1942: Colombia

The torpedoing of Colombian schooners and Germany's disregard of Colombia's protest over the loss of one of them, The Resolute, aroused intense anti-Nazi feeling and demonstrations in that Republic. All Axis nationals were ordered inland. No declaration of war has followed the severance of diplomatic relations last January, however. Close cooperation, nevertheless, exists between Colombia and the United States regarding matters pertaining to the defense of the Panama Canal, the Colombian Government having reaffirmed its determination to prevent any threat to the security of the Canal from Colombian soil. Colombian troops have been moved to strategic positions. A Lend-Lease agreement with the United States was signed Mar. 17 according to which, it is believed, some $20,000,000 to $30,000,000 in war material will be delivered to the Colombian Government. The activities of the German Transoceanic News Agency have been halted. Teaching in foreign languages has been prohibited and some of the German schools in the country have been closed. President López has revived the idea of a Pan American League of Nations which was proposed by Colombia at the Buenos Aires Pan American Conference several years ago. Following the lead of other Latin American countries, on Nov. 27 Colombia severed diplomatic relations with the Vichy Government, declaring that it had ceased to exist as a sovereign entity.

In the presidential elections held on May 3 Alfonso López, President of Colombia from 1934 to 1938, was elected over Carlos Arango Vélez, candidate of the dissident Liberals and Conservatives, by a 200,000 majority. He took over the presidency from Eduardo Santos on Aug. 7. President López is leader of the leftist wing of the Liberal party. His former administration was marked by social reform and a program of increased taxation. There has been considerable debate in Congress and the press over a new Concordat signed this year with the Vatican. Leader in the controversy has been Laureano Gómez, head of the opposition Conservative party, which has been charged by President López with engaging in propaganda for the Spanish Falange.

Geographical proximity to the United States has increased Colombian coffee sales, and a large increase in the quota was voted by the Inter-American Coffee Board in July to insure maximum use of limited shipping facilities. Lack of shipping space is causing serious economic conditions in Colombia, however. Wild rubber is being transported by air from the jungle area of eastern Colombia and the United States Rubber Reserve Corporation has put forward a plan for opening up millions of square miles of virgin rubber tracts which, it is estimated, could yield the United States 3,000 tons of raw rubber a month if the necessary air freight lines and landing fields were established.

An important decision regarding the ownership and operation of mining properties was handed down by the Colombian Supreme Court this year, when it overruled the Government in its seizure of properties along the Telembi River belonging to the South American Gold and Platinum Company. On the other hand, a nationalistic move against foreign capital is indicated in a new law, known as law Number 13, which requires Colombian agents to represent foreign companies in all legal matters, including the signing of contracts and issuing of checks. This requirement, which is included in a law authorizing the construction of two new hydroelectric projects in the Department of Tolima, is considered very burdensome by foreign operators. Foreign capital entering Colombia will, furthermore, have to be invested up to 20 per cent of the total, in new 'national economic defense bonds,' recently authorized to the amount of 60,000,000 pesos, a ruling which will hit the tourist trade and also semi-official United States' organizations like the Rubber Reserve Corporation. The law authorizing this internal loan requires savings banks to invest 20 per cent of their deposits and insurance companies 10 per cent of their reserves in these bonds. The proceeds of the loan are to be applied to liquidating the deficit in the 1942 budget, to balancing the 1943 budget, and for public works and agricultural and industrial development. An Institute of Tropical Agriculture is to be established in Colombia to foster the development of the country's natural resources. Under an agreement with the U. S. Department of Agriculture, the sum of $5,000,000 is to be allotted to this work.

The importation and exportation of United States paper currency, except through the Bank of the Republic, was prohibited by Government decree in June. In the same month Colombia offered to settle the outstanding dollar obligations of its Mortgage Banks.

Latest census returns give Colombia a total population of 9,523,200, which represents an average of twenty-two persons per sq. mi.

1941: Colombia

The Congressional elections of March 16, in which 80 per cent of the electorate voted, have significance for the choice of president in 1942 since presidential candidates are selected by party conventions composed largely of Congressmen. Official figures gave the Conservatives 60 seats in the lower house, the Lopistas 42 and the anti-Lopistas 39, with the Conservatives holding the balance between the two Liberal factions, which are irreconcilably split over the candidacy of ex-President Alfonso López. At the Liberal party convention in August López, who represents the Leftist wing, secured 62 out of 120 votes and was declared the Liberal candidate. The anti-Lopistas, then, withdrew from the convention. The Conservatives will run no candidate but will back any anti-Lopista candidate. The secession of the entire Conservative minority from the Senate, together with the thirteen anti-Lopista Senators, in September, indicates the current political alignment. López is popular with organized labor and the masses but is distrusted by the business interests. His declarations on foreign policy have been conflicting but, in general, support the pro-American position of President Eduardo Santos, which the Liberal party convention has officially ratified. The Conservative leader, Laureano Gómez, strongly Catholic and pro-Franco, has been distinctly anti-United States.

Until war actually came to the Western Hemisphere, political capital was made of questions of foreign policy. Following the entry of the United States into the War, however, Colombia severed diplomatic relations with the Axis powers and publicly stated its complete solidarity with the northern republic. Concern for defense of the Panama Canal, which earlier in the year President Santos declared 'vital to all the Americas,' led to a government investigation of properties owned by German nationals, following President Roosevelt's public statement, Sept. 11, that in Colombia there were secret landing fields within easy striking distance of the Canal.

The United States' blacklisting, in July, of firms and persons in Latin America believed to be acting in the interests of the Axis provided material throughout the Latin American world for violent anti-Yankee propaganda. In Colombia it led to the appointment of a Senate Committee to study its effects on the Republic's economy. One of the Committee's members, José de la Vega, who is associated with Laureano Gómez in editing the anti-United States journal, El Siglo, attacked the blacklist in the Senate as an assault on neutral rights. Of the 250 blacklisted firms operating in Colombia, only 25 were owned by Colombians. Of these nine had already been eliminated as a result of negotiations with the United States authorities. The full record of Axis agents and sympathizers in Colombia, compiled by the United States' Ambassador, Spruille Braden, and his removal of German employees as distributing agents for North American firms, made the blacklist less necessary for this Republic.

On Oct. 10 President Santos signed a bill authorizing a $12,000,000 loan from the Export-Import Bank, to be used for hydroelectric plants, roads and irrigation projects. Arrangements were virtually completed during the year for the refunding of the direct dollar obligations of the Colombian Government, outstanding to the amount of $44,000,000. A decline in customs revenues and other taxes caused the ordinary fiscal operations to result in a cash deficit, estimated at about P. 8,000,000. The 1941 budget balanced revenues and expenditures at P. 76,734,000.

The restriction of Colombia's foreign trade in 1941 almost exclusively to the Western Hemisphere increased the Republic's economic dependence on the United States which, for the first four months of 1941, accounted for 76 per cent of the total. The problem of priorities created difficulties in securing the necessary raw material for Colombia's manufactures. The trade outlook, on the whole, was favorable, however, due chiefly to the rise in the price for coffee, Colombia's chief export, to the highest level in a decade. The quantity sold in 1940-41, 4,400,000 bags, represents a 17 per cent advance over the preceding year. Gold production in 1941 reached a new high, and the output of petroleum, third in importance among Colombia's export commodities, showed a steady recovery. The major part of Colombian oil goes to Curaçao for refining. The sigatoka disease and the loss of German and Dutch markets caused a 35 per cent decline in the output of bananas, Colombia's fourth export product. See also PAN-AMERICAN AFFAIRS.

1940: Colombia

A sharp cleavage has developed within the Liberal Party, in power since 1930, the factions splitting over the question of reelection in 1942 of ex-President Alfonso López. Sr. López, who was President in 1934-38, is popular with the left wing of the Liberals and with the workers and peasants. The present Chief Executive, President Eduardo Santos, is associated with the right wing. The minority anti-López Liberals have made occasional political deals with the opposition Conservative Party, as in the selection this year of an anti-López President and Conservative Vice-President of the lower house. A similar split threatens the Conservatives, occasioned by a statement to the Senate of their leader, Laureano Gómez, that his party would consider a second election of López a declaration of civil war. Sr. Gómez's paper, El Siglo, has attacked the administration's foreign policy, which favors cooperation with the United States. Of more immediate concern to the Republic was the obstruction of the Washington coffee quota agreement (see EL SALVADOR) and the defense loan, both of which measures, however, were passed at the final session of Congress Dec. 16. The defense bill authorizes the organization of a National Defense Council and a loan of 30,000,000 pesos, plus an additional 20,000,000 if the government considers necessary. The problem of negotiating the loan remains.

In July the sweeping emergency powers granted President Santos in December 1939 expired, but three days before their expiration the government adopted a series of measures to strengthen the country financially and to stimulate the development of the nation's resources. The plan to regularize the national debt by refunding operations and permanently to reduce interest charges on the external debt would mean a 50 per cent reduction in contractual interest, from 6 to 3 per cent, on the direct dollar obligations of the Republic, which are only about one-third of the total dollar debt. The debt service provided represents only 3.4 per cent of the 1940 budget, which calculated to balance total budgetary receipts and expenditures at 91,626,690 pesos. The fact that no consideration is given to departmental, municipal and corporate bonds and the inadequacy of such discriminatory payments are the reasons advanced for the Foreign Bondholders' Protective Council's refusal to recommend the proposal to the holders of these bonds. It is a great improvement, however, over the Republic's previous nominal offer of only a fraction of one per cent. Moreover, so far as the economic aspects of the plan go, it looks to fundamental reforms in the nation's economy and government direction of Colombia's agricultural, pastoral and industrial development. It provides for easy credit facilities to farmers, an encouragement of crops diversification and cattle-raising, special attention to the cultivation of rubber, quinine and coconuts, and for means, it is hoped, to correct the foreign control of its petroleum and banana industries. Financial commitments by the government under the plan total 17,500,000 pesos, to be supplied from a 20,000,000 peso loan contracted with the Banco de la República, an operation, in turn, made possible by the $10,000,000 credit recently extended by the Export-Import Bank. This loan should make it possible to balance Colombia's international account without much loss in gold reserves. The Exchange Control Board reported a net foreign exchange loss of about $11,630,000 for the first half of 1940. It must be remembered that Colombian export values, decreased nearly 15 per cent as compared with 1939, must be considerably reduced in terms of actual returns to the country because petroleum, its second export, and banana and platinum shipments are largely the products of foreign capital.

The government has also issued a series of decrees reorganizing the coffee industry with a system of price controls and export licenses and an official organization known as the National Coffee Fund, which will operate with revenues obtained from two new taxes levied on the industry. The Washington coffee pact allots Colombia, the second largest coffee exporting country of Latin America, a quota of 1,079,000 bags outside the United States market; coffee exports to the United States will be limited to 3,150,000 bags. Too great a dependence on this single commodity is one of the weaknesses of the nation's economy, which is especially apparent in a period like the present of sharply reduced returns from coffee exports. This fact lends interest to a thorough analysis of Colombian agriculture by three United States technicians, to be presented to the Colombian government, which centers on the possibilities of Colombia as producer of tropical products not competitive with the United States.

Unofficial reports of the great increase in Nazi activities, especially in commercial propaganda, is of special significance to the United States in the case of this country, which is so strategically placed with respect to the Panama Canal. Colombia has taken action to nationalize, by 1942, all air lines operating in the Republic, including Scadta (Sociedad Colombo-Alemán de Transportes Aereos), pioneers in commercial aviation in Latin America. Under the name Avianca (Aerovias Nacionales de Colombia) it will be operated and owned cooperatively by Colombian and United States interests. In June the German pilots were dismissed. In a message to Congress July 20, President Santos reiterated a pledge that no attack or threat of attack against the Panama Canal would be permitted from Colombian territory, and declared that the country's foreign policy was based on cooperation with the United States, economic assistance being needed to maintain solidarity with the northern Republic.

1939: Colombia

Congressional elections on March 19 returned the Liberals to power in both houses, but at the opening of Congress in July, members of the Conservative Party were present for the first time in four years, thus ending the boycott in effect during the regime of President Eduardo Santos and his predecessor. The Government is committed to an advanced program of land distribution, labor legislation and other measures of social reform. The presidential message mentioned: (1) the necessity of constitutional reform to secure the independence of the judiciary; and (2) the importance of technical collaboration with the United States in regard to national defense, especially aviation. Attention was called to the improvement in relations between the state and the Catholic Church, indicating a growth in political good feeling. On the other hand, the Colombian press has expressed fear of the infiltration of Fascism into the Conservative Party and of the activity of Catholic societies working for the establishment of a corporative state. President Santos spoke in high praise of the Good Neighbor policy, saying that the 'replacement of imperialist ambitions by mutual respect and full recognition of each other's sovereignty had led to a feeling of confidence which did much to guarantee law and justice in the Western Hemisphere.' Though his policy of close cooperation with the United States has met with outspoken opposition from the Conservatives, the House of Representatives, on Aug. 23, following a discussion that revealed undercover Nazi activities, gave the President a vote of confidence on this cooperation.

Following the outbreak of war in Europe President Santos sent a message to all the American Governments, suggesting cooperation and Pan American solidarity to insure neutrality in the Western Hemisphere. On Sept. 2 the Minister of War reported the assumption of control over all commercial aviation. Later in the month diplomatic negotiations with Colombia were opened by the United States regarding the elimination of about twenty German pilots, thought to be German reserve officers, on the Scadta air line, an enterprise financially controlled by Germans, with a North American air company holding a minority interest. Since Colombia is the country nearest the Panama Canal, a vital spot in our national defense, the elimination of Nazi activity there is a matter of special concern to the United States. President Santos' declaration of July 20 that Colombia would not allow any threat to materialize against the Canal from her territory is important to this country.

The Colombian Supreme Court has confirmed the title of a foreign mining company to its property after it had been annulled by the Minister of Industries and Labor, ruling that questions of title were solely within the domain of the courts and could not be decided by purely administrative action. This decision established the principle of the supremacy of law over arbitrary rulings by government officials. No distinction was made, moreover, between foreign and domestic enterprise.

The 1940 budget was approved by Congress on Dec. 16. Two-thirds of the total estimate of $40,020,000 was assigned to public works, national defense and education; over 3,000,000 pesos ($1,710,000) was set aside for service of the foreign debt, in default for five years. Special emergency powers, limited to July 1940, have been conferred on the President, dealing chiefly with banking and exchange control regulations and the renewal of external debt service. On Nov. 30 United States Government officials, representing the Treasury, the State Department, the Securities and Exchange Commission, the Secretary of Commerce and the Export-Import Bank, conferred on a plan to settle Colombia's defaulted debt, which has been referred to the Foreign Bondholders' Protective Council. Although details of the discussions have not been disclosed, it is understood that refunding is contemplated, looking to a reduction in interest costs.

1938: Colombia

On Aug. 7 Dr. Eduardo Santos, a prominent 'middle-of-the-road' Liberal, was inaugurated President. The fact that his election in May was uncontested is not remarkable since the opposition forces have abstained from elections for several years. The real battle for the presidency took place within the Liberal party itself. The rival candidate, Sr. Daría, a scholar and a radical, withdrew from the race shortly after the party convention in July 1937, nominated Dr. Santos. His election has been interpreted as a reaction against the allegedly extremist tendencies of his predecessor, Alfonso López, whose administration since the summer of 1937 had been in difficulty over its efforts to remedy agrarian abuses, notably through Federal regulation of the banana industry. Dr. Santos was Foreign Minister in the Olaya administration; represented Colombia at the League of Nations at the time of the Letitia controversy with Peru; and for twenty-five years has been publisher of El Tiempo, the most powerful organ of national opinion. In his campaign speeches he expressed himself against 'political labor unionism,' desiring from the outset to keep clear of the charges of demagoguery brought against President López because of his concessions to labor groups. He stressed, too, the need for revision of the concordat with the Vatican, dating from 1888, an agreement which gives a disproportionate control over education to the Church, and which the Liberals, ever since 1930, have been trying to get liberalized. The secondary schools, a majority of which are Catholic, were established during the Conservative regime, and are opposed to supervision by the Liberal Government. It is charged that four-fifths of them are sub-standard. A student strike in May, of a political nature, led to a ban on all popular demonstrations and on the broadcasting of news relating to public order.

The country's problems are more economic and social than political, however. The chief export is coffee, which accounts for over 50 per cent of the value of all Colombia's exports. Here, as elsewhere, the Brazilian decree of November 1937 has caused 50 great a decline in coffee prices that the Executive has been invested with emergency powers. Customs receipts and other revenues have run below estimate; hence, prudence has been urged in expenditures, although the budget for 1938 calculates income and expenditures to balance at 81,567,970 pesos, including a carry-over from 1937 of a surplus of 2,977,306 pesos. An additional appropriation of 5,000,000 pesos for defense was authorized in May. (It has been denied that this increase is due to renewed Peruvian activities on the Letitia frontier.) No budget since 1934 has included a provision for external debt service, but an advisory committee has been appointed by the new government to negotiate with Colombia's foreign creditors, and negotiations have commenced.

Import restrictions have been recently established by the Exchange Control Board. Colombia's trade balance with the United States runs strongly in Colombia's favor, and the United States takes 60 to 70 per cent of the total value of Colombian exports. In March, the most-favored-nation trade agreement with Great Britain, dating back to 1866, was discontinued, indicating a change in Colombia's trade policy, and putting it on a compensation basis (see URUGUAY). The treaty of 1937 with Germany, on the other hand, has been extended for two years from December, although Colombia buys from Germany twice as much as it sells.

Labor troubles with the Government are thought responsible for the reduction of the United Fruit Company's activity in Colombia and its transfer to Costa Rica. A banana strike in March was averted by agreement between workers, employers and the state, providing for a tri-partite labor board, collective agreements, and a minimum wage. In the last eight years 464 labor unions have been recognized, bringing the total number of duly established unions up to 558, with a membership of 31,062 men and 3,374 women.