Evening star., 1931-06-27
SOUTH AMERICAN
|. SECURITIES HIGHER
Suggestion That U. S. May
Extend Aid Has Eene-
fetal Effect.
BY CHARLES r. spxARE.

Special Dispatch to The Star.
NEW YORK, June T.-The sug-
gestion that the administration might
go further In its plan Of assisting
debtor nations and formulate Q policy
either of public or private aid to South
American countries has tremendously
stimulated the securities of those re-
publics. which. for several days had
been rejecting some such news.
The dollar debts of Argentina, Bra
zil, Chile and Peru aggregate approx
mately the amount of the dollar loans
to Germany publicly held here. AL
ready two South American countries,
Peru and Bolivia, have defaulted on
their loans. Much diflculty has been
experienced by the other republics In
meeting their regular interest and
sinking fund payments at q time when
their revenues were shot to pieces by
the general commodity situation.
Credits Extended.
It Is well known that American
bankers who have been sponsors for
South American governments have
been extending short term credits to
them for the purpose Of meeting ma
turing obligations and to cover inter-
est and sinking fund requirements.
Within q few days, the bankers for
some OF the Brazilian provincial loans
have been compelled to supply the de-
aciency In current interest payments
out of their own pockets or by draw
ing on special reserve funds.
One Of the largest OF the maturing
loans Is that Of $50, ,0OO, 900 made for
the account Of the Argentine govern
ment last September and falling due
on October /. On July 1 the Argen-
tine government has q loan maturing
in sterling, which it is understood will
be paid of in London In gold. Re-
Gently 1t was stated that Argentina
has $40 900, 900 in gold IN New York
aIlocated for special purposes There
are also some credits to Chile that
mature later In the year.
The suggestion was that additional
private credits be granted by American
bankers to their South American clients
to relieve them Of the pressure on their
treasures for paying interest and ma
turtles and drawing down the ratio OF
their gold holdings.
Political Outlook Improved.
It is recognized that in some ways
conditions in South America, from a
financial standpoint, are more serious
than in Germany. On the other hand,
the series of revolutions which occurred
in South America last year, and which
grew out Of distressing economic con-
ditions, has made the political outlook
more secure among the Southern re-
publics than in those of Central Europe
There Is still certain element among
the American public which would be
more inclined to assist South America
than Germany, believing that it would
I,n haINfrtI xn frrnfapVa
to give support to one Of our largest
customers than to render aid to one
of the most potential Of our CON-
petitors.
InaSmuch as none Of the South Amer
lean countries Is debtor to the United
States Government, the modus operandi
Of the suggested financial relief to the
Southern republics must be Of q differ
ent character than that advocated to-
ward Germany. 1t Is doubtful If the
Government, as such, can take any
hand in the matter. With the prece-
dent established in the German credit
just granted, in which the Federal Re
serve banks are a participant to the
extent of $25, 900 ,000 IL would be con-
sistent for the Federal Reserve Board
to appear as lender also in South
America. The more likely Arrangement,
however, would be for assistance to
be given in the form Of banking credit.
1t would not be possible for even Ar
gentina at this time to arrange q long
term loan, inasmuch as her per cent
bonds are selling at a discount OF
about IS points.
Substantial Recovery.
Within the last few weeks there has
been a substantial recovery in all
South American issues, which had