Evening star., 1939-04-18
Control Of Air|ines
Aids Reich h'sDEve
In South America
Planes and Equipment
Sold to Native Firms
At Nominal Prices

The fight between European
and American apiation CON-
panies for dominance of the air
ODer South America Is attracting
increasing attention here and
abroad. This is the second Of tho
authoritative articles discussing
Uarious phases of the struggle.
Special Dispatch to The Star.
RIO DE JANE1RO, April 18 (N.A.
N.A).-The second major front on
which Europe, with particular en-
phasis on Germany and Italy, is
attacking the objective of domi-
nance of the air over South Amer
lea lies through the native aviation
companies.
The ammunition used is aviation
equipment, chiefly airplanes. which
German and Italian factories sup
ply to South American companies
under a contract whose terms, of
course, are secret and variously ru-
mored.
An excellent authority, whose ac-
cess to the information is indisput-
able, reveals that the contract pro-
vides for a cash payment which is
nominal, if required at all, and that
the balance of the purchase price is
stipulated to be paid sometimes out
OF profits and sometimes by the
award OF stock in the native COM
pany.
Since few of the native COM
panies are run primarily for profit,
but largely as public service de-
voted to the development of inland
territories, it makes little difference
whether the device of earmarking
future profits or paying stock is en-
ployed to conceal the blunt fact that
these companies owe both their Gre
alton and continued existence to
Germany, or, more specifically, the
National Socialist regime. This
technique of domination was con-
sldered impracticable by republican
Germany because of the expense
involved.
Equipment Can Be Withdrawn.
These contracts. the same source
dlscloses, contain a clause reserving
for the seller-Germany or Italy
the right to withdraw his equip
ment before payment is completed
under terms which are described
as being so plastic as to amount to
"at will What this means is that
the power to decree the life or death
OF a number of South American
aviation companies remains in desk
drawers in Berlin and Rome. While
several companies have been
cracked into life by the whip whose
handle is in the grasp of the Ger
man Feuhrer and the Italian Duce,
none has been cracked into its grave
yet. although one or two have been
compelled to dance to curious meas
ures.
Specifically, the companies which
are declared to have become in
volved in these curious contracts
with Germany are Aeroposta Ar
gentlna of Argentina, Clio de Avia-
cion de Uruguya, S. A., of Uruguay,
Viacao Aerea Sac Paula-known
as Vasp-and Viacao Aerea Rio
Grandense-"Varig'-both of Bra
I'll. In addition, Germany is report
ed to have offered to set up national
companies in every South American
country, with German engineers,
airports, flight and ground person.
mel, in exchange from raw ma
terlals and contract along the
general lines detailed above.
Corporation Sud Americana de
Servicios Aereos, headed by Mauro
Herlitzka, an Argentine utilities
magnate whose italian affinities are
we'll known, is the company which
is declared to have become en-
braced by Italy. This is the line
which operates twice daily in both
directions through Rosario, Buenos
Aires and Montevideo.
Law Slender Protection.
DR.. Trajano Furtado Refs, head of
the Brazilian civil aviation depart
ment, which is a government de-
partment under the ministry of COM
munications, declared with great
emphasis that lin the granting of
air service exploitation, Brazil plays
no favorites. AS a rule, tenders are
asked and the company offering the
best terms obtains the concession,
but no monopoly is granted. Re-
Gently the Panair Do Brasil, a sub
sidiary of Pan-American Airways,
bid higher than Condor and OBJ
tanned the concession for a 1000
mile run between Rio and Pocos de
Caldas, touching at Bello Horizonte
in between"
This relates to obviously foreign
companies. In connection with the
control of native companies, it was
pointed out that Brazil now has
new law regulating sales on the in
stalment plan. Under this statute,