Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-08-12
U. S. Relations With
Argentina Discussed
Competing Economies Held
Factor in Political
Difficulties
BY BLAIR BOLLES.

SIiNuItICS
BY BLAIR BOLLES.
A few days ago, Sumner Welles, the
Undersecretary of State, entertained at
dinner for Leopoldo Melo, the Argentine
Foreign Minister. Minister Melo Travelled
to the United States from Havana, where
Secretary Hull attained for this country
one OF the greatest diplomatic victories
the united States has known. The
Havana Conference of American Foreign
Ministers not only knit together the ma
tons of the New World, but won over
to the 1nter-American policy the sup
port OF the Argentine Republic. The
Argentines cautiously joined the New
World political league despite the long
catalogue of harsh words printed about
them Tor years in the United States,
They seem to be our friends now, and
because of that fact and because thew
can be valuable friends in the future it
might be wise to consider some of the
reasons why in the past the Argentines
have been aloof from us.
The Argentines have a certain arpu-
ment on their side. They feel that theirs
is sovereign nation under no compul-
sion to follow the advice of any neigh
Dor. no matter how big and wise. But
more important the Argentines have a
peculiar economic problem, which has
been the principal factor in the Argen-
tine foreign policy. Argentina is an
Agricultural roicjnn
port. The country supports itself on
the overseas market. England is her
best buyer, and so England is her best
friend. The United States not only
buys little from her, but completes
abroad for markets with her. Argen-
tina is proud, and Argentina wants to
survive economically
Until 1887 Argentina was waxing fat,
but the recession" which hit the United
States in the autumn Of that year tum-
bled Argentina's apple cart. The coun-
try is still suffering the effects, and the
war has provided more problems. One
consequence has been the great in
crease in governmental domination of
the Argentine economy, industry, fiscal
life, foreign trade situation and agri-
cultural marketing. The Argentine gov
eminent has large stake in Argentine
private affairs, far more so than is the
case here. So the government has a
double interest in the nations economic
situation.
BY following its policy of close CO.
operation with the conduct of the Ar
gentine economy, the Argentine govern
ment has been able to prevent crises
and to circumvent the difficulties which
might have been expected TO follow the
1887 upset. The United States has
never been able to summon the popular
support for a program that would en-
able our Government to assist the Ar
genuine government in its efforts by in
creaslng our purchases in the southern
most Latin American republic That is
the crux of the story of Argentine
American relations. 1t reflects no i'll on
Buenos Aires.
satisfactory source of information
on the relation of the government to
private enterprise in Argentina is a pub
LEGATION of the British Department of
Overseas Trade, the Report on Eco
nomic and Commercial Conditions in the
Argentine Republic" by w. N. Storey.
the commercial secretary of the British
Embassy in Buenos Aires. The United
Kingdom in 1888 took 1878 per cent of
the Argentine exports and sent to Ar
gentina 1873 per cent of the country's
imports. So the British interest in the
country is obvious. The juciest beef
steaks in Defeating Britain are cut
from cattle raised on the Argentine
pampas and herded by Argentine
gauchos.
One critical problem with which the
government had to deal was the decline
In the wheat market and the corollary
decline in the Argentine wheat growers
personal economy. The government
(this was in 1881 guaranteed the wheat
grower and the fax grower a minimum
price for wheat and linseed and reduced
the limit of imports of competing goods.
Despite criticism of both these meas
ures," writes Commercial Secretary
Storey, their constructive value cannot
be lightly assessed nor their psychology
ical effects undervalued." The market
for the grain became optimistic. and the
movement of the crop was steady.
In order to control imports, the gov
eminent took the step of establishing a
control over foreign exchange, with
both government exchange rate and a
free market exchange rate This step
also provided the government with an
opportunity to profit on the exchange
market and obtain funds for paying the
wheat growers their minimums. Further
indicating official interference with pri-
vate enterprise is the program for con-
struction of national grain elevators
Besides this, "active intervention in the
yerbe mate industry continues and re-
striction of production is vigorously ap-
piled"
The sum of these governmental opera
tons is reflected in the money market.
THE relatively unfavorable conditions
obtaining in 1888" Mr. Storey reported,
provided test of the strength of Ar
gentina's monetary and banking ma
chinery and her system of managed
economy, and on the whole it may be
said with some justification that her
financial structure satisfactorily with
stood the strain imposed upon it.
Despite the recession, prudent alb
sorption of excess banking funds by
the Central Bank in the preceding boom
OeriOd enabled the internal rnop etoru ra