Evening star., 1938-07-14
The Nazis Strafe Brazil.

INSTRUCTORS Of their will, the Nazis
seem as adept as the Hohenzollerns.
In Kaiser times, when imperious de-
mands were not promptly met, an ex-
peditionary force would be sent to en-
force them, as, for instance, when
William II dispatched his brother,
Prince Henry Of Prussia, to China in
1901. to exact cringing expiation from
China for the killing Of the German
Minister at Peking. A year later Germany
rushed a naval squadron to Venezuela
to dun President Castro. In 1911 the
cruiser Panther steamed into Agadir.
to pound Germany's fist on Morocco's
table as protest Of any discrimination
against Germany in favor Of France.
1t is in the spirit OF such tactics
that the Reich is now showing its
teeth to Brazil. Since last spring, re-
lations have been sorely strained by
President Vargas prohibition Of Ger
man political and cultural" activities
in Brazil The state Of high dudgeon
into which his action plunged the
Hitlerites, still chafing under disappoint-
ment over the discovery that the Vargas
regime is not totally totalitarian, was
recently aggravated by Brazils tenn
porary refusal to honor German clear
ing marks"
Berlin now announces complete sus-
pension of German purchases from
Brazil of coffee, tobacco, rubber,
oranges, bananas and other produce.
The consequent expectation is that .
trade war is imminent. which will wipe
out all German Brazilian business. The
Bank Of Brazil toward the end OF June
stopped all purchases of clearing
marks" These are the device evolved
by Berlin for financing German imports
Of raw materials and foodstuffs. The
Reich authorities now officially bluster
that Germany Is forced to buy the
products hitherto imported from Brazil,
in SO far as she does not wish to do
without them entirely. in countries
where substantial purchases Of other
goods already have been made"
The reprisal stunt casts q revealing
light on Germany's commercial methods.
It shows how the Nazis use their
foreign trade as a political weapon.
Finally. and most Importantly, it dis
closes the aggressive measures to which
the Reich intends resorting to counter
act what 1t stigmatizes as the new
economic encirclement." American In
terest in the episode springs from
Berlin's charge that the United States
Is engineering commercial boycott Of
Germany in Latin America, just as the
British and French are accused of doing
In Southeastern Europe. "Encirclement,"
IS Germans use the term, has an
ominous connotation. For years before
1914, they explained their extensive mill
tary war preparations on the ground
that Britain, France and Russia were
pursuing an "encirclement policy"
against the Fatherland. It was to COM
bat "Einkreisung" that the Germans
went to war twenty -four years ago
this month. .t Fl
President Vargas and his vigorous
foreign minister. DR.. Aranha, are not
likely to be stampeded by. Berlins
strong-arm methods. dermanys ad-
verse trade balance with Brazil approxi-
mated 100000 marks last year. It
rose sharply, by another 100000 in
the first quarter Of this year. Rio de
Janeiros feelings toward the Germans
have not been improved by the suspicion
that in repeated instances the Reich has
purchased Brazilian products merely in
order to resell them at lower prices In
world markets. BY this devious method
DR.. Schacht would obtain urgently
needed foreign exchange. thereby not
only ~unsettling international exchange,
but undertaking exporting countries
like Brazil with their own wares.
It looks as II Rio had called Berlin's
bluff as promptly and effectually as the
Czechoslovaks called it in mid-May.