Evening star., 1933-11-12
T|E-UP OF RESERVE
SYSTEM AND LATIN
BANKS CONSIDERED
Hull Said to Be Ready to
Second Motion at Mon
tevideo Meeting.
SOLUTION OF ECONOMIC
PROBLEMS IS HELD AIM
Other Proposals Include Invest
ment Code and Inter-American
Court of Justice.

tCopyrsht, 1888, by the Associated PressD
NEW YORK, November ll-Through
diplomatic channels came word today
that a proposal to link the Federal Re-
serve Bank of the United States with
the national banks of Latin American
nations is under consideration as Secre-
tary of State Hull sails for Montevideo
to the Pan-American Conference.
From these souHes it was learned
the establishment of an inter-Ameri-
can investment bureau to solve the eco
nomic problems of the Americas was
undergoing an intense study in Latin
America and that. apparently, the prof.
ect had sympathetic support of the ad-
n1inistration in Washington.
Secretary Hull was said to be fully
aware of the proposal and 1t was indi-
Gated that he may, in fact, personally
second a motion for the establishment
Of such an institution in plenary ses
sion of the Pan-American Conference.
Mexican Sponsors Proposal
Former American conferences
have concerned themselves with Ques-
tions of territorial rights, non-aggres-
sion and sovereignty in the main; the
forthcoming conference will be mainly
an economic affair and it will be aimed
toward mutual cooperation for better
ment of economic conditions in North
and South America.
Much of the success of the confer
ence, and certainly the future Of the
plan for an international economic CO.
operative body. rests with j. M. Puig
Casauranc, foreign minister OF Mexico
and head of his country's delegation to
the conference.
At present DR.. Puig Casauranc is
winding up tour Of the west coast of
South America preliminary to going to
Montevideo. He is comforting with
various governments on his way in an
effort presumably to determine what
their reactions would be to his project.
II he finds them favorable-and there
have been indications in the past that
such q plan would be welcomed in
Latin AmeEica-he is expected to pro-
pose creation of an fnter-AT> ><can IN
vestment bureau to the conference.
And when he makes this proposal,
Secretary Hull was said to be ready
to second it on behalf of the United
States
Briefly. 1t was said the proposal would
be the creation of a non-politicai inter
American Economic Commission to Gre
ate an inter American credit fund and
to survey the inter American credit
situation.
The fund would be subscribed by
the Federal Reserve Bank of the United
States and the various national banks
Of Latin American republics.
To avoid the question Of sovereignty.
always ticklish matter between the
United States and the southern re-
publics. the bureau would be absolutely
non-political.
Its survey would cover two points:
/. Loans already due and payable,
most Of which have been frozen in
moratoriums declared by the various
nations concerned;
2. New credit needed by Latin
American nations In order to carry on
their commercial and public works de-
velopments
Hitherto foreign investments in Latin
America have followed the economic
theory Of exploitation rather than de-
velopment.
Investment Code Projected
Apparently, weH-informed sources
say, the conference furthermore is to
be asked to adopt an-inter-American
code Of investments with the idea that
foreign capital must work for the ben
eft of the country to which it is sent
as well as for the capitalists.
This idea already Is being acted upon
In South America. In Chile, for eX-
ample, the new nitrate arrangement,
in which United States capital is heav-
ily interested. will give Chile 25 per
= cent share Of the net profits.
This code probably would be regarded
as implying similar cooperation by
United States oil companies in Colom-
bia. Mexico and Peru; American fruit
companies in Central and Upper South
America: sugar companies in Cuba,
and mining companies in Chile. Peru
and Mexico.
At present the Latin American ma
tons have complained foreign COM
panies which operate in their terri
tories only leave behind meager re-
turn of the profits which they them
selves are making. This return ordi-
narily is in the form of export taxes
Continued on Page 2, Column g.