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‘Unifying’ the Americas

(January 1943)

From The New International, Vol. IX No. 1, January 1943, pp. 30–31.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Inter-American Affairs – 1941
Edited by Arthur P. Whitaker
Columbia University Press, 1942

This book is the first in a proposed series of annual surveys of the principal developments in inter-American relations, and was financed by the Division of Intercourse and Education of the Carnegie Endowment for International Peace. Arthur P. Whitaker of the University of Pennsylvania has a review of inter-American relations from 1889 to 1940 and a chapter on politics and diplomacy in 1941; George Wythe, liaison officer of the Department of Commerce, contributes a chapter on economics and finances; the problems of cultural relations, public health and social welfare are superficially dealt with in two other chapters by William Rex Crawford and William L. Schun.

The authors claim to support no particular cause and especially not the cause of “hemisphere isolationism.” Actually the whole problem is viewed from the position occupied by the United States in relation to Latin America. The authors measure the success and progress of inter-American cooperation by the yardstick of U.S. influence and domination.

This volume is intended as an unbiased and factual account of what happened in 1941 to enable the reader to draw his own conclusions. The authors are handicapped at the very outset because the original plan to include a large section containing detailed statistical information about the American nations had to be abandoned because of wartime conditions. The scantier statistics, however, do reveal the most important trends in the relationships between Latin America and the United States since the outbreak of the war. The big failing of the book, however, is that the authors do not correlate the facts they present and do not establish these trends. Taking the book at face value will leave the reader lost in a maze of historical facts and economic data. The reader must contribute to the book as much as the authors contribute to the reader.

Whitaker opens the book with a hasty review of inter-American relations during the years 1889–1940. It is during this period that the United States becomes dominant in the Western Hemisphere. With the acquisition of overseas bases, including the Panama Canal zone, the strengthening of its naval power (by 1905 the U.S. Navy is raised from thirteenth to third largest in the world); and the Hay-Paunceforte Treaty (1901) in which England surrenders her right to any control of the Panama Canal, the United States begins to push England out of the Caribbean. With the turn of the century the economic influence of the United States grows at a rapid pace. Her investments in Latin America increase from $508,000,000 in 1897 to $1,650,000,000 in 1914 and by 1929 they represent a third of all her foreign investments, $5,430,000,000.

Whitaker’s main concern is with the development of Pan Americanism. Although he claims otherwise, it is obvious from even his meager examination of the numerous conferences that Pan Americanism is the program of the United States penetration into and domination of the Western Hemisphere. Starting with the 1928 Havana Conference, the United States has emerged from each of these gatherings stronger and in a better position to determine the rôle and policy of the Latin American countries. By the time the war broke out in Europe, Pan Americanism, according to Whitaker, “owed its vitality, if not its very existence, mainly to the leadership of the United States, or that leadership of the United States was effective mainly because it possessed an overwhelming preponderance of economic and military power in America.”

Toward U.S. Hegemony

Since 1939, the war and the position of the United States toward it have dominated all inter-American relations. As the United States shifted its position from neutrality to non-belligerency and finally to actual military participation in the war, it dragged the Latin American countries in its wake. This was not accomplished without objections and strong resistance on the part of many of its Southern neighbors, most particularly Argentina, which was more dependent than any other American nation on trade with Europe – but accomplished it was, step by step, in tune with the needs of the United States. At the 1939 Panama City Conference a Pan American “safety zone” was established. According to Whitaker, this measure was never really enforced but it nevertheless gave the United States power to patrol the Southern oceans along the coastlines of South America. The 1940 Havana Conference went even further in the direction of tying the Latin American republics to Uncle Sam. The Convention for the Provisional Administration of European Colonies and Possessions which was adopted at that time prohibited the transfer of these colonies to Germany or Italy and provided for American administration of these “orphaned” colonies. The old proviso calling for unanimous agreement on any action taken was dropped so that the United States was in reality authorized to take any action it saw fit. This Whitaker considers “sensible and realistic because the United States was the only American state that had the requisite power for effective action.” The proposed plan for a Pan American cartel, which would have assured the economic hegemony of the United States in the Western Hemisphere (presented, of course, as a plan to meet the menace of a totalitarian Europe) failed of adoption, and only the military and political measures outlined above were achieved. Whitaker fails to point out that the cartel plan failed because at that time a number of the Latin American countries still depended on the European market for the sale of their most vital products. The plan, however, is by no means permanently shelved.

Concrete Manifestations of U.S. Power

By the end of 1941, when the United States entered the war, most of the smaller states followed suit. The others severed diplomatic relations and prepared to take the next steps. Argentina did neither, but declared that it would not regard the United States as a belligerent, which made possible the use of Argentine ports by U.S. warships. Peru froze Japanese funds, but not Italian and German because their financial interests in Peru were so extensive that such a step would have disrupted the business system of the whole country.

Whitaker seems somewhat puzzled by the fact that U.S. investments in Canada did not produce the same resentment toward Yankee imperialism as was produced by smaller investments in Latin America. This is a problem he leaves to future students of Pan American affairs. Actually the riddle is solved in the difference of economic development of Canada and the Latin American countries. The economic backwardness of the latter causes U.S. exploitation to be so much more brutal and apparent.

The section on economics and finances during 1941 is by far the more interesting. Neither Whitaker nor Wythe, however, relate their particular subjects to the other, though it is obvious that there is a very dose connection between Yankee economic penetration and influence in Latin America and the diplomatic and political trends.

The war and the isolation it imposed upon South America accelerated the process which had been taking place since the United States embarked on its Good Neighbor policy. Cut off from the European market, the Southern “republics” one after another fell more and more into the orbit of American economic domination. Their dependence upon the United States as a market and as a source of supply has been greater than during the First World War.

The demand for large quantities of raw materials at higher prices and outright financial assistance through loans from the Export-Import Bank and purchases of strategic war materials by the Rubber Reserve Co., the Metals Reserve Co. and the Defense Supplies Co., all subsidiaries of the Reconstruction Finance Corp., stimulated and increased trade with the United States. While the British share in this trade declined sharply, and the share of Axis and pro-Axis powers was diminished by the export control and black-listing system of the United States, the latter’s share rose as follows:

Imports: In 1937–38 the U.S. supplied 35 per cent; in 1940, 54.6 per cent; and in the first six months of 1941, 60.5 per cent.
Exports: In 1937–38, the U.S. took 31 per cent; in 1940, 43.7 per cent; and in the first six months of 1941, 54.3 per cent.

The United States is not only taking advantage of the war to oust its rivals from Latin America, but has taken steps to continue its predominance in the future. That is the job of the Inter-American Financial and Economic Advisory Committee.

If the entire projected survey is actually carried through, the value of the book would be greatly increased. Standing alone there are far too many gaps in the study of inter-American relations. For the student of this most important subject one who already has some knowledge of the main trends in Yankee-Latin American developments, Inter-American Affairs has some value as a supplementary study of specific problems.

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