Post-war Finance

Manawatu Times, Volume 59, Issue 304, 28 December 1934, Page 8

Post-war Finance

A THEORY THAT FAILED. NEW YORK, Dec. 5. Pan-Americanism, successor to the ill-advised Monroe Doctrine, has not lived up to the expectations of its founder, John G. Blaine, former Secretary of State and is now being generally classed as a failure. Seven congresses, the last held at Montevideo a year ago, have not convinced Latin-Ameri-cans of the pious theories of Blaine that they and the United States “had a common origin and purpose; that tnere was an inherent community of inteiest., spiritually, culturally, and materially between them; and that the national outlook was kindred.” Tho Pan-American theory was exploited tp the utmost after tho war, When the United States was the only country with cash tp lend. Prior to the war, railways and other public undertakings, as well as commercial enterprises, were developed almost exclusively by British and European capital. From 1919 onward, the United States swollen with prosperity and war profits, poured more than a billion dollars into Latin America, in the shape of State loans. 'ln the fierce competition between American financial institutions, business ethics were entirely forgotten, if a moiety of the evidence recently made public is to be credited. Bribery was the chief agent in loan contracts. The depression brought to light unsavoury facts. Bondholders in the United States were heavy losers, while financial institutions had already taken their huge profits in the orgy of speculation that came before it. The last Pan-American Congress disclosed that, based on Latin America's “capacity to pay,” it was unlikely that bondholders or their heirs would get half that was owing to them. And much of the unstinted flow of money went into projects which, in pre-war years, had been rejected as unsound by British and European bankers. In the ultimate reckoning, Pan-Amer-icanism went to the wall. Latin America has reverted to the sound financial regime of the British Government. It is significant that, while reciprocal trade treaties have been signed with Great Britain and seven other' countries, uo such treaty lias bccu consummated with the United States. Latin America, ever suspicious and distrustful, has revived its former outlook towards the northern colossus: “You in your small corner, and I in mine.” It is a safe conjecture that the next Pan-American Congress will discuss little else besides post-war debts, with the assured prospect that the pious theory of “clinging together, as neighbours on this sea-isolated continent,” will go the way of the Monroe Doctrine.