Evening star., 1939-10-05
Britain May Convert
South American Debt
Into War Assets
Intensificotion Of u. S.
Trade Problem Seen
As Possibility
BY CHARLES E. HARNER,
socia ted Press Financial Writer,

NEW YORK, Oct. 5.-Wall Streets
bond experts said today they saw
a possibility that Great Britain might
convert one of her chief financial
headaches-her Latin American
bonds-into a wartime asset.
And In the conversion, they said.
the United States might gain a few
more headaches from her own Latin
American bond problem.
Latin American nations and NUM-
cipalities owe $1,000, 900 600 to in
vestors in the United States. Argen-
tina, Cuba and Uruguay are repaying
their borrowings, but all the other
nations are in default. This excerpts
Venezuela, which has no foreign
debt.
But the debts of Latin America to
Great Britain are much greater.
British loans to Brazil alone are al
most half as large as United States
loans to all the nations of Latin
America, and the British are hav-
ing just as difficult a time with the
collections.
SCapleS are Nee0e0.
But now, say the bond men, Great
Britain has a means of collecting
what is owed her by simply cancel
ing those millions in bonds in ex-
change for shipments of war neces-
stiles: Cotton, meat, coffee, nitrates,
copper, tin, manganese, petroleum.
OF course, said the experts, it isn't
likely the British will be repair 20
shillings on the pound, which is to
say 100 cents on the dollar.
The countries which are in default
in their payments have an oppor-
tunity for pointing out that the Brit
ish pound sterling isn't worth as
much as it was before the war in
terms of United States and their
own currencies and that their bonds,
for that matter, aren't worth very
much these days on the world mar
ket-largely because they are in de-
fault.
The United States problem in this
type of settlement, Wall Street ex-
perts said, is an intensification of
what always has been the main bar
to the development of trade between
North and South America-the lack
of money on the part of the South
ern nations with which to buy
United States products.
With the exception of coffee and
a few specialized products. Latin
America has virtually nothing to sell
which the United States does not
produce itself.
Exchange One-sided.
Consequently, while the United
States would like to sell its airplanes
and locomotives and automobiles
and safety razors to Latin America,
economic necessity does not force
this country to buy from there. And
it is scarcely curious that the Latin
Americans have in past times often
placed their orders for manufac-
tured articles with European nations
which were spending their money
south of the tropic Of cancer.
The Germans. until the war came
along, were willing and anxious to
barter their manufactured goods for
Western World products. And now
it appears possible that the British
will barter their Latin American
bonds for more OF those products.
But, the bond men point out, this
will not improve the cash-on-hand
accounts of the Latin Americans.
And United States manufacturers
and exporters prefer to do business
on a cash basis.
This is the end served by the Ex-
port-Import Bank in Washington
which, funded by the Government,
sets up credits with the various ma
tions with which the United States
desires to do business, then pays cash
to American businessmen who are
selling their products to those ma
tions
President Roosevelt has indicated
that he will ask Congress to increase
the Export Import Banks capitah-
zation to $500 OOO, 900 from its pres
ent $1O0000.00 to permit expansion
of United States exports to Latin
America.