Evening star., 1933-11-12

III NNbONA lAtC uttEA uAlICo vi lLlOoC win
l. will play an important role in tn,
forthcoming Pan-American Con-
Il ference at Montevideo. and par.
ticularly from the declarations d
the delegates of the United States, il
appears that they will strive to give the
conference a predominantly economic
character. In world beSet by eco.
nonlic problems and in the midst of 6
depression without parallel in contem.
porary history, this is only natural The
more so when the failure of the London
conference, several months ago. turned
the attention Of the Washington Gov.
eminent toward Latin America as the
one remaining outlet for commercial ano
financial expansion abroad
From those same utterances and from
the views already exchanged between
several OF the governments participating
in the conference, 1t Is evident that the
question of defaulted Latin American
debts will be among the ones discussed
at Montevideo. In view of this fact and
IN view Of recent sensational disclosures
in connection with those loans, in a
Senate investigation, it is important that
the misunderstanding and the wrong
impression created here by the Latin
American defaults be cleared away.
The harsh and exaggerated comments
made in this country in reference to
those defaults may otherwise, cause
considerable harm. Not only in destroy
Ing, for many years to come, the con-
f1dence of the American public in Latin
American bonds. but also in alternating
the good will of the Latin Americans
toward their creditors.
Latin American Situation.
There are three fundamental reasons
why such unjustified comments should
be stopped.
In the first place, the Latin American
countries are the victims of situation
Z for which they cannot be made respon-
sible. The main cause of their financial
/ oifficulties is to be found in the enor-
nous decline in the prices of commodi-
ties and raw materials on which their
: whole economic life was centered.
With very few exceptions, the Latin
American are countries depending en-
tirely on one or two single products The
exuaorolnary fa1 in prices which has
Z. been the major characteristic OF the
present crisis, therefore. intensified by
the evils of overproduction has unset
{ the economic structure of nearly every
one OF them by cutting down to a half
[ or third the price of the particular
commodity which constituted the bulk
Of its exports.
Prices on coffee have affected Brazil,
Colompla, Nicaragua, Costa Rica, Ven
ezuela. Guatemala and Haiti. some of
these countries being dependent almost
exclusively on their coffee exports
Snarp declines in sugar prices have been
Ielt IN Cuba, the Dominican Republic.
Brazil. Colombia and Peru. Cuba prac-
t1caliy Lives" on sugar.
Chile, Mexico and Peru have s,lf-
Tered drop in copper prices The
oecllne in the price of tin has injured
particularly Bolivia, where about 40
per cent Of all exports is tin. Even
more pointed declines have been regis
tered IN wheat, corn and other apri-
cultural products. which. though pri-
marlly affecting Argentina. are also re-
fiected in conditions in Uruguay, Chile
Brazil, Colombia, Mexico, Peru. And
so on.
The blame for the crisis cannot he
laid upon the governments of those
countries Depending largely on their
exports to cover their expenditures and
meet their foreign obligations. they have
peen forced. by this uncomfortable de-
cine IN values. to cut down their
budgets to minimum, to create new
taxes, to compromise their credit. And
TO face the worst general economic de-
preston they have experienced in
years.
Foreign Debts Doubled.
In other words, the Latin American
governments have seen their foreign
debts suddenly doubled, or tripled. as
result OF this decline in the price
OF their major exporting products. For
they are compelled today to sell two
or three times as much of those
products as they did three years ago
TO get the money required to liuuidate
their financiah obligations abroad. And.
still the worst Of it, they cannot sell
tnat much, because there is no demand
that large.
It is obvious that the governments
themselves cannot be blamed for a
crisis of this kind. Truly, govern
mental inefficiency and extravagances
nave added to the seriousness of the
situation In certain specific cases, but,
IN the main, it Is clear that the Latin
American countries are the victims of
an economic phenomenon beyond their
control
recent statement issued by the
Committee on Inter-American Relations
OF New York, discussing the effects of
this rapid and extreme fall in the
prices OF commodities upon the capacity
OF Latin American countries to fulfill
their foreign obligations, summarizes
the situation in the following words:
No matter how strong is the will
OF people to meet all of their obli-
cations fully and promptly, it may, on
occasion, be beyond their power to do so.
Rigorous taxation and drastic domestic
economies, however thoroughly applied
will not produce foreign exchange-in-
ternational money-unless it becomes
available through the avenues of foreign