Evening star., 1932-02-21
HEADWAY MADE
|NLAT|N NATIONS
US. Investors Make Renewed
Efforts to Get Acquainted
With Southern Neighbors.
BY FRANK H. MCCONNELL

NEW YORK, February 20 R,.-Hav-
ing lived next door to each other for
three centuries, North America and
Latin America have apparently de-
cided to take a little time off and get
acquainted.
Greater headway has been made in
the past year toward developing an un-
derstanding than in the preceding cen
tury New York bankers said informally
in answer to questions this week. The
present difficulties faced by South
American countries in meeting debt
obligations in North America, it was
said have largely caused this change.
The creditor, represented by North
America, has gone out of his way to
learn the nature of troubles affecting
the debtor. represented by South
America. The two, bankers here eX-
planned, find they are faced with a
similar difficulty which appears to be
at the root of present defaults on a
large portion Of Latin American debt
payments. This common ailment was
described as the general world wide
recession of trade activity which has
dried up the surplus money reservoirs
Of North America and has crippled the
abilities of South American countries
to raise money for debt service out Of
foreign commercial channels.
Seeks to Meet Debts.
Despite this obstacle, South America
has made strong efforts to meet her
debts said o. K. Davis today, speaking
for the Committee on Inter American
relations, OF which he is secretary,
Latin Americas visible balance of
trade, he stated. showed a markedly
favorable trend in 1881 compared with
1880. Had it not been for South
Americas foreign debt service, calling
for about s250,000,0OO annually, he
explained, the southern continent S
trade might have been nicely balanced
between imports and exports.
1t must not be supposed, however,
that this equilibrium has been ac-
complished without great effort on the
part of Latin American states" he said
They have had to suspend public i'm
provementS, cut down government ex-
penses in all directions, ship freely
from their already scanty supplies of
gold and, by their action, automatically
increase unemployment.
1T IS not alone the ruinous drop in
prices that has affected adversely Latin
American countries. it is as well the
cessation of the influx of foreign capi-
tai that has been one of the most seri-
GUS handicapS. All new countries, as
our own experience proves. depend in
large part for their early development
on older countries exporting capital
There is good reason to believe that
when the f1ow of capital again sets in
toward Latin America, it will produce
constructive effects out of proportion to
the actual amount of money involved,
and that it will be invested much more
conservatively than has been the case
in the past"
Investments Are $4,000, ,O0O,0
Available records. amplified as a re-
suit OF the Senates study of foreign
loans, indicate that North American in
vestments in South America approxi-
mate $4,000, ,00O, ,0OO Nearly SIS 900 ,OOO,-
600 Of this total has been advanced
since the World War. About 200 1000
Americans hold investments of South
American description.
BY far the larger part of this huge
total was invested in productive enter
pr1ses. In only one case, these reports
disclose, was any portion put into arma-
ments. The amount in this case, it was
said, represented only a drop in the
bucket as compared with the total
ANY improvement in commodity prices
would result in material benefits to
South America, which derives the bulk
OF Its wealth from export of raw ma
terials. Representatives of North
American creditors, it was said, are
looking toward possible price upturn in
1882. rather than to banking measures,
as the principal influence that would
again re-establish South American
bonds to their former popularity.
In the meantime, North American
creditor representatives feel that South
America Is making strong efforts to
work 1t own way out Of an admittedly
difficult position.