U.S.A. CARTEL PLAN

Grey River Argus, 30 July 1940, Page 4

U.S.A. CARTEL PLAN

Against Germany FOR HAVANA CONFERENCE. Now sitting in Havana is th e conference of American Republics. One item for it is Mr Roosevelt's plan for a cartel, the result of a deliberate anti-German move by Roosevelt five weeks ago, and proposes an economic union between the two continents under an Inter-American Export Corporation. The scheme .contemplates almost totalitarian control of exports of surplus commodities from North and South American countries. It aims to forestall any German attempt to dictate, terms on which tile Reich will purchase products of the Western Hemisphere. The controlling corporation would be financed entirely by United States capital and its po.icy presumably be dominated by seven out of ten members being appointed by the United States. In addition there would be 22 subsidiary corporations, representing each of the participating nations and an undetermined number of subsidiary groups controlling e&ch of the major export commodities.

The plan was presented frankly on the basis of “enlightened self-interest'. No secret has been made of the fact that military and naval considerations have been studied as well as economic Washington officials have reveaLea knowledge of economic pressure brought to bear on some of the Soutn American republics by Nazi agents. When the cartel plan was first launched it was thought that th e In-ter-American Bank, operated by eight of th e South American republics, might act as the clearing house ioi the transactions involved, but it was soon realised that,the scheme was too big for this. However, considerations of'financing methods hav e been subsidiary to the attempt to obtain control, of exports from American countries.

This has been so because it is believed that German economic pt-my ration can b t acireved only [ y purchases from the Americas and not by sales to them. But that purcltas--from Geimanv will also be include.l in the i Jan is admitted. In theory, the plan would provid: complete control over at! export sales of participating countries, to whatever buyers. Because th? scheme would be financed with American capital it is thought tha: th e headquarters would be in Wasmington and that United States representatives would determine g.mra policy. Latin American countries wdl be assured of an outlet for their surplus commodities, for these will eitm>r be exported or purchased by tire C!,rporaticn itself and resold, exchanged, given away, or conceivably dumped in the ocean. In any case participating countries are promised “a fair price.” for their go.ods. However, in no case will surplus commodities purchased by the corporation be allowed to compete with local products within the United States. Officials who have worked on the plan have declared that the loss on it may aifiourit to from £60.000,000 to £lOO,OOO 000 a year for th e United States because of the accumulation ox unsaleable surpluses. It is declared, however, that it is better to accept

such a loss than to supply a Like amount of foreign credits to the Nazis to help them to pursue their policy of conquest. This claim is supported with figures. It is pointed out thar. commodity exports of Latin American nations, from 1935 to 1938 averaged about 1,06£| 000,000 dollars year. Of this total mor e than half went to Europe, 17 per cent, of u to Germany, and about 82 per cent, io the United States.

With Germany in a position to dominate most, if not all the foreign trade of the. European mainland, n is argued that the American republic/ and Canada must be in a position to present - a united economic bloc. The meat produced by Argentina 88 per cent, goes to Europe. Seventy percent. of the Latin American coffee goes' to the same market. Sixty-eight per cent, of Venezuelan oil has been bought by the Netherlands. Only 90,00Q,009 bushels of the 360,000,000 bushels of wheat produced by Canada annually is consumed within the country. Most of the export trade is to Britain.

The chief problerh is expected to be finding markets for the produce Oi Canada and Argentina. The whois Canadian West depends on wheat, but there is no market for it in the United States. The rapid absorption of refugees by Canada and Argentina, and th e switching of production from raw materials to finished articles are seen by some people as a way out for these nations. At all events the Unitea State s hopes, bv means of this plan, to gain a year’s “breathing-space' v.-hile the position of American trade in a changed world is explored.