by the United States on six months' notice, and present shipping and priority difficulties may interfere with its smooth working out, the agreement signifies improved political as well as economic relations. The treaty went into effect November 15. In an agreement of November 27 Argentina undertook to sell to the United States through the Metals Reserve Company its whole production of tungsten for three years, to a maximum of three thousand tons yearly and at a definite price. Thus a strategic material formerly sold largely outside the hemisphere has been reserved for the United States.
Mexico.
With Mexico the United States has steadily improving relations. Besides the military arrangements for exchange of facilities in war, a commercial treaty in July provided that the Mexican exportable surplus of certain strategic materials was made available to the United States and other Western Hemisphere countries for eighteen months. Accordingly, the Metals Reserve Company and the Defense Supplies Corporation will buy at current market price the surplus of a wide variety of defense metals and fibers. The United States agreed to facilitate all shipments to Mexico of raw materials and equipment possible in the present emergency. On November 19 the two governments by formal exchange of notes adopted a settlement of the land and oil expropriations controversy. Mexico will pay $40,000,000, over a period of fourteen years, to settle agrarian claims arising between 1927 and 1940 (of which $3,000,000 has already been received); a Mexican and an American appraiser are within five months to establish the amount of compensation owed to the oil companies for their losses through expropriation, and meanwhile Mexico has made an initial payment of $9,000,000 for the oil properties, which will be returned to it in case no agreement is reached. For its part the United States Treasury will stabilize the Mexican peso by expending up to $40,000,000 from the stabilization fund, and will buy silver from the Mexican Treasury to the total of 6,000,000 ounces monthly at 35 cents an ounce. Thus the United States government has recognized Mexico's sovereign rights in its own jurisdiction, and has enabled it to compensate the oil companies, which earlier rejected the payments offered them and insisted on their claims to the subsoil oil. The Sinclair Company made a settlement of its claims in 1940, and both governments hope that other final adjustments will come. Included in the arrangement are a project for a reciprocal trade pact and for a credit of $30,000,000 over three years from the Export-Import Bank for Mexican road-building, with prospective further loans for financing other projects.
Brazil.
Brazil has also made agreements with the United States and Argentina. On May 14 Brazil promised the United States that for two years it would, through export licenses and other control regulations, confine to the United States the exportation of specified amounts of certain strategic materials. In case private American industries do not purchase all the materials, it was agreed that the Metals and the Rubber Reserve Companies would acquire all the surplus in Brazil at fair prices. In return the United States government will, so far as possible, continue facilitating shipment to Brazil of essential industrial materials of which the export is rigidly controlled. At the end of November Argentina and Brazil agreed by treaty to an eventual customs union 'in progressive form' following removal last April of barriers to their mutual trade. Through especially favorable treatment of each other's products the two largest Latin American countries are trying to promote industrial development by creating a large unified market for their manufactured products, and thus to lessen their dependence on outside markets and, by extending trade to each other, to compensate for lost European sales.
Bolivia.
An economic mission went to Bolivia from the United States in November for a six-months' survey of the needs of that country which, mountainous and inland, lacks transportation facilities and depends upon selling its minerals and buying its food. Before the war Great Britain took all its chief product, tin, but lately the United States has purchased half the tin and much of the other minerals. A loan from the Export-Import Bank is contemplated to aid in road- and railway-building, and in developing cattle-raising and small mining concerns.
Inter-American Coffee Agreement.
On February 3 the Senate ratified the Inter-American Coffee Agreement of November, 1940, by which fourteen coffee-producing nations and the United States have apportioned the annual amount which each will export, first, to the United States, and second, to other countries. The United States will limit its importation from non-American countries to a yearly quota of 355,000 bags of 132 lbs. A Central American Coffee Conference met June 10-20 at San José, Costa Rica, to implement the agreement and arrange many details regarding quotas, surpluses, control over shipments and infractions. Brazil and Colombia are the largest American exporters of coffee. Altogether the fourteen countries will send 15,545,000 bags to the United States and 11,612,000 to all other markets.
Business Relations.
There are several new agencies for Pan-American economic affairs. The Inter-American Commercial Arbitration Commission has established a clearing-house for considering controversies between North and Latin American businessmen, which can then be forwarded to government and private agencies for quick adjustment. An Inter-American Business Relations Committee has been formed under it to supervise trade relations among the businessmen of the Americas, and to protect buyers and sellers from practices inimical to hemisphere solidarity. In Argentina an Inter-American Economic Institute will further economic and commercial relations with other American countries. The new government-created Argentine Trade Promotion Corporation, with offices in Buenos Aires and New York, affords the first instance of cooperation between a government and private business, combining government finance of operations with private merchandising experience. These two agencies appear already to have produced results in the new Argentina-United States treaty.
Inter-American Highway.
President Roosevelt on May 1 asked Congress to appropriate funds for completing a 1550-mile stretch of the Inter-American Highway, from the southern border of Mexico to the Panama Canal, of which the United States would finance about two thirds of the construction, with a maximum governmental expenditure of $20,000,000 over a period of five years. The importance of this inter-continental road is now increased by reasons of military strategy, continental solidarity, and the development of new lands and natural resources. Various aspects of the complete road were discussed at Buenos Aires in May during a conference of highway engineers from Argentina, Bolivia, Chile, and Peru. Construction of different parts of the road in those states was agreed upon formally, and other countries are expected to meet regionally in order to lay out the whole system. In mid-summer the Pan-American Union reported that the highway includes between Mexico and Panama 62 per cent of road suitable for all weathers, 16 per cent for dry weather only, and 22 per cent of trails impassable for vehicular traffic. The part through Costa Rica, Nicaragua and Panama is still unfinished. In South America the road has advanced further; from Caracas through Bogotá to beyond Quito it is drivable; between southern Ecuador and northern Peru much work has been done on both the north-south Pan-American route, and eastwards over the Andes to the headwaters of the Amazon. The sections in Chile and Bolivia are open throughout; Argentine roads are good; Paraguay and Uruguay are developing their sections, as is Brazil. From South America it is reported that the highway is about 80 per cent all-weather and paved road, the rest dry-weather, and that there are no trails except in Colombia and Ecuador. When completed, the Pan-American Highway will stretch for 15,000 miles, from Alaska to Magallanes in Chile.
Cultural Cooperation.
Pan-American solidarity through better understanding of all American peoples and their cultures is being sought in diverse ways. Summer schools, seminars and study tours in Latin America have been more varied and plentiful than ever before, including summer sessions in the universities of Chile, Cuba, Mexico, Peru, and Puerto Rico, seminars in farming, education and Mexican life, and numerous travel and good-will tours. In the United States a winter 'summer school,' attended by over one hundred South American educators, was held from January 19 to March 2 at the University of North Carolina, under joint sponsorship of the Pan-American Union, the Institute of International Education, the Carnegie Endowment for International Peace, and the American Council of Learned Societies. Brown University has recently adopted a three-year project for microfilming rare and ordinarily inaccessible materials on Latin America, with the object of eventually making the university a world reference-center for students of early Latin American culture. The work is financed by the Rockefeller Foundation. Twenty fellowships were awarded in June to Latin American scholars and artists, in the twelfth Guggenheim competition; these fellows will come to the United States, while fourteen others will go to Latin American countries for the year. See also articles on the various nations involved.
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