Our Latin American Trade Faces Financial Difficulties

Abstract

SINCE the commencement of the World War of 1914-18-when present-day restrictions on foreign trade and foreign exchange were undreamed of-trade between the United States and Latin America has passed through several distinct phases. Before 1914, trade between the two great areas moved in generally tranquil fashion along well-established channels developed by years of experience and familiar contact. Predominantly agricultural and raw-material-producing countries, the Latin American nations were accustomed to look to Europe and to the United States for supplies of capital and manufactured goods, giving in return the primary products of their fields, their ranges, and their mines. Where balances between these countries and Europe and the United States failed to equalize directly, they were readily settled in triangular transactions in the exchange markets, since funds were freely transferable and credits accumulated in one country could be readily used to offset debits built up in others.