Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-05
BY CASTOR NERVAL.


| ers and economists that a situation
almost equally critical as that prevail
| ing in Germany exists today on the
other side Of the Rio Grande
Only a few days before the Presi-
dent made public his sensational an
nouncement for delaying payments on
all European war debts and repara-
tons the Chilean minister of foreign
| affairs, moved by the growing financial
depression which has gripped Latin
America, sent out circular note to
the governments of all the Latin Amer
lean republics, inviting them to an
international conference for economic
relief. This conference Is supposed to
deal with the critical economic prob
lens at present confronting nearly
every one Of the Latin nations, with
the tariff arrangements which stand
in the way of closer commercial inter-
change, and with the difficulties some
OF the neighboring countries are con-
fronting in trying to meet the pay
ments and obligations Of their external
debts.
eliminates Difficulties.
The Latin American crisis Is no
secret to anybody who has been read
ing daily newspapers for the last three
years. The action of the Chilean gov
eminent is only the elimination of the
trying difficulties which the Latin
countries have been experiencing, the
real seriousness Of which does not seem
to be as yet fully realized in this
country.
The coincidence, however. Of these
two factS-the Hoover moratorium plan
for Europe and the Chilean call for a
Latin American Conference for Eco
nomic Relief-happening within a few
- 70
impress upon the public mind de-
termining question: Why should not
the same attitude shown toward Ger
many and the other European coun-
tries be adopted in respect to the eco
nomically stricken republics to the
south of the United States?
OF course, when I say the same at
titude mean the same spirit of benev-
olence, cooperation and good will, not
exactly the same material action or the
same actual steps, for the Latin Amer
lean and the European problems are
two, different in character. The differ
ence, a fundamental one, lies in the
fact that in Latin America there are
no intergovernmental debts involved,
but instead governmental debts eXclu-
sively to private individuals and banks
Not Diplomatic Problem.
Debts to private individuals and
banks, theoretically at least, are not
subject to Government decisions. Mel
Their the President of the United States
nor the State Department can suggest
a postponement of payments. Probably
not the bankers themselves. because
the bonds are actually scattered all over
the country in the hands of private in
dividuals who bought them from the
banks for investment. But what the
United States Government could DO, 1t
is claimed, with the same spirit that in
spired it in proposing the European
moratorium, Is to lead the way for
careful and friendly consideration of
the Latin American problem.
The Latin American debts are owed
to the people of the United States. not
to the Government, it is true, but, on
the other hand, in democratic system
like this, it is asserted. the Govern
ment is the representative and adviser
of the people, and, as such, nothing can
prevent 1t from recommending course
Of moderation and cooperation toward
might call attention to the gravity of
the economic and financial situation in
Latin America and make proposals for
alternating it.
Two courses have been repeatedly
mentioned by press correspondents in
the last few days.
Suggests Money Advance.
One would be that the Government
INSPIRE" private financial interests to
advance to the harder hit Latin Amer
lean republics sufficient money to meet
their interest payments and sinking
fund requirements. and thus relieve
their greatly reduced national budgets
of this drain.
The other would be relatively small
Government loans direct from the
United States Treasury or non-govern-
ment loans from the Federal Reserve
System.
In either one Of these cases the Latin
American republics. it is said, would
gain the same benefit as from a mora
torium, while holders of their securi-
ties in the United States. Canada, Eu-
rope and elsewhere would not suffer the
deferment Of income from bonds.
There Is some question as to the au-
thority of the Federal Reserve Board to
extend credits to Latin American CEN
trail banks. according to New York
Times dispatch, because of their varied
and. in cases. peculiar organization.
Many OF these institutions, however, are
organized along the lines of the Amer
lean Federal Reserve system, and where
there Is adequate Government control
the reserve banks probably could legally
extend credits.
Either that or the conversion of
Short-term into long term loans to pre-
vent further drainage Of their gold re-
serves. with consequent adverse effects
on exchange and currency. appears to
be the best way to help Latin America
out Of this threatening financial depres-
sion.
Complement Of United States.
In studying the Latin American sit
uation various considerations should be
borne in mind. In the first place, it
might be well to remember that Latin
America comprises 20 different repub-
lies which by geography and history
constitute the logical economic COM
plement Of the United States.
It is true that, politically, there are
still few problems separating the Latin
republics from the United States, but
none OF them is of an unSolvable nature
Psychologist differences which account
for certain misunderstanding are grad
ually adjusting themselves, and, in gen.
eral, the ideal Of pan-American move
ment is gaining day by day on the other
side Of the Rio Grande.
At any rate, it Is claimed, the Latin
American countries, If not so already,
are bound to be better friends of Uncle
sam than the European powers. It is
being argued that, from a purely senti-
mental point Of view, they are then en-
titled to the same, If not to a more SYM
pathetic, treatment by their American
creditors.
Economic Value Important.
But this is not all. even more sig
nificant than their political Importance
is their economic value to the United
States. Economically speaking, the
Latin American countries are almost
indispensable to the prosperity of the
United States. Countries of vast but
unexpected natural resources, and lack
ing industrial products, they constitute
both the hest nrnSnac.INe field for the