1942: Honduras

The arrival of United States health specialists in Honduras in June indicates progress towards the cooperation between the United States and Latin America, foreshadowed at Rio, on health and sanitation measures. Experts had already been sent to Ecuador and Brazil. Economic cooperation has taken the form of an exclusive rubber purchasing agreement, signed in the summer, which in September brought the total of such agreements up to eight. (Similar agreements had already been concluded with Brazil, Perú, Nicaragua, Costa Rica, Colombia, Bolivia and Ecuador.) A rubber cultivation contract has also been signed with the Firestone interests. A loan from the United States was reported in the spring, the amount not indicated, to be applied in part to highway construction, especially on an unfinished 90-mile section of the Inter-American highway, and in part to defense requirements and to bolstering the Republic's internal economy. The acceptance of such aid represents a change in President Carías' former stand against foreign borrowing.

Honduras, as one of the banana republics, has been seriously affected by the shortage of shipping. Normally, bananas account for over 60 per cent of the country's exports. To meet this situation the United Fruit Company and others have embarked on a program of agricultural expansion in all Central America, planting abacá (manila hemp) in Panama and Costa Rica; rubber in Honduras and Costa Rica. Plans are also proposed for cultivating other tropical products hitherto imported from the Far East. Dehydration of bananas is offered as another solution. The rehabilitation of the Mexican Railways, to permit overland movement of coffee and bananas, and the completion of highway facilities in Central America, are significant in this respect.

Since the settlement of the Ecuadorean-Peruvian boundary dispute (see ECUADOR) the frontier dispute between Honduras and Nicaragua over the eastern half of their common boundary remains the only one of any consequence in Latin America.