Evening star., 1932-07-31
SOUTH AMERICAN
OUTLOOK DECLARED
NOT TOO CHEERF Ill
Argentine Republic Expected
to Meet Obligations in Spite
of Bad Situation.
BY DIR. MAX WINKLER.
Special Dispatch to The Star.
NYr7yIy UnDD Y,,I,y On (N A NJ

Special Dispatch to The Star.
NEW YORK, July 80 (NAN.A).-
Even though the possibility of the Ar
gentine Republic suspending payments
on contractual obligations is remote,
reports from BuenoS Aires do not af-
ford especially cheerful reading
Revenues have fallen of sharply,
the decline being aggravated by low
prices for practically all staples. The
gold supply has been reduced materi-
ally, and internal difficulties have add
ed greatly to governmental expenditure.
A depreciation Of almost 40 per cent
in the value Of the republics money
has rendered it increasingly difficult to
support comfortably a relatively heavy
Indebtedness and to pay dividends and
interest on large foreign investments.
Americas stake in the republic is
which about $500 ,000, 900 is represented
by so-called portfolio holdings-that is,
securities publicly sold on behalf of the
| Argentine government, the various po-
litical subdivisions and corporations.
Economic Difficulties.
Regardless of whether or not Argen-
tina's plight, like that of her neighbors,
will be blamed upon Soviet Russia, II
is abundantly obvious that the difficult
ties Of Latin America have been due
exclusively to economic tribulations and
misrule. Moreover. the nature of the
political soil is such as to preclude the
implanting of the seeds Of anarchy
now or later.
Argentina, outside of Brazil, the
largest of the South American Repub-
lies and more than so times greater
| than the smallest, Uruguay, is more
advanced economically than her neigh
bors. Buenos Aires, the capital of Ar
gentina, numbers well over 2,00000C
souls, and accounts for about one-fifth
OF the entire population of the country
The city is the center of everything
| because the best lands are close by and
all railroads converge to this excellent
seaport, situated well out of range from
enemy naval artillery. A large mill
tary force stationed in the city is well
paid, well fed and well lodged. The
army has, therefore, nothing to gair
by the adoption of Communism and
without it, no other elements woulc
have a chance to revolt successfully.
1t should be remembered that the
recent military coup d'etat was de-
| cidedly anti-Socialistic. 1t was directed
| at the removal of one man who, al
though admittedly an unselfish patriot,
was clinging to power after his facuI-
ties had suffered through age.
In Chile, the military forces are su-
preme-splendid and expensive auto
| mata bored to extinction by inertia
All revolutions have started in the
barracks or on board the warship As
might be expected, the red" regime OF
Davila has turned into pale pink, and
| may become blue as the pull of aris-
tocracy RECEIVERS its vigor. All the nj
trate lands, the principal source OF
Chile's wealth, belong rightfully u
Bolivia and Peru, and the imposing
army was created to defend them
When 1t is considered what the yield in
dollars of the nitrate industry has been
during the past 40 years. Chile's long
record of punctual payment of debt in
spires less admiration.
However, Chile'S troubles are not un-
| like those of her more peaceful neigh
! Dor, the United States. and in her
| present trouble she may be expected to
act as America would in like predica
ment. There must be a long period ol
| painful reconstruction, but 1t need not
be inferred that it will be preceded BY
a reign of terror instigated by rec
emissaries. Chileans do not welcome
advice from abroad.
Would Hamper Credit.
J Perhaps the best guarantee against
I the spread Of Communism in South
America is the certainty that any ma
| :; 0nal declaration of bolshevism would
mean ostracism and permanent closure
Of credit from abroad.
Default on foreign obligations has
never entailed this. Almost all of the
/ latin American countries have de-
| faulted in the past, and several of them
| have obtained reduction Of interest
rates. cancellation of arrears, and ever
oiminution of principal amounts out.
standing without prejudice to the &C
QUESTION Of new loans at later date
They know that the creditor nations
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